Search results

The purpose of this paper is to analyse how the regional effects of expansion can be managed under the constraints of voluntary cooperation. This paper studies international cooperation on electricity transmission expansions in a region of countries that shares a joint electricity infrastructure.

Cooperative game theory and the partition-function form were applied in combination with benefit–cost ratios to model and analyse the incentives to cooperate under different cost allocation rules. Empirical background was provided by a case study of a transmission investment agreement made on the Nordic electricity market.

Both cost sharing and the composition of expansion plans were identified as ways of reaching regional agreements. It was found that agreements based on proportional division of costs in relation to benefits were the best choice for voluntary cooperation.

The study did not analyse the effects or relevance of surplus sharing in addition to that implied by cost sharing, nor has it studied the regulatory and legal requirements for implementing side-payments between countries in grid expansions. These issues could benefit from more study.

The results are relevant for the development of international cooperation on grid expansions and as an input to regulations and policies aimed at promoting regional perspectives, in particular for the case of a single internal energy market in Europe.

The paper contributes with an analysis of incentives for transmission expansions in a multinational environment subject to voluntary provision and a lack of supranational authorities with decision power.

Regulatory and institutional changes, restructuring and/or privatization of the erstwhile vertically integrated electricity networks have been adopted by all Sub‐Saharan African (SSA) countries in their pursuit of rural and urban electrification, poverty reduction and economic growth. But advances with the reforms remain limited and the results are at best debatable. The purpose of this paper is to examine the reasons for the unsuccessful implementation of deregulation in Sub‐Sahara electricity markets.

The paper examines the experiences with deregulation of the electricity industries in developed and developing economies and surmises on the factors that have contributed to the success of reforms in some industrialized countries and identifies the factors that have contributed to the failure of reforms in SSA. The “evidence‐based economics” (EBE) methodology is used to analyze the existing models of regulation and their differences particularly as they are practiced in SSA and developed economies. A gap analysis is realized by highlighting the differences between best practices and the existing level of knowledge. Two case studies are analyzed and the collection of information is assessed in a way that is useful for the development and implementation of the most appropriate models of regulation for SSA.

The paper finds that the current trend to the regionalization of the electricity markets in SSA and the creation of regional power pools make possible the creation of a genuine regional electricity market which would provide new opportunities for the adoption and adaptation of more advanced models of regulation (2‐G and/or 3‐G) similar to the ones currently employed by some developed economies in Europe and North America. To do so, regulators in SSA need to adopt a more dynamic approach to regulation.

Given the comparative approach of this paper, it is not possible to prove that SSA countries will succeed in their electricity reforms by adopting the 2‐G and 3‐G regulatory models. Nonetheless, if they do follow the dynamic approach to regulation, as suggested in the paper, their chances to succeed are much better.

The analysis of this paper has major implications for governments, regulators, shareholders, customers and employees of the electricity industry. A better understanding of the reasons for the failure of previous reforms and the identification of major advantages and disadvantages of the electricity markets in SSA provide new opportunities and challenges. The success of the application of the 3‐G model may increase the competitiveness of the electricity industry and productive capacity of Sub‐Saharan countries.

Electricity is an essential input in any industrial and commercial process. Its availability reduces costs, enhances productivity and creates jobs in other sectors. The social well‐being of Sub‐Saharan countries would increase by adopting the 3‐G model suggested in this paper.

To the best of the author's knowledge, there are no recent studies dealing with the same issues particularly for Sub‐Sahara Africa. This paper fulfils the gap that exists in the literature.

This paper aims at assessing the actual use of interregional transmission lines and the opportunity cost of unused capacity. The 13 electric power lines connecting the province of Quebec (Canada) to its neighbours (New Brunswick, New England, New York, Ontario) are analysed for the years 2006, 2007 and 2008.

Hourly electricity transmission data from the Quebec Open Access Same‐Time Information System (OASIS) are analysed and matched with hourly market prices in New Brunswick, New England, New York and Ontario, for the years 2006, 2007 and 2008.

