The Other Side of the Boom: Energy Prices and Subsidies in Latin America and the Caribbean during the Super-Cycle

Marchán, Estefanía; Espinasa, Ramón; Yépez-García, Ariel

doi:10.18235/0000916

Cited by 10 publications

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“…Energy subsidies are frequently used by governments to mitigate the impact of high and volatile oil prices on consumers, prevent inflation, boost competitiveness, and protect the standard of living of vulnerable segments of the population (Kojima, 2016;Marchan et al, 2017). Such subsidies come with high fiscal costs and introduce price distortions that promote wasteful usage of energy, increase greenhouse gas (GHG) emissions, and hamper the development of energy efficiency and renewable energy technologies (IEA, 2014).…”

Section: Introductionmentioning

confidence: 99%

Managing the distributional effects of energy taxes and subsidy removal in Latin America and the Caribbean

et al. 2018

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Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public.

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Section: Introductionmentioning

confidence: 99%

Managing the distributional effects of energy taxes and subsidy removal in Latin America and the Caribbean

et al. 2018

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“…Considering these additional opportunity costs, estimated total fossil fuel subsidies are 1.5 times higher than officially reported 2 and almost equivalent to government expenditures on education and health in 2012 (Table S14). Marchán et al (2017) estimate that between 2008 and 2014, Ecuador had the third highest fuel subsidies relative to GDP in LAC countries, only surpassed by Bolivia and Venezuela.…”

Section: Energy Supply and Subsidiesmentioning

confidence: 99%

“…Besides the targeted explicit subsidies, in Ecuador implicit electricity subsidies are in place due to opaque electricity costs. For instance, public electricity companies exclude capital costs from energy cost calculation (Asamblea Nacional, 2015) and capital costs are frequently not included in cost accounting for transmission and distribution system operators (Marchán et al, 2017). Another example is the use of subsidized fuels in thermal power generation (Executive Decree No.…”

Section: Energy Supply and Subsidiesmentioning

confidence: 99%

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Can government transfers make energy subsidy reform socially acceptable? A case study on Ecuador

et al. 2020

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Copyright© 2019 Inter-American Development Bank. This work is licensed under a Creative Commons IGO 3.0 Attribution NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons org/!icenses/by-nc-nd/3 0/igo/ !ega!code) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the I DB's name for any purpose other than for attribution, and the use of I DB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail. Note that link provided above includes additional terms and conditions of the license. The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. AbstractEnergy subsidies account for about 7% of Ecuador's yearly public spending, or two thirds of the fiscal deficit. Removing these subsidies would yield clear economic and environmental benefits and help implement climate targets set in the Paris Agreement. However, expected adverse effects on vulnerable households can make reforms politically difficult. To inform policy design, we use household survey data from Ecuador in combination with augmented input-output data to assess the distributional impacts of energy subsidy reform. We find that in absolute terms energy subsidies benefit richer households more than poor ones. Relative to household income, subsidy removal without compensation would be regressive for diesel and LPG, progressive for gasoline...

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“…For instance, the subsidized electricity generation cost is 24.31 USc/kWh, which has not been audited to clarify the real cost [17]. Furthermore, Ecuador ranks third in terms of fossil fuel subsidies in Latin America [18]. This represents 5.4% of the Ecuadorian Gross Domestic Product (GDP) and 14% of the government revenues [19].…”

Section: Introductionmentioning

confidence: 99%

Decarbonizing the Galapagos Islands: Techno-Economic Perspectives for the Hybrid Renewable Mini-Grid Baltra–Santa Cruz

et al. 2020

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The fragile ecosystem of the Galapagos Islands is being affected by population growth, intensive tourism, the exploitation of local resources and the high consumption of imported fossil fuels. This unsustainable development model makes the provision of services such as electricity a challenge. This research investigates the hybrid renewable mini-grid Baltra-Santa Cruz, which represents 62% of the electricity generation mix of the archipelago. This study aims to support the Galapagos Zero Fossil Fuel Initiative and the Sustainable Development Goal 7 through the reduction in diesel consumption and electricity generation costs. To do so, HOMER Pro, a specialized hybrid renewable mini-grid planning tool, is used to perform several techno-economic assessments, focusing on different electricity demand scenarios. Therefore, multiple pathways are compared to identify the most reliable alternatives towards the progressive decarbonization of this hybrid system. The results indicate that installing 18.25 MWp of photovoltaic and 20.68 MWh of battery capacity could reduce the Levelized Cost of Electricity (LCOE) from 32.06 to 18.95 USc/kWh, increasing the renewable energy (RE) share from 18% to 39%. Additionally, the successful application of energy efficiency measures would even reduce the LCOE to 17.10 USc/kWh. What is more, distributed energy is considered the most attractive way to involve islanders in the energy transition process. Finally, this paper offers a comprehensive business model proposal to achieve a resilient energy supply, based on a combination of auctions and energy community models, which demands high political will, reliable and innovative regulations and social awareness about energy use.Sustainability 2020, 12, 2282 4 of 47 and implement RE projects. In addition, the Ecuadorian Electricity Master Plan (PME) 2016-2025 [44] contains the list of priority projects to increase renewable electricity generation. Moreover, those possible new partners can propose additional RE initiatives thanks to the General Regulation of the LOSPEE. This regulation [43] is based on the targets of the National Plan of Development 2017Development -2021 which prioritize RE resources exploitation to reduce the dependency of fossil fuels. What is more, new companies interested in developing RE projects can receive an income-tax-exemption for five years [46].As regards distributed generation, the photovoltaic microgeneration to electricity self-sufficiency for final consumers of electricity regulation [47] and its amendment [48] promote the installation of PV systems up to 300 kWp per user in the residential sector and below 1000 kWp per user in the commercial and industrial sectors. This regulation is not limited to rooftop PV systems. A net-metering scheme is applied to compensate electricity costs. Thanks to this mechanism, consumers are billed for their "net" electricity use and the associated costs become credits for the following months if the electricity balance is positive for users. [47]. The National Rate Schedule for ...

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The Other Side of the Boom: Energy Prices and Subsidies in Latin America and the Caribbean during the Super-Cycle

Cited by 10 publications

References 15 publications

Managing the distributional effects of energy taxes and subsidy removal in Latin America and the Caribbean

Managing the distributional effects of energy taxes and subsidy removal in Latin America and the Caribbean

Can government transfers make energy subsidy reform socially acceptable? A case study on Ecuador

Decarbonizing the Galapagos Islands: Techno-Economic Perspectives for the Hybrid Renewable Mini-Grid Baltra–Santa Cruz

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