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Patrik Söderholm - One of the best experts on this subject based on the ideXlab platform.
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Post-Doctoral Fellow
2011Co-Authors: Patrik SöderholmAbstract:Abstract: This paper analyzes short-run Interfuel Substitution between fossil fuels in West European power generation. The problem is studied within a restricted translog cost model, which is estimated by pooling time-series data across eight countries in West Europe. The empirical results indicate that Interfuel Substitution in existing power plants is substantial, especially that between oil and gas. This is consistent with the notion that short-run fuel Substitution primarily occurs in multi-fuel fired plants, by switching load between different single-fuel fired plants, or by some conversions of electric plants to be able to burn alternate fuels as well. Acknowledgements: Financial supports from Vattenfall, the Kempe Foundations, and SNS Energy are gratefully acknowledged, as are helpful comments from Ernst Berndt, Denny Ellerman and Marian Radetzki on earlier versions of this paper. Responsibility for any remaining errors, however, Trends in energy demand are affected increasingly by the role of electricity and thus by the fuel choices that are made for the generation of electric power. Consequently, electricity generation will most likely be the focus of many policy initiatives aimed at altering the future fuel mix in primary energy use. This is reinforced by the facts that power generation in general contribute
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Fossil fuel flexibility in west European power generation and the impact of system load factors
Energy Economics, 2001Co-Authors: Patrik SöderholmAbstract:This paper analyzes short-run Interfuel Substitution in west European power generation, and the impact of system load factors on fossil fuel choice. The problems are studied within a restricted translog cost share model. The paper concludes that Interfuel Substitution in existing power plants is substantial, especially that between oil and gas. This is consistent with the notion that short-run fuel Substitution takes place in dual- or multi-fired plants, by switching load between different single-fired plants, and by some conversions of power plants to be able to burn alternate fuels. The empirical investigation also indicates that the system load factor is a notable determinant of fossil fuel choices in west Europe, and the paper ends with an assessment of the fuel consequences of some load management schemes in the region.
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Environmental Regulations and Interfuel Substitution in the Power Sector: A Generalized Leontief Model:
Energy & Environment, 2000Co-Authors: Patrik SöderholmAbstract:This paper analyzes short-run Interfuel Substitution between fossil fuels in West European power generation, and the impact of SO2 regulations on fossil fuel choices. These problems are studied within a short-run Generalized Leontief cost function. The empirical results indicate that price-induced Interfuel Substitution in existing power plants is substantial in West Europe, especially that between oil and gas. This is consistent with the notion that short-run fuel Substitution primarily occurs in multi-fired plants, by switching load between different single-fired plants, and/or by converting power plants to be able to burn alternate fuels as well. With regard to the impact of the SO2 regulations, the empirical investigation provides few conclusive answers. In general it is hard to separate the individual effects of the SO2 regulations on the one hand, and other fuel affecting policies on the other. Still, during the last 20 years the aggregate effect of public energy policies seems to have been coal and...
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Fuel flexibility in the West European power sector
Resources Policy, 2000Co-Authors: Patrik SöderholmAbstract:This paper analyzes the role of fuel flexibility in the West European power generation sector. Fuel flexibility is recognized to have two important features. It improves the power sector's ability to respond to fuel supply interruptions, and it permits short-run price-induced Interfuel competition. The security of supply issue is examined by assessing the ability of the West European power sector to respond to an interruption in gas imports. This ability is found to be high. Especially the use of oil in dual- and multi-fired plants provides a significant buffer against a potential gas supply cut. In an attempt to measure the degree of price-induced Interfuel Substitution in West European power generation two flexible cost functions are employed; the Translog and the Generalized Leontief. The cross-price elasticities of fossil fuel demand generated by these indicate notable short-run Interfuel Substitution in Western Europe, in particular between oil and gas. Since emerging competitive electricity and gas markets normally induce utilities to reduce fuel costs through improved fuel contracting, short-run Interfuel Substitution is likely to remain significant also in the future. This has important implications for European energy markets and policies.
