Energy

  • On 26 November the French National Assembly has rejected proposed law 3146 "encouraging a reduction in CO2 production through the development of direct load control". This proposal is the latest instalment in a saga which began several years ago, intending to use public money (a tax on consumed electricity) to subsidise a non-profitable business activity carried out by private operators: residential demand response. Since this issue concerns other countries in Europe and North America, the discussion below is of interest to readers outside of the French borders.

  • The subsidy programme introduced by EU Member States to finance Renewable Energy Sources (RES) will be remembered as a textbook case of a poorly conceived public policy.  However, it produced a significant side benefit: it contributed to RES competitivity in developing countries, where the battle against climate change will be fought over the next few decades.

  • Burning fossil fuels for heating, generating electricity or for transport does not simply produce carbon-dioxide emissions, but also other greenhouse gases (GHG), such as particulate matter (PM), sulphur dioxide (SO2), nitrogen oxides (NOx) and volatile organic compounds (VOC).

  • In this post we will defend the idea that the drop in oil prices is not due to an increase in supply, but rather to 9 years of stagflation resulting in a decrease in the market. The drop in oil prices signifies that we have entered the contraction phase of oil production: a paradigm change.

  • On 30 November 2014, German energy giant E.ON surprised most industry observers by announcing that it was spinning off its conventional power generation operations in Europe to focus on networks, renewable energy and consumer services.  The announcement marks the disappearance of a European energy superpower, whose history is tightly linked with that of the liberalisation of the electricity industry in Europe. This post draws a few observations from this announcement.

     

  • France receives about 14% of its electric power from hydroelectric plants whose outputs vary greatly depending on seasonal precipitation levels. Although there are major differences between countries, on average the percentage is the same in the European Union and the rest of the world. But the significance of this technology extends beyond its production levels. In fact, the flexibility of hydroelectric power plants makes this form of energy a crucial part of the answer to the versatility of intermittent demand and energy sources. Furthermore, after water circulates through turbines to generate electricity it can be put to other good uses downstream of retaining structures. So, in order to gain the most benefit from water resources, there must be an institutional framework whereby operators can take advantage of their equipment's flexible nature as well as meet the needs of other users of water. Currently, in France private operators are running large reservoirs through a concessionary scheme and the government is looking to replace these operators with semi-public companies. Can we expect to see more collective efficacy?   

  • Schumpeter a évoqué la destruction créatrice en parlant de l'innovation dans l'économie. À propos de changement socio-économique le suivant est attribué à Nicolas Klein (et souvent à Gandhi aussi) : Au départ on vous ignore, ensuite on se moque de vous, ensuite on vous combat et ensuite vous gagnez. Le lien entre l'observation empirique de Klein et la notion de changement de Schumpeter est dans la constatation que ceux qui vont être détruits par des révolutions technologiques se battent par tous le moyens possibles pour éviter de l'être. Parmi ces moyens il y a la mise en place d'un marketing (propagande), l'achat de l'influence des médias, des partenaires commerciaux, des politiciens, des chercheurs. On peut remarquer que les premiers stades décrit par Klein et/ou Gandhi concernent le marketing. 

  • Les installations hydroélectriques produisent environ 14 % de l’énergie électrique en France, avec de fortes variations saisonnières en fonction de l’hydraulicité. Malgré d’importantes disparités entre pays, le pourcentage moyen est du même ordre au sein de l’Union européenne et dans le reste du monde. Mais l’importance de cette technologie dépasse la dimension purement quantitative de sa production. En effet, la flexibilité des centrales donne à l’énergie hydroélectrique un rôle essentiel pour répondre à la versatilité de la demande et des sources d’énergie intermittentes. Par ailleurs, après turbinage pour produire de l’électricité, l’eau peut satisfaire d’autres usages en aval des retenues. Pour valoriser au mieux les ressources en eau, il faut donc trouver un cadre institutionnel qui permette à l’opérateur des centrales de tirer profit de la flexibilité de ses installations tout en répondant aux besoins des autres usagers de l’eau. Les grands barrages fonctionnent actuellement sous un régime de concession à des opérateurs privés, que le gouvernement souhaite remplacer par des sociétés d’économie mixte. Peut-on en attendre plus d’efficacité collective ?   

  • Aficionados of the French electricity market - including the authors of this blog- have noticed an intriguing silence during the Christmas break: at the time of this writing, the government has not (yet?) published “l’arrêté prime”, which would set a bonus granted to residential demand response operators.  This silence is excellent news for electricity consumers, who will not have to pay for the strategic errors of these operators. This blog post explains this situation, and also presents the economics of demand response in electricity markets, an issue of interest for all electricity consumers, not only French ones.

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