Institute of Energy Economics at the University of Cologne

BACKGROUND: The shift from solitary to social behavior is one of the major evolutionary transitions. Primitively eusocial bumblebees are uniquely placed to illuminate the evolution of highly eusocial insect societies. Bumblebees are also invaluable natural and agricultural pollinators, and there is widespread concern over recent population declines in some species. High-quality genomic data will inform key aspects of bumblebee biology, including susceptibility to implicated population viability threats. RESULTS: We report the high quality draft genome sequences of Bombus terrestris and Bombus impatiens, two ecologically dominant bumblebees and widely utilized study species. Comparing these new genomes to those of the highly eusocial honeybee Apis mellifera and other Hymenoptera, we identify deeply conserved similarities, as well as novelties key to the biology of these organisms. Some honeybee genome features thought to underpin advanced eusociality are also present in bumblebees, indicating an earlier evolution in the bee lineage. Xenobiotic detoxification and immune genes are similarly depauperate in bumblebees and honeybees, and multiple categories of genes linked to social organization, including development and behavior, show high conservation. Key differences identified include a bias in bumblebee chemoreception towards gustation from olfaction, and striking differences in microRNAs, potentially responsible for gene regulation underlying social and other traits. CONCLUSIONS: These two bumblebee genomes provide a foundation for post-genomic research on these key pollinators and insect societies. Overall, gene repertoires suggest that the route to advanced eusociality in bees was mediated by many small changes in many genes and processes, and not by notable expansion or depauperation.

