Shahrouz Abolhosseini

Market Design for Trading Commoditized Renewable Energy

Information and communication technology plays an important role in achieving a higher level of energy efficiency. In particular, energy efficiency can be achieved by integrating information technology into electricity networks to enable the interaction between suppliers and customers (smart grids). Power generation by renewable energy sources can also benefit from this integration of technologies. Distributed power generation, which will be the basis of renewable energy production, encourages the production of renewable energy resources and, accordingly, decreases transmission loss, increases energy saving, and enhances energy efficiency. Therefore, integrating distributed, renewable energy sources and smart grids within local marketplaces for trading renewable energy in small units can be a promising combination. In this paper, we propose a structure of a marketplace for renewable energy sources, design a market mechanism for trading in this market, and outline the requirements for such a market to function efficiently. Finally, we conclude and present recommendations to policymakers to provide incentives to generators to increase deployment of renewable energy sources and to end users to save electricity and to consume clean energy.

Impact of Renewable Energy Development on Carbon Dioxide Emission Reduction

The increased concerns about climate change have made renewable energy sources an important topic of research. Previous studies have analyzed carbon emission savings, using renewable energy in connection with life-cycle analysis methods. It is shown that after a certain period, economic growth leads to the promotion of environmental quality. However, econometric modeling critiques have opposed the results of these studies. One reason is that the effectiveness of governance-related parameters has previously been neglected. In this research, we analyze the impact of renewable energy development on carbon emission reduction. We estimate a model to evaluate effectiveness of renewable energy development, technological innovation, and market regulations in carbon emission reduction. The empirical results are based on a panel data estimation using the EU-15 countries’ data observed from 1995 to 2010. The finding shows that the effects of a negative climate change could be mitigated by governance-related parameters instead of economic development.

Regulatory Frameworks for Renewable Energy Sources

Fossil fuels are the main source of energy worldwide and constituted about 87 % of total primary energy consumption in 2012. A growing number of researches show that there is a strong relation between climate change and the carbon dioxide (CO2) emissions which are produced through energy production and consumption. Ongoing concerns about climate change have made renewable energy sources an important component of the world energy consumption portfolio. It is projected that renewable energy will have the highest growth rate among world energy sources. Many scholars applied different methodologies to examine the relationship between energy consumption and economic growth in order to analyze the impacts of energy policy. Also, carbon emission savings made by renewable energy usage have previously been analyzed by applying the life-cycle analysis method. Based on previous researches, economic growth promotes environment quality after a certain period. This study is a review of the effectiveness of governance-related parameters. The impacts of renewable energy development on carbon emission reduction is analyzed. Furthermore, we examine the effectiveness of technological innovation and market regulations applied for renewable energy deployments. Empirical results show that climate change mitigation could be affected more by governance-related parameters than economic development.

Alternative Renewable Energy Production Technologies

Electricity consumption will comprise an increasing share of global energy demand during the next two decades. In recent years, the increasing prices of fossil fuels and concerns about the environmental consequences of greenhouse gas emissions have renewed the interest in the development of alternative energy resources. In particular, the Fukushima Daiichi accident was a turning point in the call for alternative energy sources. Renewable energy is now considered a more desirable source of fuel than nuclear power due to the absence of risk and disasters. Considering that the major component of greenhouse gases is carbon dioxide, there is a global concern about reducing carbon emissions. In this regard, different policies could be applied to reducing carbon emissions such as enhancing renewable energy deployment and encouraging technological innovations. Two main solutions may be implemented to reduce CO2 emissions and overcome the problem of climate change: replacing fossil fuels with renewable energy sources as much as possible and enhancing energy efficiency. In this paper, we discuss alternative technologies for enhancing renewable energy deployment and energy use efficiency.

Financing Renewable Energy Development

Considering that the major part of greenhouse gases is carbon dioxide, there is a global concern aimed at reducing carbon emissions. Additionally, major consumer countries are looking for alternative sources of energy to avoid the impact of higher fossil fuel prices and political instability in the major energy-supplying countries. In this regard, different policies could be applied to reduce carbon emissions such as enhancing renewable energy deployment and encouraging technological innovation and creation of green jobs. There are three main support mechanisms employed by governments to finance renewable energy development programs: feed-in tariffs, tax incentives, and tradable green certificates. Considering that many of the promising technologies to deploy renewable energy require investment in small-scale energy production systems, these mechanisms could be used to enhance renewable energy development at the desired scale. Employing a carbon emission tax or emission trading mechanism could be considered ideal policies to mitigate emissions at the lowest cost. The comparison of feed-in tariffs and renewable portfolio standard policies showed that the former is good when a policy to develop renewable energy sources with a low level of risk for investors is considered. However, the latter is an appropriate policy when a market view policy is applied by the government.

The Energy and Environment Relationship

An expanding body of research shows that there is a strong relationship between climate change and carbon dioxide (CO2) emissions. CO2 emission pollutants are primarily produced by combustion of fossil fuels. Therefore, energy consumption is considered as the main cause of climate change. In this chapter, we focus on the current situation of renewable energy consumption and the global outlook. We also review the roles of economic growth, energy security, and CO2 emission reduction as the main drivers in the development of renewable energy. The global energy-related CO2 emissions have risen. Developing non-OECD countries that continue to be heavily dependent on fossil fuel consumption account for much of this growth. These countries need to meet their continuously rising energy demand. Reducing CO2 emission and local pollutants constitutes a core part of environmental concerns. More countries are expected to implement policies for deploying renewable energy technologies in the power sector. Among other objectives these policies need to achieve is an increase in power generation through renewable energy sources so that the unit cost decreases to the level of other energy sources.