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Short-Run Interfuel Substitution in West European Power Generation: A Restricted Cost Function Approach
1999Co-Authors: Patrik SöderholmAbstract:This paper analyzes short-run Interfuel Substitution between fossil fuels in West European power generation. The problem is studied within a restricted translog cost model, which is estimated by po ...
Yuen Yee Yen - One of the best experts on this subject based on the ideXlab platform.
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Interfuel Substitution, hydroelectricity consumption and CO_2 emissions mitigation in Malaysia: evidence from a transcendental logarithm (trans-log) cost function framework
Environmental Science and Pollution Research, 2020Co-Authors: Mufutau Opeyemi Bello, Sakiru Adebola Solarin, Yuen Yee YenAbstract:The main objective of this paper is to estimate the Interfuel Substitution elasticities between hydropower and the fossil fuels of coal and natural gas used in the generation of electricity for Malaysia. Due to the violation of the assumption behind the ordinary least squares (OLS) method on account of the correlated error terms in the system of equations, the econometrics techniques of seemingly unrelated regression (SUR) was adopted to obtain the parameter estimates using dataset that covers the period 1988 to 2016. The main finding is that there exists substantial Substitution possibility between hydropower and fossil fuels in the generation of electricity for Malaysia. CO_2 emissions mitigation scenarios were also conducted to explore the possible effects of substituting fossil fuels for hydropower to generate electricity. The results show that switching from high carbon-emitting fuels to renewable energy such as hydropower will substantially reduce CO_2 emission and assist the country towards achieving the carbon emissions reduction targets. Policy recommendations are offered in the body of the manuscript.
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Interfuel Substitution, hydroelectricity consumption and CO2 emissions mitigation in Malaysia: evidence from a transcendental logarithm (trans-log) cost function framework.
Environmental science and pollution research international, 2020Co-Authors: Mufutau Opeyemi Bello, Sakiru Adebola Solarin, Yuen Yee YenAbstract:The main objective of this paper is to estimate the Interfuel Substitution elasticities between hydropower and the fossil fuels of coal and natural gas used in the generation of electricity for Malaysia. Due to the violation of the assumption behind the ordinary least squares (OLS) method on account of the correlated error terms in the system of equations, the econometrics techniques of seemingly unrelated regression (SUR) was adopted to obtain the parameter estimates using dataset that covers the period 1988 to 2016. The main finding is that there exists substantial Substitution possibility between hydropower and fossil fuels in the generation of electricity for Malaysia. CO2 emissions mitigation scenarios were also conducted to explore the possible effects of substituting fossil fuels for hydropower to generate electricity. The results show that switching from high carbon-emitting fuels to renewable energy such as hydropower will substantially reduce CO2 emission and assist the country towards achieving the carbon emissions reduction targets. Policy recommendations are offered in the body of the manuscript.
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Interfuel Substitution hydroelectricity consumption and co2 emissions mitigation in malaysia evidence from a transcendental logarithm trans log cost function framework
2018Co-Authors: Mufutau Opeyemi Bello, Sakiru Adebola Solarin, Yuen Yee YenAbstract:The main objective of this paper is to estimate the Interfuel Substitution elasticities between hydropower and the fossil fuels of coal and natural gas used in the generation of electricity for Malaysia. Due to the violation of the OLS method on account of the correlated error terms in the system of equations, the econometrics techniques of seemingly unrelated regression (SUR) was adopted to obtain the parameter estimates using dataset that covers the period 1988 to 2016. The main finding is that there exists substantial Substitution possibility between hydropower and fossil fuels in the generation of electricity for Malaysia. CO2 emissions mitigation scenarios were also conducted to explore the possible effects of substituting fossil fuels for hydropower to generate electricity. The results show that switching from high carbon emitting fuels to renewable energy such as hydropower will substantially reduce CO2 emission and assist the country towards achieving the carbon emissions reduction targets. Policy recommendations are offered in the body of the manuscript.
Apostolos Serletis - One of the best experts on this subject based on the ideXlab platform.