“How long will researchers working in adjoining fields…abstain from expressing serious concern about the splendid isolation in which academic economics now finds itself?” Wassily Leontief, Nobel laureate in economics, asked almost two decades ago (Leontief 1982, p. 104). The question is extremely important, because economics is the foundation on which most decisions affecting agriculture, fisheries, the environment, and, indeed, most aspects of our daily lives are based. Natural scientists, including biological scientists, may have particular views on this or that economic policy, but few question the legitimacy of economics as a tool. We believe that, paraphrasing the great Prussian military historian Carl von Clausewitz, economics is too important to leave to the economists, and that natural scientists should not leave the procedures by which we undertake economics up to economists alone. Instead, natural scientists must contribute to a new discourse about the means, methods, and ends of economics. This article is a response to Leontief's question. It is essential that economics be based on sound principles and that the policies generated from it have a solid foundation. Neoclassical economics, the form of economics derived in the mid-19th century that prevails today, focuses on problems related to value decisions, the behavior of economic actors, and the working of markets. These problems belong to the sphere of the social sciences (many of which, incidentally, have their own problems with neoclassical economic theory; see, for example, Marris 1992). But the wealth that is distributed in the markets must be produced in the hard sphere of the material world where all operations must obey the laws and principles of physics, chemistry, and biology. Our concern is that most production models of economics are not based on these biophysical laws and principles; in fact, they tend to ignore them (Georgescu-Roegen 1971, Daly 1973, 1977, Kümmel et al. 1985, Leontief 1982, Cleveland et al. 1984, Hall et al. 1986, Hall 1992, 2000). This disregard of the biophysical aspects of production by economists was not the rule historically. Quesnay and other members of the 18th-century French physiocrat school focused on the use of solar radiation by biotic organisms and the role of land in generating wealth by capturing this energy through agricultural production. The classical economics of Adam Smith, David Ricardo, and Karl Marx encompassed both the physical origin and the distribution of wealth (Ricardo 1891, Marx 1906, Smith 1937). Podolinsky, Geddes, Soddy, and Hogben were biological and physical scientists of the 19th and early 20th centuries who thought deeply about economic issues (Martinez-Alier 1987, Christensen 1989, Cleveland and Ruth 1997). Thus we find the degree to which neoclassical economics has displaced classical economics curious, almost a historical accident. The primary reason for this displacement was the superior mathematical rigor of neoclassical economics and the development of the marginal utility theory, which solved the “water vs. diamonds” paradox that classical economics could not. But the underlying biophysical perspective of Smith and Ricardo was not incorporated into the new mathematical elegance of the “marginal revolution.” Consequently, major decisions that affect millions of people and most of the world's ecosystems are based on neoclassical economic models that, although internally consistent and mathematically sophisticated, ignore or are not sufficiently consistent with the basic laws of nature. This leads to the failure of those economic policies that run counter to these laws and endanger sustainable development. In this article we examine this issue in more detail, making a case for including the laws of nature in economic theory and analysis, and in the policies derived from this theory, as carefully and explicitly as the assumptions on human preferences and choices. Both natural scientists and even many economists have been leveling severe criticisms at the basis of neoclassical economics for many years (Soddy 1926, Boulding 1966, Georgescu-Roegen 1966, 1971, Daly 1973, Binswanger and Ledergerber 1974, Cleveland et al. 1984, Hall et al. 1986, Ayres 1996, 1999). These criticisms, however, are largely ignored by neoclassical economists, and the rest of the scientific community seems to be largely unaware of them. We believe that it is time to exhume these criticisms and add to them more recent analytic work that gives them even greater validity. Past criticisms of neoclassical economics from the perspective of natural scientists can be summarized as three fundamental arguments: (1) The structure of the basic conceptual neoclassical model is unrealistic because it is not based on the biophysical world and the laws governing it, especially thermodynamics (Figure 1a); (2) the boundaries of analysis are inappropriate because they do not include the real processes of the biosphere that provide the material and energy inputs, the waste sinks, and the necessary milieu for the economic process (Figure 2); and (3) the basic assumptions underlying the models used have not been put forth as testable hypotheses but rather as givens. We substantiate these three criticisms below and present a new model of industrial production that we believe further supports our criticisms and our assessment of the importance of energy. In this new model, the output of the economic system and the maintenance of its components depend upon continuous input of energy into the system, as is true for all organisms and ecosystems. “Anything as important in industrial life as power deserves more attention than it has yet received from economists…. A theory of production that will really explain how wealth is produced must analyze the contribution of the element energy” (Tryon 1927). “The decisive mistake of traditional economics…is the disregard of energy as a factor of production” (Binswanger and Ledergerber 1974). Contemporary economics pays only marginal attention to the first and second laws of thermodynamics. This is a serious conceptual flaw and an obstacle to the design of economic policies that can successfully meet the challenges of pollution, resource scarcity, and unemployment. The two laws say that nothing happens in the world without energy conversion and entropy production, with the consequence that every process of biotic and industrial production requires the input of energy. Because of unavoidable entropy production, the valuable part of energy (exergy) is transformed into useless heat at the temperature of the environment (anergy), and usually matter is dissipated, too. This results in pollution and, eventually, exhaustion of the higher grade resources of fossil fuels and raw materials. Human labor, living on food, has been and continues to be replaced (at least in part) by energy-driven machines in the routine production of goods and services. Although the first and second laws of thermodynamics are the most thoroughly tested and validated laws of nature, and they state explicitly that it is impossible to have a perpetual motion machine—that is, a machine that performs work without the input of exergy—the basic neoclassical economic model is a perpetual motion machine, with no required inputs or limits (Figure 1a). Most economists have accepted that incomplete model as the basis for their analyses and have relegated energy and other resources to unimportance in those analyses (e.g., Denison 1979, 1984). This attitude was fixed in the minds of most economists by the analysis of Barnett and Morse (1963), who found no indication of increasing scarcity of raw materials, as determined by their inflation-corrected