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During the last years, European intraday power markets have gained importance for balancing forecast errors due to the rising volumes of intermittent renewable generation. However, compared to day-ahead markets, the drivers for the intraday price process are still sparsely researched. In this paper, we propose a modelling strategy for the location, shape and scale parameters of the return distribution in intraday markets, based on fundamental variables. We consider wind and solar forecasts and their intraday updates, outages, price information and a novel measure for the shape of the merit-order, derived from spot auction curves as explanatory variables. We validate our modelling by simulating price paths and compare the probabilistic forecasting performance of our model to benchmark models in a forecasting study for the German market. The approach yields significant improvements in the forecasting performance, especially in the tails of the distribution. At the same time, we are able to derive the contribution of the driving variables. We find that, apart from the first lag of the price changes, none of our fundamental variables have explanatory power for the expected value of the intraday returns. This implies weak-form market efficiency as renewable forecast changes and outage information seems to be priced in by the market. We find that the volatility is driven by the merit-order regime, the time to delivery and the closure of cross-border order books. The tail of the distribution is mainly influenced by past price differences and trading activity. Our approach is directly transferable to other continuous intraday markets in Europe. [ABSTRACT FROM AUTHOR]

This paper studies when and under what conditions the actions undertaken by the power plants involved in China's emission trading scheme (ETS) pilot became cost effective. Based on unique plant-level panel data and the difference-in-differences strategy, we identify that an insignificant initial reduction in cost efficiency occurred at the announcement stage for power plants in the pilot provinces; however, the cost efficiency of the pilot plants increased significantly following formal policy implementation. Additionally, the by-stage treatment effects differed across the pilot provinces due to localized market and non-market variations. Localized conditions of higher marketization, stricter policy enforcement, and lower carbon dependence enhanced this positive effect. The synthetic control results confirmed this variation in the policy effects. The carbon trading pilots resulted in improved efficiency in power plants in Shanghai, Guangdong, and Tianjin during the period 2013--2017, with an associated total cost saving of approximately 29.75 million RMB. To enhance the efficacy of the ETS policy, our findings suggest that the design of the policy should consider localized external factors. [ABSTRACT FROM AUTHOR]

Proved undeveloped reserves (PUDs) are typically assigned a value of zero when the cost to produce them is greater than the prevailing forward curve. The zero valuation occurs despite the option value contained in even the most expensive PUDs. While PUDs are worthless if spot and forward prices forever remain below the cost to produce them, they have positive value if either the spot price or a contracted futures price exceeds the cost at any time. Since the probability that future prices exceed cost is positive, PUDs have positive option value despite the industry practice. Zero valuation occurs primarily because financing is unavailable when hedging is contingent on uncertain future outcomes where probabilities cannot be modeled. The failure of models to recognize contingent hedging is a limitation that leads to chronically undervalued PUDs in marginal and sub-marginal price environments. The literature is silent on contingent hedging where financing is dependent on forward curves that will not exist until some future date. This paper introduces a model that addresses these limitations. [ABSTRACT FROM AUTHOR]

In this paper, we consider a simultaneous modeling of good and bad outputs. We use an input distance function (IDF) with endogenous inputs as well as endogenous bad outputs, which is novel in the literature. Moreover, we model input efficiency to depend on the production of bad outputs which allows us to investigate whether emissions of pollutants (bad outputs) are related to technological performance (technical efficiency). We also model production of each bad output with a spatial structure separately, each depending on production of good outputs, inputs and other exogenous variables. These bad output production functions allow us to estimate both direct and indirect effects of good output on the production of bad outputs, which may be of special interest because they show the cost (to the society) in terms of releasing pollutants to the environment in order to increase production of good outputs. We apply the new technique to a data set on U.S. electric utilities with four bad outputs, three inputs and two good outputs. We used a Bayesian technique to estimate the model which is a system consisting of the input distance function, reduced form equations for each input, dynamics of inefficiency and bad output production technology--separately for each. Empirically, bad outputs are found to affect inefficiency positively. Percentage increases in inefficiency due to a percentage increase in each bad output are found to vary from 0.225% to 0.42%. Energy prices are found to be positively related to inefficiency. From the spatial specifications of bad outputs, we find that the spillover effects of increasing production of good outputs account for the majority of the total effect, indicating that neighborhood effects are more important than own effects. This means, the neighboring utilities played a crucial role indicating "contagion" of practices. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the combined effect of carbon policies and price controls in cross-border trade of electricity on power generation investments. It has been shown that price controls in cross-border trade of electricity may negatively affect renewable energy investments. However, the assessment of the impact of the simultaneous adoption of carbon policies and energy price controls has still not been addressed. Assessing this interaction is important to find out whether carbon policies can offset the negative impact of price controls on renewable energy investments or not. Results show that carbon policies can partially offset the negative impact of price controls, and that cap-and-trade programs are more effective to prevent this negative impact than carbon taxes. On the other hand, high levels of carbon taxes combined with price control regulation may increase renewable capacity investments, but without completely offsetting the negative effect of the price controls. [ABSTRACT FROM AUTHOR]

Continuous trading is currently becoming the standard for intraday electricity markets. In this paper, we propose frequent auctions as a viable alternative. We argue that batching orders in auctions potentially leads to lower liquidity cost, more reliable, less noisy price signals, and allows for better alignment of market outcomes with the technical realities of the transmission grid. In an empirical study, we compare the German continuous intraday market with counterfactual outcomes from frequent auctions. We find that traded volumes tend to be higher for continuous trading; however, the auction market benefits from lower liquidity costs and less noisy price signals. Furthermore, we critically discuss the suitability of continuous trading in the presence of network constraints and technical restrictions of conventional units. Taken together these findings suggest that in sparsely traded intraday markets, pooling orders in frequent auctions may be beneficial. [ABSTRACT FROM AUTHOR]

Human consumption of scarce ecological resources is at the heart of the climate change crisis. Mitigating climate change will require changes in consumer behavior. Further, to respond effectively, policymakers need information on the environmental impact of individuals' behaviors. In this paper, we study the effect of socio-demographic characteristics and personality traits on individuals' environmental impact measured by their ecological footprint. We also investigate consumers' willingness to pay for "green" goods. Using survey data from the Netherlands, first, we construct individuals' ecological footprint. The survey also uses a 50-item personality scale developed by Goldberg (1992) to construct five personality traits. We find that individuals with higher personal income, less than a high school education, males, the employed, and people living in rural areas are associated with a higher EF. We also find that consumers' WTP and demand are responsive to price increases in high-emitting goods and personality traits. We contribute to our understanding of the influence of socio-demographic and personality characteristics on the actual ecological footprint at the individual level. Further, we contribute to the economic literature on consumers' WTP for "green" products as well as the ongoing discussion on using market-based solutions to tackle climate change. [ABSTRACT FROM AUTHOR]

This paper is the first to investigate the relationship between the energy efficiency of dwellings, measured by the energy performance certificate (EPC), and utility cost inclusion in rental prices. First, we investigate potential drivers behind the decision to include utility costs in rents. We find that labeled dwellings are more likely to include utility costs and that this likelihood is higher among energy-effi- cient dwellings than among inefficient dwellings. Next, we surprisingly find that utility costs seem to be under-capitalized in energy-inefficient dwellings. These results are confirmed with the counterfactual decomposition approach. Overall, the findings indicate that the EPC labeling policy may be important for both landlord and tenant decision-making and may enhance market efficiency. [ABSTRACT FROM AUTHOR]