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Interfuel Substitution evidence from the markov switching minflex laurent demand system with bekk errors
2019Co-Authors: Apostolos SerletisAbstract:We investigate Interfuel Substitution in the United States using the minflex Laurent demand system and a century of data (from 1919 to 2012). We relax the assumption of constant parameters in the demand system, and also relax the homoskedasticity assumption, instead assuming that the covariance matrix of the errors is time-varying. Our results are consistent with theoretical regularity and indicate that the Morishima elasticities of Substitution are always positive for all pairs of the energy goods (suggesting substitutability), but exhibit large swings across two regimes, generally being higher in the high demand volatility regime before the 1950s.
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a century of Interfuel Substitution
Journal of Commodity Markets, 2017Co-Authors: A Nurul K M Hossain, Apostolos SerletisAbstract:Abstract We investigate the demand for energy and the degree of substitutability among fossil fuels in the United States using the Normalized Quadratic (NQ) expenditure function and (to our knowledge) the longest span prices and quantities that have ever been studied before, from 1919 to 2012. In doing so, we merge the empirical energy demand systems literature with the recent financial econometrics literature, relaxing the homoskedasticity assumption and instead assuming that the covariance matrix of the errors of the flexible demand system is time-varying. We generate inference, in terms of a full set of elasticities, consistent with neoclassical microeconomic theory and the data generating process. Our results are in line with earlier findings in the literature based on shorter duration samples and different methodologies. They have important implications for climate policy intervention designed to reduce greenhouse gas emissions. We show that there is a small but statistically significant Substitution possibility between crude oil and natural gas, but not between crude oil and coal. We also provide evidence that natural gas is a substitute for coal when the price of coal changes, but coal is not a substitute for natural gas when the price of natural gas changes.
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Interfuel Substitution in the united states
World Scientific Book Chapters, 2012Co-Authors: Apostolos SerletisAbstract:The following sections are included:IntroductionTheoretical FoundationsThe Energy SubmodelThe Translog Energy Price Aggregator FunctionTheoretical RegularityEmpirical ModellingElasticitiesSeparability TestingThe United States DataEmpirical EvidenceConclusions
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international evidence on aggregate short run and long run Interfuel Substitution
Energy Economics, 2011Co-Authors: Apostolos Serletis, Govinda R. Timilsina, Olexandr VasetskyAbstract:In this paper, we build on recent work by Serletis et al. (2010, in press) and report short- and long-run estimates of aggregate Interfuel Substitution for a number of OECD and non-OECD countries. In doing so, we use recent pooled intercountry data (since 1980), and state-of-the-art advances in microeconometrics, including duality theory and flexible functional forms. Also, motivated by the widespread practice in the empirical energy demand literature of ignoring theoretical regularity, we estimate our model subject to global curvature (but not monotonicity), using methods developed by Diewert and Wales (1987). We provide inference, and also a policy perspective, using parameter estimates that are consistent with the theoretical regularity conditions of neoclassical microeconomic theory.
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Public Disclosure Authorized Public Disclosure Authorized On Interfuel Substitution Some International Evidence
2010Co-Authors: Apostolos Serletis, Govinda R. Timilsina, The World BankAbstract:This paper estimates Interfuel Substitution elasticities in selected developing and industrialized economies at the national and sector levels. In doing so, it employs state-of-the-art techniques in microeconometrics, particularly the locally flexible normalized quadratic functional forms, and provides evidence consistent with neoclassical microeconomic theory. The results indicate that the Interfuel Substitution elasticities are consistently below unity, revealing the limited ability to substitute between major energy commodities (i.e., coal, oil, gas, and electricity). While the study finds some evidences of larger Interfuel Substitution potential in high-income economies as compared to that in the middle- and lowincome economies in the industrial and transportation sectors, no such evidence is observed in the residential and electricity generation sectors or at the national level. The implication is that Interfuel Substitution depends on the structure of the economy, not the level of economic development. Moreover, a higher change in relative prices is needed to induce switching toward a lower carbon economy. This paper—a product of the Environment and Energy Team, Development Research Group—is part of a larger effort i
Mufutau Opeyemi Bello - One of the best experts on this subject based on the ideXlab platform.