price, for the first half of the 20th century (Smith 1989). Their analysis, although cited by nearly all economists interested in the depletion issue, was nonetheless seriously incomplete. Cleveland showed that the only reason that decreasing concentrations and qualities of resources were not translated into higher prices for constant quality was because of the decreasing price of energy and its increasing use in the exploitation of increasingly lower-grade reserves in the United States and elsewhere (Cleveland 1991). Thus, although economists have argued that natural resources are not important to the economy, the truth is that it is only because of the abundant availability of many natural resources that economics can assign them low monetary value, despite their critical importance to economic production. The perspective of Nobel laureate in economics Robert M. Solow is interesting. In 1974 he considered the possibility that “the world can, in effect, get along without natural resources,” because of the technological options for the substitution of other factors for nonrenewable resources; he noted, however, that if “real output per of resources is of which in is not too from where we are is 1974, p. Solow is of the that production without use of natural 1992, is for more and work on the production and natural especially energy but all aspects of the of the We believe that the to put a monetary value on these although in is to the issue, if only because are based on human that, in are on the basis of too The neoclassical of the low importance of energy and to the first in the development of neoclassical economics. the was not on the of wealth as on its distribution and the of Consequently, the early in economics with a model of of without their production. a of mathematical assumptions on it was that, through the of goods in an results in which all their in the that it is not to the of a without the of at least other This of markets is considered as the foundation of economics. It where work at But the model was to include production, the of the physical of wealth was to the of the distribution of wealth as a consequence of the model In the neoclassical with the of factor by to factor This that in the model the with which the production factors contribute to the physical of wealth are determined by the of In other on social structure and are used to the physical importance of production the historical of the of the production factor because in industrial the of on the is only to of the factor 1997). economists tend to energy as a factor of production or they that the contribution of a of energy input to the of output is only to of to 1979, 1984). it can be argued that energy has a in production not because it is important than or as a production but rather because of the work of the biosphere and the it has been abundant and not all of its use are in its price the of energy has more was by the of the two energy price in the and which on economic (Cleveland et al. 1984, 1984, Neoclassical models that do not include energy explain the of output by the of the factor inputs and a that is to economists to a of the neoclassical it is a theory of that the factor in economic we a factor by its is an in the of the biosphere is more important to economic production than its present price The human fossil and other fuels to and and to and as organisms and ecosystems use energy to and and biotic has been with increasing energy use per This has been especially critical in et al. and are in human to natural resources by natural energy to goods and services. economic production, biotic production, can be as the process of matter into both physical and of at of production, may of to matter through the use of energy The perspective of economics in the hard sphere of physical production, where energy and material and are important, is biophysical economics. It must the social sphere with the basic model used in neoclassical economics (Figure is that it not include boundaries that in the physical or of economic We believe that at a should be as to include the necessary the of and the for the economic process to the system, the biosphere 1977, Cleveland et al. 1984, 1992, Ayres 1996, et al. 2000). this assessment we believe that is the that should be used to the physical aspects of an It the of the biosphere for the first of economic production and as a milieu for all further the of energy and matter the the of these of nature from the of which the of their into the goods and of should be to every in an economics that the in which the economic process in the real world is Natural scientists models to be tested they are or economic with is based on economic models that, although and are not validated 1977, Cleveland et al. 1984, 1992, Ayres to economic models are even in the where these models are (e.g., and 2000). Nobel laureate in economics Wassily Leontief noted, many economic models are in a of the structure and the operations of a real economic they are based on of more or but to but (Leontief Most do not the degree to which economics is with as the least for a and or the of a use and economic In theory, all economists up with the to a In fact, based on and and mathematically not have been analyses for example, the results have that the behavior of real people in or was from the assumptions of a neoclassical model 1982, Smith 1989, Hall 1991). the this is not because social models of human behavior and they do upon which of the of human is by the of people to which the model is the other the economists assign to their models is because economic models do not because they the mathematical rigor of example, are used in economics in to the in In fact, in a is an energy the of and energy in a system from which can the of motion of the of the In neoclassical production theory, the price is by the of the output in the of the production This to the of a physical which is by the of energy in real 1989). This only in an of economic if the in a state of by a that in the on the the factor to the production system, to its state of as we in the this has not been three decades of industrial in the United and the of low energy the have been on the of the the in the state of This state is by inputs of and inputs of energy with Because of technological this has not yet been and or impossible because both classical and neoclassical were of production factors as they in These have been more or to in the industrial no have been to the basic theory for and its In industrial the of all energy conversion and the and necessary for their and fundamental components are heat and and by energy and by provide the of the with that are to those of to if These more than if energy for and process In primary energy per per was in and in the United This to about and energy per in and in the United about per of energy our In to the economic importance of energy we present an analysis of economic three decades for the United and 1982, 1989, Kümmel et al. 1985, Kümmel et al. 2000). This analysis how the of energy most of the by neoclassical We the fundamental that as by the output of value is by the of the production factors and energy in with are the of the production are important but do not contribute by to the of value Their monetary value is not in the time on value with which we our if in of of will be In in which processes a important the as a factor from the is that human contribution to economic that be by machine of and that be by factor value and may be in the run but important in the long In fact, has been about to energy for a is of in inflation-corrected monetary and is for are per and for per and are from the energy and and and from the to by the of work and that