International Journal of Global Energy Issues (14 papers in press)
The Economic viability of the utilization of biogas as an alternative source of energy in rural parts of Nigeria.
by Eric Chekwube Okonkwo, Kingsley Ifeanyi Okafor, Ertan Akun
Abstract: The role of energy in the economic development of any nation cannot be overemphasized, yet Africa largest economy Nigeria has just over 50% of its population having access to electricity, with frequent power outages, low availability of energy for lighting and other domestic purposes mostly in rural areas. The environmental issues associated with the use of fossil fuels and firewood, population increase in combination with a growing economy resulting in a high degree of biowastes generation. An average Nigerian family makes an average income of $450 to $645 per month, and an average of $10 is spent on cooking energy alone with about $3 spent for 4 hours per night on generator fuel for electricity in rural communities in Nigeria. 60 % to 70 % of these families own a greater number of domestic animals and farmlands that generate massive wastes, as well as municipal wastes, abattoirs wastes, and wastes from markets. The study is conducted to evaluates and estimates the biogas potential from these rural areas of the country through anaerobic digestion processes from the wastes available in these areas. The acceptance of biogas as an alternative energy source for rural homes in southeastern Nigeria and the economic viability of the system taking into consideration the mean earnings of the residents of the same location. The analysis shows a wide acceptance of the technology. Cost-benefit analysis shows that a 3m2 family-size biogas plant installation estimated at a cost of $500 is viable with a financial rate of return of 23 % and Net Present Value of $223.94. The results show that the system can adequately replace the use of fossil fuels, reduce environmental pollution through a reduction in greenhouse gas emission and aid municipal waste management by utilizing these wastes as an energy source.
Keywords: biomass; biogas; Anambra state; Nigeria.
Growth in transport sector CO2 emissions in Tunisia: an analysis using a bounds testing approach
by Souhir Abbes, Julie Bulteau
Abstract: This paper analyzes the dynamic impacts of GDP growth, motorization rate, transport pollution coefficient and energy intensity, on CO2 emissions from the transport sector in Tunisia. Empirical results from the ARDL approach show that over the 1971-2014 period, energy intensity and pollution coefficient were the most significant variables. The elasticities of motorization rate to CO2 emissions were also significant and had the expected sign. These results not only contribute to advancing the existing literature but also provide important policy recommendations: to control transport emissions, policy-makers should invest in public transportation and reinforce the legislation on environmental standards of vehicles. Finally, the statistically insignificant effects of per capita GDP on transport carbon emissions in the long run suggest that it is possible to control these emissions without disrupting economic growth. This can be achieved by developing short sea shipping between the biggest cities to reduce road congestion and carbon emissions.
Keywords: transport sector; CO2 emissions; ARDL; energy efficiency; economic growth; Tunisia.
Are US gasoline price responses asymmetric? Another look
by Hamid Baghestani, Ismail Genc
Abstract: This study examines the possible rockets and feathers effect by focusing on daily spot gasoline and crude oil prices. Our test results for 1986-2017 reveal a significant directional association between gasoline and crude oil prices; the proportion of days in which crude oil and gasoline prices move in the same direction is 0.75, and the proportion of days in which crude oil and gasoline prices both rise (fall) is 0.74 (0.76). Further findings reveal no evidence in favor of asymmetry in gasoline prices, as gasoline prices rise more than crude oil prices by an average of 0.20% but also fall more than crude oil prices by a similar average of 0.18%. These conclusions remain unaltered for two approximately equal sub-periods of 1986-2002 and 2002-2017 which are characterized, respectively, by relatively low and high crude oil and gasoline prices.
Keywords: Energy prices; Asymmetric behavior; Directional association.
Electricity Consumption and Economic Growth: Empirical Evidence from a Resource-Rich Landlocked Economy
by Shishir Shakya, Rabindra Nepal, Kishor Sharma
Abstract: This paper unfolds the short run and the long run causality between per capita electric power consumption (LPEC) and per capita gross domestic product (LGDP) for Nepal during the period 19712010 using time-series econometrics. We find that LGDP granger causes LPEC in the long run and weakly granger causes in the short run while the reverse causality is not found. The results indicate that total electricity consumption has no causal role as a component of economic growth in Nepal. Thus, the electricity consumption policy should be designed and implemented as cohesion to growth.
Keywords: Error correction models; Granger-Causality; Johansen cointegration.