Capacity factors of about 50 per cent are found for these lines. Although increasing from 2006 to 2008, this finding shows that interregional lines are far from being heavily congested. Furthermore, about 25 TWh of additional profitable exports could have taken place every year, given the market conditions and the availability of transmission lines. These exports represented an opportunity cost of about $1 billion per year.

Other network constraints and transaction costs could explain why these profitable transactions have not taken place. However, the lack of available energy most likely explains why exports were limited. The opportunity cost could also be overestimated by not taking into account the price impact of additional exports.

Price regulation in Quebec (with priority given to local loads) should be reviewed to maximize economic efficiency and environmental benefits in the Northeast region.

This is the first analysis of the use of interregional electricity transmission lines. It provides a preliminary estimate of the economic cost of not further integrating different neighbouring regions.

Following the issuance of the Renewable Energy Directive in 2009, the European Union (EU) is explicitly pushing for member states to cooperate with third countries to meet their EU 2020 targets. So far, no single joint project is planned or in place yet. This paper aims to look at the opportunities for and barriers to possible RE exports from North Africa into the EU through the concept of a SWOT (strengths, weaknesses, opportunities and threats) analysis.

Thus, the SWOT for a possible implementation of Article 9 projects are analyzed using expert and stakeholder knowledge. A qualitative assessment was undertaken using data collected through one stakeholder workshop in North Africa, in-depth interviews and a qualitative literature review. The analysis was structured within a three-tier analyzing concept distinguishing between macro, micro and acceptance parameters.

From the SWOT analysis, some lessons are drawn, future possible measures are identified and conclusions for policymakers are discussed. The authors find that no easy solutions exist as most parameters can be both a strength and a weakness or a threat and an opportunity at the same time depending on future developments and the specific ideological perspective.

This paper provides new information and analysis of renewable energy sources projects in North Africa – application of the SWOT method on Article 9 cooperation projects – application of a three-tier analysis to cope with the complexity of the topic – taking into account often neglected socio-political aspects such as public acceptance.

The purpose of this paper is to explore the role of the housing market in the monetary policy transmission to consumption among euro area member states. It has been argued that the housing market in one country is then important when its mortgage market is well developed. The countries in the euro area follow unitary monetary policy; however, their housing and mortgage markets show some heterogeneity, which may lead to different policy effects on aggregate consumption through the housing market.

The housing market can act as a channel of monetary policy shocks to household consumption through changes in house prices and residential investment – the housing market channel. The authors estimate vector autoregressive models for each country and conduct a counterfactual analysis to disentangle the housing market channel and assess its importance across the euro area member states.

The authors find little evidence for heterogeneity of the monetary policy transmission through house prices across the euro area countries. Housing market variations in the euro area seem to be better captured by changes in residential investment rather than by changes in house prices. As a result, the authors do not find significantly large house price channels. For some of the countries however, they observe a monetary policy channel through residential investment. The existence of a housing channel may depend on institutional features of both the labour market or with institutional factors capturing the degree of household debt as is the loan-to-value ratio.

The study contributes to the existing literature by assessing whether a unitary monetary policy has a different impact on consumption across the euro area countries through their housing and mortgage markets. The authors disentangle monetary-policy-induced effects on consumption associated with variations on the housing markets due to either house price variations or residential investment changes. The authors show that the housing market can play a role in the monetary transmission mechanism even in countries with less developed mortgage markets through variations in residential investment.

The purpose of this paper is to explore the role of monetary policy transmission mechanism channel on firms' investment spending. The focal point is to investigate the differential of monetary policy effects across sub‐sector firms' investment by examining the role of interest rates, and broad credit channel of monetary transmission.

The following research design has been employed in examining the relevance of both monetary policy channels. First, the firm user cost of capital as a proxy for the interest rates channel is constructed. Second, the neoclassical model of firm‐level investment function has been estimated using the dynamic panel data technique.

The results revealed that the monetary policy transmission mechanism works through both interest rate, and broad credit channels in influencing firms' investment spending in the Malaysian economy. Monetary policy has heterogeneous effects in respect of sub‐sectors of the economy. In the long‐run, the firm investment in the consumer products and services sectors are significantly affected by the interest rate and broad credit channels. However, the firm investment in the industrial products and property sectors has only been significantly affected by interest rates and broad credit channel, respectively.