is to by energy and the output be by the work and necessary for its The technological of and are by Kümmel 1982, Kümmel et al. 2000). these physical of and are not we them and the constant We all to their for a a analysis of we production which the of the output as the inputs of labor, and with time we for an of in to model the of Our for the production from (1) in essential from that of neoclassical We do not and to the of labor, and energy in factor This of of production and is a of the fundamental hypotheses underlying the neoclassical Instead, we these an analysis and a of three the of the production The constant is the of the in the monetary of the of goods and making up the output of that to an time of the production can be by and to in The of production, and must be to This important on the factor in and of (1) with the and the energy production This however, the laws of thermodynamics because it for the almost substitution of energy by Thus, it should be in for the Our model the limits to to the on and The is of the of to the used has been by Kümmel et al. We tested our production with the of the United States and and the are by the of and include the We were to consistent of for these which about and of we the for the in and the inputs of and for the United States from to from to 1992, and from to into the we the in with the the of the three have been determined by the to the time of output and 1977, the et al. 1992). This results in the of and in that is, a time of the and The which include the production factor the output of all three production for all years considered with only including the by the two major energy The energy were by the first and second in and in the of the and its and the and The of in response to the price in the of the energy of the and the of power by the These of are the of the decisions of and to in energy the of the first economic a role as the of the time to is a consequence of our of as a a is, that is and models the the of and and the energy continuous of the and and the results for and the 2000). In in the run the by are with the by the of labor, and energy. and time of the production can be time of at least a without and the of production in and three decades is by the with of than et al. 2000). production with mathematically or more of production and 2000). The results of our analysis in all three that the power of energy is more important than that of or labor, and nearly an of than the of energy in factor This from the of production of labor, and which are for the United for and for In the of production of is than In as the United energy about about and about of factor This that of the fundamental assumptions of neoclassical economics, that is, the of of production and has not been the of production in the United and the three to these have been into energy with increasingly for labor, which is in the that its of production is than that of energy. This substitution of energy for time because of on the of the for those and that be produced in a and and laws and the of the industrial have not yet the the importance of a biophysical basis for economics, our analysis has important for economics and for The of in routine with the of energy and is to the present This the because goods and produced in can be to Thus, most will if the the and of and energy are not example, by the low price of fossil fuels to their power as is it the of and energy which could the for fossil fuels and of the of We believe that the problems of resource and pollution can be successfully only if the role of energy as a factor of production is into in economic and social not scarcity and economic of a resource must be in of both and resource the of scarcity, many important aspects of scarcity because it is based on Most important, as and is that about the of the of a resource can the in scarcity of that with the that on and not decreasing p. an of this in the real price of was at nearly its despite the that most of the time at which production will from to Cleveland 1999). The and of sustainable development as and by most economists must be thought through more the for energy and for all economic Hall for a analysis of is in more important in of its on the than its monetary value as by the of the economic and which to be to degree in in response to a in the price of has been and on the basis of of is, energy by the of energy to per of energy in this and development or through of goods for energy et al. In policies based on neoclassical economic analyses from and to the the of resources to a that of and of can be In the the of the may be But those are not in neoclassical in the where resources are in the analysis, their value is example, many their at a price below their Hall and the has been into its on fossil which was the of for and in to should more importance to their natural resources than they do the of the economic tend to for that in may have been by biophysical example, how the in the production may have the economic that to the of the be as and of and with human material largely a of the per availability of these and agricultural most and and are as on the availability of energy as example, most in agricultural have not from alone. In fact, for many to be no in but rather only an in the of that to the we the and of a (e.g., to up more and generating for are increasingly by derived inputs from the 2000). In the of to be related to the of use of land or et al. Hall Human material is derived by energy and from natural and the of to ends determined by human and, to of primary production is in or by the human et al. 1986, 1997). models a economy, because has a biophysical to a model have are and models of the of energy through of the But these do not include the of nature as the energy with the of solar and other important components of the economic that include the energy of nature and the human This is an analysis, which to energy a to its quality This has been at an to and used as the basis for et al. economics for to model the economic process by of with the of human and and We must however, that a and model that the biophysical basis of the is in the is the utility of a biophysical perspective into We believe that it is about as they are or of how we them for analytic and we can a new of economists about the real operations of human and the to the of the natural We believe that is especially important because gives to that are at least and even to of economists will not be to issues as and and in the of the and the biosphere as to be a price and into the these will have to be as fundamental components of the economic We do not how that can be without from a biophysical We a new of economists and natural scientists to from this We and Christensen for for critical for analytic the contribution and the for views of the The neoclassical of how or natural labor, and to in for and the factors of production and goods and in for and This a perpetual motion Our based on a physical of the required to to We have the basic energy and material inputs and that are essential if the economic processes in are to from Daly A more and model of how The second of this the milieu which the rest of the Natural and that natural resources and and the milieu essential for all other economic use economic to natural resources and them to raw materials. are used by and other to goods and services. These goods and are distributed by the to and waste heat to the environment as waste We believe this to be the model of how a real and of industrial production in the and In all three the of the is to the of the output and the and of energy inputs and at the in the United nearly constant in and in The time of can be found at the