Special Issue on: Quantitative Energy Finance Applied to Environmental and Climate Problems
Fuel Taxes and Consumer Behaviour: A Markov-Switching Approach.
by Simon Porcher, Thomas Porcher
Abstract: Fuel taxes can be employed to correct externalities associated with automobile use and raise government revenue. The general understanding of the efficacy of existing taxes is largely based on empirical analyses of consumer responses to fuel price changes. In this paper, we directly examine how fuel taxes, as distinct from tax-exclusive fuel prices, affect fuel demand. To do so, we use a Markov-switching approach on monthly observations of French fuel prices from 1983 to 2013. Our analysis reveals that consumers respond significantly faster to increases in fuels taxes than to increases in tax-exclusive fuel prices. This result raises questions about our understanding of the efficacy of existing fuel taxes and of the optimal tax to achieve the various goals for which they are implemented.
Keywords: Energy; Fuel; Fiscal Policies; Consumer Behavior.
Understanding Volatility and Leverage Effects in bunker markets
by Ishita Ranjan, T. Bangar Raju, R. Jayaraj, Krishnendu Dutta
Abstract: This research paper primarily focuses on analyzing the volatility and to study the leverage effect in the bunker prices specifically in IFO 380 AND IFO 180. To achieve this objective the research has used econometric model to study volatility known as Exponential General Autoregressive Conditional heteroskedasticity (E- GARCH). The period chosen to analyze this data was from January 2000 to October 2015. The second objective in the research deals with investigating the impact or causal relationship of IFO 380 bunker grade on bunker grade 180 and vice- versa. To achieve this Bivariate and E-GARCH analysis was done. The motivation behind this research was to study the leverage effect present in E- GARCH and based on results analyze where to risk mitigating strategies known as hedging strategies. Also, this research included aspect of serial correlation seen through Lagrange Multiplier (LM) tests and heteroskedastic problems in the Bunker price data which affects the results. The literature showed different research which dealt with volatility and GARCH models but with tabulation of all the literature a common research gap was found that there are limited studies on Bunker prices especially dealing with IFO 380 and IFO 180 using E-GARCH and Bivariate analysis. The analysis exhibited the model to be highly significant at 1% level of significance. The IFO 380 and IFO 180 were observed to have short and long run shocks and additionally a positive leverage effect was seen in IFO 180. Also, strong and positive impacts were observed between IFO 380 and IFO 180 prices. Based on these results it was recommended to the maritime industries that studying different energy derivatives (like the futures and options and collar strategies) in this case of volatility is important. However, there are short and long run shocks persistent in both the bunker specifications, thus hedging strategies are required for both the bunker grades.
Keywords: Bunker prices; Bunker grades IFO 380 & IFO 180; E-GARCH; bivariate analysis; leverage effect; hedging strategies; Lagrange multiple tests and heteroskedasticity tests.
Thermal Energy Storage using Phase change materials - A way forward
by Jayantilal Hadiya, Ajit Kumar N. Shukla
Abstract: The phase change material (PCM) stores thermal energy in form of latent heat during phase change process. This is one of the way to store available energy to use later for application during off-sunshine hours. This paper reviewed the recent investigation in the area of PCM as thermal energy storage (TES) and a way forward. This review summarizes the previous research works based on the type of PCMs and method of work. A radar map, mind map, comparison charts, etc. are developed for energy storage technologies and different PCMs. The geometry of PCM container of TES is first introduced and followed by the types of PCM used for TES. The most of the recent work such as paraffin, fatty acids, hydrates and metallic as PCM for TES are discussed. In the subsequent part of the paper, the recent developments of eutectic mixture of PCMs and metallic PCMs for TES are also reviewed as way forward reducing the Global Worming Potential building a holistic picture.
Keywords: Thermal energy storage; Phase change material; Paraffin; Fatty acids; Hydrates; Eutectics PCMs.
Energy Transition: Between Economic Opportunity and the Need for Financing?
by Heger GABTENI, Adil BAMI
Abstract: The energy transition has become the subject of special attention and debate, and its implementation is now a major social issue on an international scale. This article examines the macroeconomic impacts of the energy transition by analysing its effects on economic growth, public spending and the balance of the trade balance. In addition, the need for cost-benefit arbitrage and various financing vehicles are studied and placed in perspective. Finally, the article concludes with the need to organize and structure the financing circuit of the energy transition.
Keywords: energy transition; financing; renewable energies; climate change; green bonds; crowdfunding; Paris agreements; COP 21; energy mix; fossil fuels; nuclear.
Regional analysis of the Relationship between CO2 Emissions and Financial Development
by Li Chiao-Ming
Abstract: This study reappraises the Relationships between financial development and CO2 emissions by using 25 OECD countries during 1971-2007 as observations. It introduces the panel transition regression (PSTR) model. We found that strong evidence of the relationship between financial development and CO2 emissions is non-linear and the trade off correlation between these ratios and the CO2 emissions. The CO2 emissions will be different under the financial development threshold value and the control variables of energy Consumption, GDP and GDP2. What is more, the different financial development attributes produce completely different CO2 emissions. In sum, the threshold of financial development will be an important index to control CO2 emissions.
