How price responsive is industrial demand for natural gas in the United States?

Li, Raymond; Woo, Chi-Keung; Tishler, Asher; Zarnikau, Jay

doi:10.1016/j.jup.2021.101318

Cited by 8 publications

(2 citation statements)

References 69 publications

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“…Together with the estimated 23% consumption reduction in September 2022, this would imply a small own-price elasticity of −0.04. This figure is in line with previous findings and can be explained by the fact that industry may be able to pass on higher energy costs to end consumers 25 . Two aspects should be considered when interpreting this number.…”

Section: Drivers Of the Crisis Responsesupporting

confidence: 93%

Natural gas savings in Germany during the 2022 energy crisis

et al. 2023

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Section: Drivers Of the Crisis Responsesupporting

confidence: 93%

Natural gas savings in Germany during the 2022 energy crisis

et al. 2023

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“…(1) $1/MMBtu increase in the Henry Hub natural gas price in the 20-year period. The Henry Hub price is expected to rise because of (a) increasing US export of LNG to reduce Europe's dependence on Russia's supply of natural gas (EIA, 2022); (b) a slowdown in shale gas development due to environmental concerns about hydraulic fracturing (Sovacool, 2014); (c) electricity generation's increasing demand for natural gas based on the EIA's Annual Energy Outlook 2022; 13 and (d) inter-fuel substitution between natural gas and petrol products like fuel oil and diesel (Li et al, 2022).…”

Section: Wind Power Purchase Agreementmentioning

confidence: 99%

Incremental wind energy development in the Midcontinent Independent System Operator electricity markets of the United States

Qi,

Cao,

Woo

et al. 2023

JEM

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This paper projects how much incremental wind energy development (WED) may occur without causing inadequate investment incentives (aka missing money) for wind generation and natural-gas-fired generation in the day-ahead market (DAM) and real-time market (RTM) of the Midcontinent Independent System Operator (MISO) in the US. Using a large sample of hourly data for the 82-month period of 01/01/2014 -10/31/2020, it documents that the DAM's hourly investment incentives move with (a) the day-ahead forecast of daily natural gas price; (b) MISO's day-ahead hourly requirements of ancillary services; (c) MISO's zonal day-ahead hourly schedules of nuclear generation, wind generation, and must-run generation; and (d) MISO's zonal day-ahead forecasts of hourly loads. Findings based on the RTM's hourly data tell a similar story. Further, the negative effect of incremental WED on investment incentives over the forward-looking period of 2023-2042 is offset by the positive effect of rising natural gas price, nuclear plant retirement, declining must-run generation, and growing demand. In the extreme case of nuclear plant retirement and zero must-run generation, incremental WED of up to ~441% of the existing wind generation level may occur as a market-based outcome without missing money in MISO's DAM.

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Effects of Energy Price Shocks on Germany’s Economy and Private Households

Lutz

Becker

2023

Studies in Energy, Resource and Environmental Economics

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The massive rise in energy prices in the wake of the Ukraine crisis and the Western sanctions against Russia is putting a great strain on the economy and consumers. Germany is particularly dependent on Russian energy imports. With the desire to reduce dependence on Russian imports, the pressure for climate neutrality is intensifying. The reports of the IPCC recently show again the high pressure to act. The EU is aiming for climate neutrality by 2050, and Germany would like to reach the target by 2045.This chapter aims to examine the macroeconomic effects of the drastic price increase for energy sources in Germany. For this purpose, a scenario in which energy prices on the world market experience a significant shock is compared with a reference scenario until 2030. The scenarios are implemented in the economy–energy–environment model PANTA RHEI. The scenario comparison shows the different effects of energy price increase on important macroeconomic variables such as price level for consumers, GDP, and employment. Distributional effects across income classes are considered with particular attention to low-income households, which spend higher shares of their income for energy and cannot afford to pay for energy efficiency improvement. A brief comparison with other modelling studies shows that climate mitigation has a positive effect on the economy as a whole and can be an important lever for containing the losses caused by the current high energy prices.

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How price responsive is industrial demand for natural gas in the United States?

Cited by 8 publications

References 69 publications

Natural gas savings in Germany during the 2022 energy crisis

Natural gas savings in Germany during the 2022 energy crisis

Incremental wind energy development in the Midcontinent Independent System Operator electricity markets of the United States

Effects of Energy Price Shocks on Germany’s Economy and Private Households

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