IDEAS home Printed from https://ideas.repec.org/p/mlt/ppaper/0517.html
   My bibliography  Save this paper

The Macroeconomic Effects of Efficiency Gains in Electricity Production in Malta

Author

Listed:
  • Noel Rapa

Abstract

This note studies the impact energy market reforms might have on the Maltese economy in the medium-to-long run using a DSGE model. Contrary to previous studies, this note takes in consideration the changes in the marginal cost of electricity production of Enemalta under a number of energy production setups. Results show that the decommissioning of the Marsa power plant and the installation of an undersea interconnector results in a fall in marginal costs, and therefore an increase in long run output, under both baseline and high oil price scenarios ranging between 1.61% and 2.53%. This energy setup is however consistent with an increase in marginal costs, and therefore a fall in long run output of 0.41% in the case of a low oil price scenario. The future setup of natural gas fired turbines results in a fall in marginal costs and an increase in long run output in all oil price scenarios, ranging between 0.81% in the low oil price scenario to 3.00% in case of high oil prices.

Suggested Citation

  • Noel Rapa, "undated". "The Macroeconomic Effects of Efficiency Gains in Electricity Production in Malta," CBM Policy Papers PP/05/2017, Central Bank of Malta.
    • Handle: RePEc:mlt:ppaper:0517
    as

    Download full text from publisher

    File URL: https://www.centralbankmalta.org/file.aspx?f=61643
    File Function: First version, 2017
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Noel Rapa, 2016. "MEDSEA : a small open economy DSGE model for Malta," CBM Working Papers WP/05/2016, Central Bank of Malta.
    2. Ries, Jan & Gaudard, Ludovic & Romerio, Franco, 2016. "Interconnecting an isolated electricity system to the European market: The case of Malta," Utilities Policy, Elsevier, vol. 40(C), pages 1-14.
    3. Aaron G. Grech, "undated". "An estimate of the possible impact of lower electricity and water tariffs on the Maltese economy," CBM Working Papers WP/01/2014, Central Bank of Malta.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roberta Montebello & Jude Darmanin, 2021. "Saving behaviour in Malta: Insights from the Household Budgetary Survey," CBM Working Papers WP/04/2021, Central Bank of Malta.

    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. Rafal Weron & Florian Ziel, 2018. "Electricity price forecasting," HSC Research Reports HSC/18/08, Hugo Steinhaus Center, Wroclaw University of Science and Technology.
    2. William Gatt & Noel Rapa & Luca Brugnolini, 2020. "MEDSEA-FIN A DSGE model of the Maltese economy with housing and financial frictions," CBM Working Papers WP/04/2020, Central Bank of Malta.
    3. Noel Rapa, 2020. "A Sectoral Model Extension to STREAM," CBM Working Papers WP/08/2020, Central Bank of Malta.
    4. Vijay, Avinash & Fouquet, Nicolas & Staffell, Iain & Hawkes, Adam, 2017. "The value of electricity and reserve services in low carbon electricity systems," Applied Energy, Elsevier, vol. 201(C), pages 111-123.
    5. Papadopoulos, Agis M., 2020. "Renewable energies and storage in small insular systems: Potential, perspectives and a case study," Renewable Energy, Elsevier, vol. 149(C), pages 103-114.
    6. Noel Rapa, 2017. "Estimates of Fiscal Multipliers using MEDSEA," CBM Working Papers WP/04/2017, Central Bank of Malta.
    7. Olivia Francesca B. Agua & Robert Joseph A. Basilio & Mc Erschad D. Pabillan & Michael T. Castro & Philipp Blechinger & Joey D. Ocon, 2020. "Decentralized versus Clustered Microgrids: An Energy Systems Study for Reliable Off-Grid Electrification of Small Islands," Energies, MDPI, vol. 13(17), pages 1-22, August.
    8. Sapio, Alessandro & Spagnolo, Nicola, 2020. "The effect of a new power cable on energy prices volatility spillovers," Energy Policy, Elsevier, vol. 144(C).
    9. Barrera-Santana, J. & Sioshansi, Ramteen, 2023. "An optimization framework for capacity planning of island electricity systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 171(C).
    10. Gaudard, Ludovic & Madani, Kaveh, 2019. "Energy storage race: Has the monopoly of pumped-storage in Europe come to an end?," Energy Policy, Elsevier, vol. 126(C), pages 22-29.
    11. Brian Micallef & Reuben Ellul, 2020. "How Do Estimates of Inflation Persistence in Malta Compare with Other EU Countries?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(7), pages 1-31, July.
    12. Sapio, Alessandro, 2019. "Greener, more integrated, and less volatile? A quantile regression analysis of Italian wholesale electricity prices," Energy Policy, Elsevier, vol. 126(C), pages 452-469.
    13. Darracq Pariès, Matthieu & Notarpietro, Alessandro & Kilponen, Juha & Papadopoulou, Niki & Zimic, Srečko & Aldama, Pierre & Langenus, Geert & Alvarez, Luis Julian & Lemoine, Matthieu & Angelini, Elena, 2021. "Review of macroeconomic modelling in the Eurosystem: current practices and scope for improvement," Occasional Paper Series 267, European Central Bank.
    14. Rettig, E. & Fischhendler, I. & Schlecht, F., 2023. "The meaning of energy islands: Towards a theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    15. Gaudard, Ludovic & Avanzi, Francesco & De Michele, Carlo, 2018. "Seasonal aspects of the energy-water nexus: The case of a run-of-the-river hydropower plant," Applied Energy, Elsevier, vol. 210(C), pages 604-612.
    16. Aaron George Grech & Noel Rapa, 2019. "A reassessment of external demand’s contribution to Malta’s economic growth," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-13, December.

    More about this item

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:mlt:ppaper:0517. 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: Emmanuel Cachia (email available below). General contact details of provider: https://www.centralbankmalta.org/ .

    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.