IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v38y2017i1_supplp97-114.html
   My bibliography  Save this article

Pricing electricity and supporting renewables in Heavily Energy Subsidized Economies

Author

Listed:
  • David M. Newbery

Abstract

ABSTRACT Heavily Energy Subsidized Economies’ energy subsidies cost the budget on average 4% of GDP in 2014. Resource rents permit administratively undemanding transfers to citizens to maintain political support, whose removal will be resisted, despite resulting inefficient consumption and lock-in risk. Collapsing energy prices delivering severe fiscal shocks combined with growing concerns over climate change damage make carefully designed reforms both urgent and politically more acceptable. Political logic suggests designing reforms that compensate vocal interest groups. The paper presents evidence on the magnitude and impacts of oil, gas and electricity subsidies, and discusses how the electricity sector can be weaned off subsidies, enabling CCGTs and unsubsidized renewables to reduce carbon emissions.

Suggested Citation

  • David M. Newbery, 2017. "Pricing electricity and supporting renewables in Heavily Energy Subsidized Economies," The Energy Journal, , vol. 38(1_suppl), pages 97-114, June.
  • Handle: RePEc:sae:enejou:v:38:y:2017:i:1_suppl:p:97-114
    DOI: 10.5547/01956574.38.SI1.dnew
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/01956574.38.SI1.dnew
    Download Restriction: no

    File URL: https://libkey.io/10.5547/01956574.38.SI1.dnew?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chao, Hung-po & Wilson, Robert, 1987. "Priority Service: Pricing, Investment, and Market Organization," American Economic Review, American Economic Association, vol. 77(5), pages 899-916, December.
    2. Jim Krane, 2015. "Stability versus Sustainability: Energy Policy in the Gulf Monarchies," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Moore, J. & Woo, C.K. & Horii, B. & Price, S. & Olson, A., 2010. "Estimating the option value of a non-firm electricity tariff," Energy, Elsevier, vol. 35(4), pages 1609-1614.
    2. Peter Cramton & Axel Ockenfels, 2012. "Economics and Design of Capacity Markets for the Power Sector," Papers of Peter Cramton 12cocap, University of Maryland, Department of Economics - Peter Cramton, revised 2012.
    3. Bernard, Jean-Thomas & Roland, Michel, 2000. "Load management programs, cross-subsidies and transaction costs: the case of self-rationing," Resource and Energy Economics, Elsevier, vol. 22(2), pages 161-188, May.
    4. Claude Crampes & Yassine Lefouili, 2021. "Green energy pricing for digital europe," Post-Print hal-03352748, HAL.
    5. Heidrun C. Hoppe & Benny Moldovanu & Aner Sela, 2009. "The Theory of Assortative Matching Based on Costly Signals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 253-281.
    6. Beard, T. Randolph & Sweeney, George H. & Gropper, Daniel M., 1995. "Subsidy free pricing of interruptible service contracts," Energy Economics, Elsevier, vol. 17(1), pages 53-58, January.
    7. repec:spo:wpmain:info:hdl:2441/7067 is not listed on IDEAS
    8. Ross Baldick & Sergey Kolos & Stathis Tompaidis, 2006. "Interruptible Electricity Contracts from an Electricity Retailer's Point of View: Valuation and Optimal Interruption," Operations Research, INFORMS, vol. 54(4), pages 627-642, August.
    9. Heidrun Hoppe & Benny Moldovanu & Emre Ozdenoren, 2011. "Coarse matching with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 47(1), pages 75-104, May.
    10. Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.
    11. Newbery, David, 2016. "Missing money and missing markets: Reliability, capacity auctions and interconnectors," Energy Policy, Elsevier, vol. 94(C), pages 401-410.
    12. Faruqui, A. & Hajos, A. & Hledik, R.M. & Newell, S.A., 2010. "Fostering economic demand response in the Midwest ISO," Energy, Elsevier, vol. 35(4), pages 1544-1552.
    13. François Salanié & Vera Zaporozhets, 2022. "Water allocation, crop choice, and priority services," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(1), pages 140-158, February.
    14. Rajnish Kamat & Shmuel S. Oren, 2002. "Exotic Options for Interruptible Electricity Supply Contracts," Operations Research, INFORMS, vol. 50(5), pages 835-850, October.
    15. David, Laurent & Le Breton, Michel & Merillon, Olivier, 2007. "Public Utility Pricing and Capacity Choice with Stochastic Demand," IDEI Working Papers 489, Institut d'Économie Industrielle (IDEI), Toulouse.
    16. Robert B. Wilson, 2021. "Strategic Analysis of Auctions," Econometrica, Econometric Society, vol. 89(2), pages 555-561, March.
    17. John W Lang & N. Aldori, 2020. "An Extension to Late Rentierism, using a Comparative Compound Diversification Index, to Show the Movement Towards Mixed Mode Economic Diversification and Development, in the GCC States," Business and Management Studies, Redfame publishing, vol. 6(1), pages 4057-4057, December.
    18. Fred Schroyen & Adekola Oyenuga, 2011. "Optimal pricing and capacity choice for a public service under risk of interruption," Journal of Regulatory Economics, Springer, vol. 39(3), pages 252-272, June.
    19. repec:hal:wpspec:info:hdl:2441/7067 is not listed on IDEAS
    20. Peter Cramton & Axel Ockenfels & Steven Stoft, 2013. "Capacity Market Fundamentals," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    21. Li, Raymond & Woo, Chi-Keung & Tishler, Asher & Zarnikau, Jay, 2022. "Price responsiveness of commercial demand for natural gas in the US," Energy, Elsevier, vol. 256(C).
    22. Ahmed Khalif & Massimiliano Caporin & Michele Costola & Shawkat Hammoudeh, 2021. "Systemic Risk for Financial Institutions in the Major Petroleum-based Economies: The Role of Oil," The Energy Journal, , vol. 42(6), pages 247-274, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:enejou:v:38:y:2017:i:1_suppl:p:97-114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.