Archive for category Energy

Restructuring Spanish Regulators

CNMC: The Story of an Unfinished Reform (“La CNMC: la historia de una reforma inacabada), by Juan Delgado and Héctor Otero. PAPELES DE ECONOMÍA ESPAÑOLA. Regulación y política de defensa de la competencia en España; no. 135. September 2015.

Entry blog (In Spanish): La CNMC: Historia de una Reforma InacabadafuncasBlog, 25 September 2015.

In 2012, the Spanish government proposed the merger of the antitrust authority together with six sectoral regulators in a single authority, the National Commission for Markets and Competition (CNMC). The reform was justified by the need for better coordination between regulators, to improve the consistency of their respective decisions and to reduce their operational costs. The design of the new institution however does not necessarily guarantee that those potential benefits will be materialized. Improving decision-making mechanisms, creating a more horizontal organization and strengthening the financial and functional autonomy of the regulator would facilitate the generation of synergies that so far do not seem to have arisen.

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Power Markets Design

Diseño de Mercados Eléctricos (Power Market Design), by Juan Delgado

Published in “Tecnología, Economía y Regulación en el Sector Energético”. C. Aranzadi and C. López,  (eds.). Academia Europea de Ciencias y Artes/European Academy of Sciences and Arts, 2015.

Starting in the late 80s , the power sector has evolved from a vertically integrated structure, controlled by heavily regulated monopolists, to an unbundled scheme combining liberalized and regulated activities. Given the physical characteristics of electricity, markets do not arise naturally. The creation of power markets relies heavily on the design of the institutional framework and, in particular, the design of (wholesale and retail) markets, the regulation of access to networks and the nature and functions of the system operator. There is not a unique optimal market design. The solutions adopted in different countries differ in several dimensions such as the degree of centralization of wholesale markets, the role of the system operator and the ability of consumers to choose their supplier. These dimensions determine different wholesale and retail electricity market designs .

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Local Programmes for Energy Efficiency

ECONOMIC AND ENVIRONMENTAL IMPACT OF THE ENERGY EFFICIENCY PLAN OF THE CITY OF BILBAO, by Juan Delgado, Ibon Galarraga, Mikel González and Josu Lucas

DYNA Energía y Sostenibilidad, January 2015, vol. 4, no. 1, p.1-8.

Energy efficiency programmes aim to rationalize energy consumption and reduce carbon emissions. In the past 10 years an increasing number of cities and regions have developed efficiency plans. Energy efficiency programmes generally require new upfront investments in more efficient infrastructure and equipment which are offset by lower recurring energy costs. This paper analyses the economic and (direct and indirect) environmental effects of an energy efficiency plan based on a real case study in the city of Bilbao. Our analysis strives to differentiate between new and additional measures included in the plan and those that would have been implemented in any case, and to take into account alternative uses of the funds allocated to the programme. These issues are critical in understanding the real economic and environmental effects of such plans and to avoid double accounting for multiplicatier effects.

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The Good Regulator

El buen regulador no habla español (The good regulator doesn’t speak Spanish), by Juan Delgado.

Alternativas Económicas, November 2014.

The recent merger in Spain of the antitrust agency and several industry regulators into one single agency poses several questions on institutional design. This op-ed assesses the new institution in relation to the international best-practices.

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Climate Policy Fine-tuning

Interactions Between Climate Policies in the Power Sector, by Paulina Beato and Juan Delgado

Published in Green Energy and Efficiency: An Economic Perspective. A. Ansuátegi, J. Delgado and I. Galarraga (eds.). Ed. Springer, 2014.

For the purpose of limiting global temperature increases, governments have designed a broad range of policy instruments in order to reduce carbon emissions such as carbon taxes, carbon markets and renewable energy support policies. Although such instruments aim to serve the same purpose, they are rarely fine-tuned to guarantee their consistency. Carbon markets are in theory the most efficient instrument to reduce emissions. The use of other instruments is justified under the presence of circumstances that undermine the effectiveness of carbon markets such as market design flaws or innovation externalities. In such cases, the optimal climate policy mix should be carefully designed to take into account the potential interactions between policy instruments.

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The Economics of Green Energy and Efficiency

Green Energy and Efficiency: An Economic Perspective. A. Ansuátegi, J. Delgado and I. Galarraga (eds.). Ed. Springer, 2014.

9783319036328Energy efficiency technologies represent a key driver for the reduction of energy demand through a more efficient use of energy. The progressive switch to green sources of energy allows using the same amount of energy while reducing carbon emissions. The combination of measures to increase the efficient use of energy and to switch to cleaner sources of energy allows reducing energy demand and reducing the emissions per unit of energy produced. Energy efficiency and the development of alternative sources of clean energy are key elements for the attainment of global climate objectives. The cost and effectiveness of efficiency measures and of the transition to a greener energy world is not however absent of controversy.

This book presents up-to-date research on the economics of green energy and energy efficiency from a variety of perspectives, from a general overview of the economics of green energy and efficiency to the detailed analysis of specific policies and investment decisions.

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Integrating Antitrust and Regulatory Powers: Does it work?

Integrating Regulatory and Antitrust Powers: Does It Work? Case Studies from Spain and Mexico by Juan Delgado and Elisa Mariscal

Published in Competition Policy International – CPI Journal, Vol. 10, No. 1, Spring 2014

There are a wide variety of possible structures for regulatory regimes in countries. This article focuses on the analysis of multi-purpose regulators that combine regulatory and antitrust powers, such as the Mexican IFT and Cofece, as well as the Spanish CNMC. We focus on institutional design, review the existing literature on the pros and cons of single-purpose vs. multi-purpose regulators, and use the new Spanish and the Mexican institutional settings to contrast how such pros and cons are designed to operate on paper and how they do so in real life. Our goal is to look for evidence, at the very initial stage of the reforms in both these countries, of whether these countries are moving closer to a rule of law equilibrium.

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