The empirical results provide new evidence on the microeconomic effects of monetary policy in a small open economy (i.e. Malaysia) in two dimensions. First, this finding has supported the relevance of interest rates and broad credit channel of monetary transmission in a small open economy. Second, monetary policy effects are also heterogeneous by sub‐sectors of the economy, as some sectors (for example, consumer products, industrial products, and services) are significantly affected by monetary policy, and other sub‐sectors (for example, property) are not affected.

This study aims to investigate the influence of macro-financial conditions on firm-level capital allocation as a micro-transmission mechanism of monetary policy in Vietnam.

The authors employ a dynamic model of investment based on the Euler equation approach that allows for financial frictions. The financial conditions are proxied by a composite index of the current states of financial variables, including interest rates, exchange rates, stock prices, and credit demand – which captures short-term shocks in monetary transmission channels. Corporate financing constraints, as a reflection of financial frictions, are measured by the sensitivity of investment to internal funds, which are extensively examined in terms of both negative and positive cash flows.

In the presence of a non-monotonic (or U-shaped) investment–cash flow relation, the empirical evidence from Vietnamese listed firms indicates that financial conditions affect investment behavior for only firms with negative cash flows, in the sense that better financial conditions alleviate the level of “negative” financing constraints (i.e. the sensitivity of investment to negative cash flow). This effect is greater for larger firms and more likely pronounced for firms without state ownership.

This study contributes to the literature on corporate financing constraints in a manner of considering the macroeconomic dimension, specifically exploring the asymmetric impacts of financial conditions on the investment sensitivity to cash flow.

This paper aims to present a practical and sequential application of the theory of constraints (TOC) to eliminate the critical barriers to Indian power transmission system (IPTS) that were limiting the entire power service quality.

This study uses a well-known management technique known as TOC, which has the capability and positive force to eliminate the barrier through sequential managerial procedures. TOC framework can provide practical guidance to stakeholders of the power transmission sectors through situational assessment, conflict resolution, planning and implementing changes required in the IPTS.

This study explains the utility of five-steps thinking process (TP) of TOC especially in the IPTS sector. The study also describes how each step of TP can improve the performance of IPTS against its specified goal. The study brings management’s attention on the system’s weak links that must be leveraged by eliminating them from the system. Major types of constraints are related to the restrictive policy of the sector that mainly include lack of strategic planning, lack of investments and lesser participation of the private players in the IPTS. This study further identifies and suggests various strategies to eliminate the critical barriers of IPTS.

The five-step process of TOC has been successfully applied in manufacturing sector and service sector processes, such as banking and medical services. This paper has uniquely applied TOC in the area of power sector, which is considered as one of key service sectors that form an important share for the Indian economy.

This study estimates the effects of political uncertainty and economic policy uncertainty on business confidence. Moreover, it also examines business confidence as a transmission channel of political uncertainty and economic policy uncertainty to investment.

The study addresses the Brazilian case from May 2004 to December 2017. Brazil experienced situations of political instability and public distrust in government and its policies, which reflected on the economic environment. The study uses two business confidence indicators that capture entrepreneurs' sentiment in relation to their business and the economy. All models are estimated using ordinary least squares and generalized method of moments.

The estimates reveal that increases in both political uncertainty and economic policy uncertainty reduce business confidence. The findings also indicate that business confidence acts as a transmission mechanism, i.e. uncertainties affect investments through business confidence.

The findings point to the following practical implications related to the existence of uncertainties in the Brazilian economy: different institutional difficulties and government indecisions have blurred the political scene and caused political uncertainties. In addition, the same aspects that blurred the political scene also caused uncertainties in relation to economic policy that undermined business confidence, and affected investment.

There is a vast literature on business confidence, as well as studies addressing the relationship between business confidence and investment. This study differs from other studies as follows: in addition to the political uncertainty, it also analyzes the effect of economic policy uncertainty on business confidence; it uses different measures to capture political instability, and it analyzes whether business confidence acts as a transmission channel of both uncertainties to investments.