A large share of integrated wind power causes technical and financial impacts on the operation of the existing electricity system due to the fluctuating behaviour and unpredictability of wind power. The presented stochastic bottom-up electricity market model optimises the unit commitment considering five kinds of markets and taking explicitly into account the stochastic behaviour of the wind power generation and of the prediction error. It can be used for the evaluation of varying electricity prices and system costs due to wind power integration and for the investigation of integration measures

Public transport operators (PTOs) increasingly face a challenging problem in switching from conventional diesel to more sustainable battery electric buses (BEBs). In this study, we optimize the opportunity fast-charging schedule of transit BEB networks in order to minimize the charging costs and the impact on the grid. Two mixed-integer linear programming (MILP) formulations that use different discretization approaches are developed and compared. Discrete-Time Optimization (DTO) resembles a time-expanded network that discretizes the time and decisions to equal discrete slots. Discrete-Event Optimization (DEO) discretizes the time and decisions into nonuniform slots based on arrival and departure events in the network. In addition to the DEO’s higher practicability, the comparative computational study carried out on the transit-bus network in the city of Rotterdam, Netherlands, shows that the DEO is superior to the DTO in terms of computational performance. To show the potential benefits of the optimal schedule, it is compared with two reference common-sense greedy strategies: First-in-First-Served and Lowest-Charge-Highest-Priority.