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Interfuel Substitution, hydroelectricity consumption and CO_2 emissions mitigation in Malaysia: evidence from a transcendental logarithm (trans-log) cost function framework
Environmental Science and Pollution Research, 2020Co-Authors: Mufutau Opeyemi Bello, Sakiru Adebola Solarin, Yuen Yee YenAbstract:The main objective of this paper is to estimate the Interfuel Substitution elasticities between hydropower and the fossil fuels of coal and natural gas used in the generation of electricity for Malaysia. Due to the violation of the assumption behind the ordinary least squares (OLS) method on account of the correlated error terms in the system of equations, the econometrics techniques of seemingly unrelated regression (SUR) was adopted to obtain the parameter estimates using dataset that covers the period 1988 to 2016. The main finding is that there exists substantial Substitution possibility between hydropower and fossil fuels in the generation of electricity for Malaysia. CO_2 emissions mitigation scenarios were also conducted to explore the possible effects of substituting fossil fuels for hydropower to generate electricity. The results show that switching from high carbon-emitting fuels to renewable energy such as hydropower will substantially reduce CO_2 emission and assist the country towards achieving the carbon emissions reduction targets. Policy recommendations are offered in the body of the manuscript.
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Interfuel Substitution, hydroelectricity consumption and CO2 emissions mitigation in Malaysia: evidence from a transcendental logarithm (trans-log) cost function framework.
Environmental science and pollution research international, 2020Co-Authors: Mufutau Opeyemi Bello, Sakiru Adebola Solarin, Yuen Yee YenAbstract:The main objective of this paper is to estimate the Interfuel Substitution elasticities between hydropower and the fossil fuels of coal and natural gas used in the generation of electricity for Malaysia. Due to the violation of the assumption behind the ordinary least squares (OLS) method on account of the correlated error terms in the system of equations, the econometrics techniques of seemingly unrelated regression (SUR) was adopted to obtain the parameter estimates using dataset that covers the period 1988 to 2016. The main finding is that there exists substantial Substitution possibility between hydropower and fossil fuels in the generation of electricity for Malaysia. CO2 emissions mitigation scenarios were also conducted to explore the possible effects of substituting fossil fuels for hydropower to generate electricity. The results show that switching from high carbon-emitting fuels to renewable energy such as hydropower will substantially reduce CO2 emission and assist the country towards achieving the carbon emissions reduction targets. Policy recommendations are offered in the body of the manuscript.
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Interfuel Substitution hydroelectricity consumption and co2 emissions mitigation in malaysia evidence from a transcendental logarithm trans log cost function framework
2018Co-Authors: Mufutau Opeyemi Bello, Sakiru Adebola Solarin, Yuen Yee YenAbstract:The main objective of this paper is to estimate the Interfuel Substitution elasticities between hydropower and the fossil fuels of coal and natural gas used in the generation of electricity for Malaysia. Due to the violation of the OLS method on account of the correlated error terms in the system of equations, the econometrics techniques of seemingly unrelated regression (SUR) was adopted to obtain the parameter estimates using dataset that covers the period 1988 to 2016. The main finding is that there exists substantial Substitution possibility between hydropower and fossil fuels in the generation of electricity for Malaysia. CO2 emissions mitigation scenarios were also conducted to explore the possible effects of substituting fossil fuels for hydropower to generate electricity. The results show that switching from high carbon emitting fuels to renewable energy such as hydropower will substantially reduce CO2 emission and assist the country towards achieving the carbon emissions reduction targets. Policy recommendations are offered in the body of the manuscript.
Jevgenijs Steinbuks - One of the best experts on this subject based on the ideXlab platform.