Keywords: financial development; CO2 emissions; PSTR model.
Attributes of a viable policy for the Vietnam Electricity Sector Opinions of Stakeholders
by Hung Nguyen
Abstract: The Electricity sector has seen little changes for many decades in Vietnam, while those of the Europe and America countries have changed profoundly in the last 3 decades. The current policy for the Electricity industry of Vietnam is seriously flawed. This research examines basic attributes of a viable policy for Vietnam Electricity industry, and investigate preference of different stakeholder groups on potential policy reforms that would go toward providing a viable regulatory and business model for the industry. That policy should include several features. First, there should be an environment for greater private investments. Second, non-natural-monopolistic parts of the industry should be open to competition. Third, electricity companies should be allowed to price for relevant profits. Fourth, the current state-owned Electricity of Vietnam (EVN) should be given sufficient commercial flexibility to pursue additional revenue.
Keywords: Electricity reform; Electricity policy; Public utilities.
Electricity Retail Competition: The Case of the UK
by Phillip Cartwright, Raphael Boroumand
Abstract: The objective of liberalizing electricity supply was to create competitive retail markets where asset-light suppliers would compete on price. This article explores the quantitative and dynamic relationship between domestic retail prices and the wholesale price since one would expect a symmetric pattern with a stable and low retail margin. In this article, taking the U.K market for analysis, a time-series approach is applied to calculate the extent and timing of pass through between wholesale and retail price variations. The preliminary results indicate that the impact effect and long-run effects from the wholesale to the retail market is quite low.
Keywords: electricity supply; UK; retail market; competition; time-series; causality; long-run response.
Oil Price Shocks and OECD Equity Markets: Distinguishing between Supply and Demand Effects
by Abderrazak Dhaoui, Khaled Guesmi, Youssef Saidi, Saad Bourouis
Abstract: With the recent changes in international financial markets, investors and policymakers are paying special attention to the relationship between oil price shocks and equity markets. This paper investigates how oil supply and oil demand shocks interact with OECD countries and macroeconomic variables within a cointegration vector error correction framework, which provides extreme flexibility with a parsimonious specification. By defining oil supply and oil demand shocks as endogenous variables, our proposed model allows us to gauge the shock transmission among the system variables through time and investigate the direct and indirect connections between oil price shocks and stock returns. We are also able to observe the long-run relationship between real stock prices and real oil prices measured by world and local prices. Our empirical findings show that the impact of oil price shocks substantially differs among the countries and that the significance of the results differs among the oil price specifications (real national oil price, world oil price, supply shocks and demand shocks).
Keywords: Oil price; Stock market return; Oil supply shocks; Oil demand shocks.
Investigating the price linkage between the Asian LNG spot and East Asian LNG prices and its implications
by Jeremia Dwi Martono, Kentaka Aruga
Abstract: This study investigates the price linkages among the Asian LNG spot and East Asian LNG prices to examine the existence of a long run relationship among the spot, Japanese, South Korean, Taiwanese, and Chinese LNG prices using cointegration analysis over the time period between 2009 and 2014. The results show that the Asian LNG spot price did not have a price linkage with both monthly averages of Japanese and Taiwanese LNG prices. The analyses also indicated that the South Korean LNG market moved together with the Asian LNG spot market. Lastly, the study discovered that the Chinese LNG market was somewhat influenced by the dynamics of the Asian LNG spot market. The findings corroborate the International Energy Agencys views on the importance of creating a natural gas trading hub in Asia that reflects the dynamics of the gas market in the Asia Pacific Basin and making the Asian gas market to become more uniform.
Keywords: Price Linkage; Asian LNG spot prices; LNG Spot and Short-term cargoes; Long-term contracts; Spot prices.
Optimal management of an oil exploitation.
by S. Goutte, I. Kharroubi, Thomas Lim
Abstract: The aim of this paper is to deal with the optimal choice between extraction and storage of crude oil during time under a large panel of constraints for a fixed maturity T. We consider a manager that owns an oil field from which he can extract oil and decide to sell or to store it. This operational strategy has to be done in continuous time and has to satisfy physical, operational and financial constraints such as: storage capacity, crude oil spot price volatility, amount quantity available for possible extraction or the maximum amount which could be invested at time t for the extraction choice.rnWe solve the optimization problem of the manager's profit under this large panel of constraints and provide an optimal strategy. We then deal with different numerical scenario cases to check the robustness and the corresponding optimal strategies given by our model.
Keywords: Optimal Strategy; Oil Extraction; Oil Storage; Extraction choice.