A ship-mounted sodar was used to measure wind turbine wakes in an offshore wind farm in Denmark. The wake magnitude and vertical extent were determined by measuring the wind speed profile behind an operating turbine, then shutting down the turbine and measuring the freestream wind profile. These measurements were compared with meteorological measurements on two offshore and one coastal mast at the same site. The main purposes of the experiment were to evaluate the utility of sodar for determining wind speed profiles offshore and to provide the first offshore wake measurements with varying distance from a wind turbine. Over the course of a week, 36 experiments were conducted in total. After quality control of the data (mainly to exclude rain periods), 13 turbine-on, turbine-off pairs were analyzed to provide the velocity deficit at hub height as a function of the distance from the turbine. The results are presented in the context of wake measurements at other coastal locations. The velocity deficit is predicted with an empirical model derived from onshore measurements based on transport time dependent on surface roughness. The measurements are closer to those predicted using an onshore rather than an offshore roughness despite the relatively low turbulence experienced during the experiments.

BACKGROUND: To date, systematic reviews on the relationship between the volume of specific diagnoses and procedures and patient outcomes have several limitations, including the omission of the most recent publications. OBJECTIVE: To investigate the relationship between hospital and physician volume and patient mortality rate for all diagnoses and interventions in health care. RESEARCH DESIGN: Medline and the Cochrane Library were searched from January 1990 to December 2000 for all studies published in Dutch, English, French, German, and Italian. The following Boolean search statement was used: hospitals AND volume AND (outcome OR mortality OR quality). Studies were included in which patient enrollment ended within 10 years of the current study and that were adjusted for case-mix. For each diagnosis and intervention, the study most likely to provide an unbiased estimate of the effect of volume on mortality rate was identified using a specific algorithm (best study). RESULTS: A total of 34 diagnoses and interventions with at least one qualifying study on the volume-outcome relationship were identified. The summary odds ratio/relative risk for the best studies on hospital and physician volume were 0.87 (95% confidence interval [CI], 0.85-0.89) and 0.87 (95% CI, 0.81-0.94), respectively. From the best studies on hospital volume, 48.5% (16 of 33) were published either in 1999 or 2000. CONCLUSIONS: There is evidence for a volume-mortality relationship for hospitals and physicians. The use of appropriate methods for analyzing additional diagnoses and interventions as well as a continuous systematic evaluation of the evidence is recommended.

Heterogeneous data, different definitions and incompatible models are a huge problem in many domains, with no exception for the field of energy systems analysis. Hence, it is hard to re-use results, compare model results or couple models at all. Ontologies provide a precisely defined vocabulary to build a common and shared conceptualisation of the energy domain. Here, we present the Open Energy Ontology (OEO) developed for the domain of energy systems analysis. Using the OEO provides several benefits for the community. First, it enables consistent annotation of large amounts of data from various research projects. One example is the Open Energy Platform (OEP). Adding such annotations makes data semantically searchable, exchangeable, re-usable and interoperable. Second, computational model coupling becomes much easier. The advantages of using an ontology such as the OEO are demonstrated with three use cases: data representation, data annotation and interface homogenisation. We also describe how the ontology can be used for linked open data (LOD).

To comply with sustainability goals, many companies buy green energy to serve their energy demand. This is typically done by engaging in bilateral power purchase agreements (PPA) with renewable energy producers (REP). A PPA can be flexibly structured, but the core principle is that a buyer (company) agrees to buy future energy production of a seller (REP) at an agreed-upon fixed price. PPAs are financially attractive for sellers, providing price certainty, unlike trading in electricity markets. However, PPAs can bring quantity uncertainty for buyers due to the uncertainty of future green energy delivery. This uncertainty in the long-term endangers sustainability targets, and in the short-term complicates reliable and cost-efficient demand matching. Thus, multiple strategies have been used in PPAs to encourage sellers to provide accurate and good-faith predictions of their short-term and longer-term future production. Yet, it has been shown that REPs can have incentives to misreport predicted values. This has discouraged some companies from engaging in PPAs. In this paper, we first investigate how PPA structure and pricing can incentivize REPs to provide more reliable predictions. This shifts the risk of production uncertainty to REPs, increasing the chance that REPs adopt batteries. We further study how having batteries for REPs affects their own revenue as well as the reliability of their energy predictions for buyers. We use analytical and simulation approaches to propose a decision tree for a win-win PPA structure, which improves reliability for buyers while maintaining profitability for REPs.