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fossil fuel producing economies have greater potential for industrial Interfuel Substitution
Energy Economics, 2015Co-Authors: Jevgenijs Steinbuks, Badri NarayananAbstract:Abstract This study analyzes industrial Interfuel Substitution in an international context using a large unbalanced panel dataset of 63 countries. We find that compared to other countries fossil fuel producing economies have higher short-term Interfuel Substitution elasticities. This difference increases further in the long run as fossil fuel producing countries have a considerably longer adjustment of their fuel-using capital stock. These results imply lower economic cost for policies aimed at climate abatement and more efficient utilization of energy resources in energy-intensive economies.
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Fossil Fuel Producing Economies Have Greater Potential for Interfuel Substitution∗
2014Co-Authors: Jevgenijs Steinbuks, Badri G. NarayananAbstract:This study extends the literature on Interfuel Substitution by investi-gating the role of transactions costs and technological adjustment, focus-ing specifically on differences across countries with different potential for fossil fuel production. We find that fossil fuel producing economies have higher elasticities of Interfuel Substitution. Our simulations show that, compared to the baseline case of uniform elasticities, energy and climate policies result in a greater Substitution among different sources of energy for countries with larger potential to produce fossil fuels. These results are important because they imply lower economic cost for policies aimed at climate abatement and more efficient utilization of energy resources in energy-intensive economies
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Fossil Fuel Producing Economies Have GreaterPotential for Interfuel Substitution
2013Co-Authors: Jevgenijs Steinbuks, Badri NarayananAbstract:This study extends the literature on Interfuel Substitution by investigating the role of transactions costs and technological adjustment, focusing specifically on differences across countries with different potential for fossil fuel production. We find that fossil fuel producing economies have higher elasticities of Interfuel Substitution. Our simulations show that, compared to the baseline case of uniform elasticities, energy and climate policies result in a greater Substitution among different sources of energy for countries with larger potential to produce fossil fuels. These results are important because they imply lower economic cost for policies aimed at climate abatement and more efficient utilization of energy resources in energy-intensive economies. Keywords: climate policies, dynamic linear logit, energy subsidies, fossil fuel production, GTAP-E model, Interfuel Substitution JEL: E22, H25, Q41
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Interfuel Substitution and Energy Use in the U.K. Manufacturing Sector
The Energy Journal, 2012Co-Authors: Jevgenijs SteinbuksAbstract:This paper investigates Interfuel Substitution, separately accounting for different types of energy use in the U.K. manufacturing sector. Econometric models of Interfuel Substitution are applied to aggregate energy use, as well as to a specific energy use process--thermal heating--where Interfuel Substitution is technologically feasible. Compared to the aggregate data, the estimated own-price elasticities for all fuels and the cross-price elasticities for fossil fuels are considerably higher for thermal heating processes. Nonetheless, electricity is found to be a poor substitute for other fuels based on both aggregate data and, separately, for the heating process. An increase in real fuel prices from the Climate Change Levy in 2001 resulted in higher Substitution elasticities based on aggregate data, and lower Substitution elasticities for the thermal heating process. The results of a counterfactual decomposition of change in the estimated elasticities indicate that technological change was the major determinant of the differences in observed elasticities before and after the energy price increase.
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Interfuel Substitution and Energy Use in the UK Manufacturing Sector
2010Co-Authors: Jevgenijs SteinbuksAbstract:This paper investigates Interfuel Substitution in the UK manufacturing sector. Econometric models of Interfuel Substitution are applied to energy inputs aggregated by their energy use, and separately for thermal heating processes, where Interfuel Substitution is technologically feasible. Compared to aggregate data, estimated own-price fuel demand elasticities for all fuels and cross-price elasticities for fossil fuels are considerably higher for thermal heating processes. Nonetheless,electricity is found to be a poor substitute for other fuels based on both aggregate data and separately for the heating process. This study also finds that an increase in real fuel prices resulted in higher Substitution elasticities based on aggregate data, and lower Substitution elasticities for the heating process. The results of counterfactual decomposition of change in the estimated elasticities indicate that technological change was the major determinant of the differences in observed elasticities before and after the energy price increase.