Economic theory predicts that high renewable electricity production reduces the price of electricity, also referred to as the "merit-order effect". Although the merit-order effect is only one of several consequences of renewable production on the electricity system, it is crucial to determine its size for the economic evaluation of renewable energies. In this paper we present a comprehensive overview of relevant past research results on the price effect of renewables. Additionally, we conduct a new empirical analysis of the price effect of renewable production for the Austrian-German region, a market that clearly qualifies for a merit-order effect analysis given its characteristics. Based on the review and our own analysis, we show that the merit-order effect varies depending on the region and the assessment method chosen. We also find that the size of this effect is less dispersed throughout different markets than previously suggested by the literature.

T The european union (eu) energy policy focuses on achieving a balance between three main pillars: increase the security of supply, reduce the impact of climate change, and improve economic competitiveness. To accomplish these objectives, the eu has been creating competitive conditions that internalize environmental externalities, and it has also actively promoted renewable energy.renewable energy promotion has long been a driving factor of the eu energy policy. For the 2020 horizon, european legislation established mandatory national targets of 20% of final energy consumption from renewable energy resources (reSs), a 20% reduction of greenhouse gas emissions from 1990 levels, and a 20% headline target on energy efficiency. For the image licensed by graphic stock

Determining the cost of energy saving measures and the magnitude of their potential application is the first and essential step to correctly design energy efficiency policies, which are in turn a keystone for energy transitions. This is particularly relevant for MENA countries, which feature energy intensities among the highest in the world. This paper presents a methodology for assessing reductions in energy demand based on expert evaluations; the methodology incorporates several improvements over previous similar studies. Our results suggest a significant potential for energy savings, and recommend different policy designs based on the different costs and potentials of different energy saving measures.

Past research has mainly applied linear cointegration analysis to study the relationship of crude oil prices with the prices of other commodities. However, recent methodological innovations in cointegration analysis allow for a more thorough analysis of the co-movement of commodity prices and detect asymmetric and thresholds co-movements. Following Enders and Siklos [1] and Hansen and Seo [2], we apply threshold cointegration analysis, detecting co-movements that earlier studies based on linear cointegration analysis could not detect. We find that adjustments to positive and negative deviations from the long-run equilibrium are asymmetric for copper, food and agricultural raw materials in the short-run. Moreover, the adjustments for aluminum and nickel are symmetric. The price Granger causalities behave as expected for metals and agricultural raw material prices. Food prices, however, behave differently. In sum, the results of this paper underscore the importance of consistently testing nonlinear cointegration and point out the complex interactions that take place between the markets of oil and other commodities.

No abstract