Energy plays only a minor role in orthodox theories of economic growth, because standard economic equilibrium conditions say that the output elasticity of a production factor, which measures the factor's productive power, is equal to the factor's share in total factor cost. Having commanded only a tiny cost share of about 5 percent so far, energy is often neglected altogether. On the other hand, energy conversion in the machines of the capital stock has been the basis of industrial growth. How can the physically obvious economic importance of energy be reconciled with the conditions for economic equilibrium, which result from the maximization of profit or overall welfare? We show that these equilibrium conditions no longer yield the equality of cost shares and output elasticities, if the optimization calculus takes technological constraints on the combinations of capital, labor, and energy into account. New econometric analyses of economic growth in Germany, Japan, and the USA yield output elasticities that are for energy much larger and for labor much smaller than their cost shares. Social consequences are discussed.

Congestion management schemes have taken a prominent place in current electricity market design discussions. In this paper, the implications of establishing zonal pricing in Europe are analyzed with regard to potential zonal delimitations and associated effects on total system costs. Thereby, a nodal model sets the benchmark for efficiency and provides high-resolution input data for a cluster analysis based on Ward's minimum variance method. The proposed zonal configurations are tested for sensitivity to the number of zones and structural changes in the electricity market. Furthermore, dispatch and redispatch costs are computed to assess the costs of electricity generation and transmission. The results highlight that suitable bidding zones are not bound to national borders and that losses in static efficiency resulting from the aggregation of nodes into zones are relatively small.

In many net-zero energy scenarios, electrolytic hydrogen is a key component to decarbonize hard-to-abate sectors and to provide flexibility to the power sector. In current energy systems that are not yet fully decarbonized, however, the hydrogen ramp-up raises the concern of increasing power sector emissions. To avoid such additional emissions, recent EU regulation defines requirements for electrolytic hydrogen to qualify as green along three dimensions: the additionality, the proximity, and the simultaneity of renewable electricity generation. Focusing on the temporal dimension, this article investigates the effects of a strict hourly simultaneity requirement, full temporal flexibility, as well as simultaneity exemptions in the current EU regulation. We develop a model of a renewables-hydrogen project, consisting of individual wind turbines, solar panels, hydrogen electrolysis, and hydrogen storage. As a novelty, the model optimizes not only dispatch but also investment decisions, and we expose it to different regulatory conditions. We show that a flexible definition of green hydrogen does not necessarily increase power sector emissions. By contrast, requiring hourly simultaneity implies that rational investors build much larger wind turbines, hydrogen electrolyzers, and hydrogen storage than needed—meaning additional costs and embedded carbon, underutilized assets, and a potential slow-down of green hydrogen deployment. These adverse effects can only partially be mitigated by including solar panels and by the EU simultaneity exceptions. We argue that current energy transition trends further lower the risk of increasing power sector emissions under a flexible definition of green hydrogen and recommend this as the way forward for a sustainable hydrogen policy.

Renewable energies are meant to cover a large share of the future electricity demand. However, the availability of wind and solar power depends on local weather conditions. In this article, we analyze the impact of the stochastic availability of wind and solar energy on the cost-minimal power plant mix and the related total system costs. To determine optimal conventional, renewable and storage capacities for different shares of renewables, we apply a stochastic investment and dispatch optimization model to the European electricity market. The model considers stochastic feed-in structures and full load hours of wind and solar technologies and different correlations between regions and technologies. Key findings include a lower value of fluctuating renewables and higher system costs compared to deterministic investment and dispatch models. Furthermore, the value of solar technologies is—relative to wind turbines—underestimated when neglecting negative correlations between wind speeds and solar radiation. Keywords: Stochastic programming, Electricity, Renewable energy

The seaborne steam coal market has changed in recent years; demand has grown fast, important players have emerged, and since 2007 prices have increased significantly and remained relatively high. In this paper, we analyze steam coal market equilibria in the years 2006 and 2008 by testing for two possible market structure scenarios: perfect competition and an oligopoly setup with major exporters competing in quantities. The assumed oligopoly scenario cannot explain market equilibria for any year. While we find that the competitive model simulates market equilibria well in 2006, the competitive model is yet not able to reproduce real market outcomes in 2008. The analysis shows that not all available supply capacity was utilized in 2008. We conclude that either unknown capacity bottlenecks or more sophisticated non-competitive strategies were the cause for the high prices in 2008.

A significant share of the world's undiscovered oil and natural gas resources are assumed to lie under the seabed of the Arctic Ocean. Up until now, the exploitation of the resources especially under the European Arctic has largely been prevented by the challenges posed by sea ice coverage, harsh weather conditions, darkness, remoteness of the fields, and lack of infrastructure. Gradual warming has, however, improved the accessibility of the Arctic Ocean. We show for the most resource-abundant European Arctic Seas whether and how a climate induced reduction in sea ice might impact future accessibility of offshore natural gas and crude oil resources. Based on this analysis we show for a number of illustrative but representative locations which technology options exist based on a cost-minimization assessment. We find that under current hydrocarbon prices, oil and gas from the European offshore Arctic is not competitive on world markets.

Road network and trajectory representation learning are essential for traffic systems since the learned representation can be directly used in various downstream tasks (e.g., traffic speed inference, travel time estimation). However, most existing methods only contrast within the same scale, i.e., treating road network and trajectory separately, which ignores valuable inter-relations. In this paper, we aim to propose a unified framework that jointly learns the road network and trajectory representations end-to-end. We design domain-specific augmentations for road-road contrast and trajectory-trajectory contrast separately, i.e., road segment with its contextual neighbors and trajectory with its detour replaced and dropped alternatives, respectively. On top of that, we further introduce the road-trajectory cross-scale contrast to bridge the two scales by maximizing the total mutual information. Unlike the existing cross-scale contrastive learning methods on graphs that only contrast a graph and its belonging nodes, the contrast between road segment and trajectory is elaborately tailored via novel positive sampling and adaptive weighting strategies. We conduct prudent experiments based on two real-world datasets with four downstream tasks, demonstrating improved performance and effectiveness.

Energy conversion in the machines and information processors of the capital stock drives the growth of modern economies. This is exemplified for Germany, Japan, and the USA during the second half of the 20th century: econometric analyses reveal that the output elasticity, i.e. the economic weight, of energy is much larger than energyʼs share in total factor cost, while for labor just the opposite is true. This is at variance with mainstream economic theory according to which an economy should operate in the neoclassical equilibrium, where output elasticities equal factor cost shares. The standard derivation of the neoclassical equilibrium from the maximization of profit or of time-integrated utility disregards technological constraints. We show that the inclusion of these constraints in our nonlinear-optimization calculus results in equilibrium conditions, where generalized shadow prices destroy the equality of output elasticities and cost shares. Consequently, at the prices of capital, labor, and energy we have known so far, industrial economies have evolved far from the neoclassical equilibrium. This is illustrated by the example of the German industrial sector evolving on the mountain of factor costs before and during the first and the second oil price explosion. It indicates the influence of the 'virtually binding' technological constraints on entrepreneurial decisions, and the existence of 'soft constraints' as well. Implications for employment and future economic growth are discussed.

This paper summarizes the findings of a study undertaken by the European Academies Science Advisory Council to evaluate the development challenges of concentrating solar power (CSP) and its consequent potential to contribute to low carbon electricity systems in Europe, the Middle East and North Africa (the MENA region) to 2050. The study reviewed the current status and prospective developments of the four main CSP technology families, and identified prospective technical developments, quantifying anticipated efficiency improvements and cost reductions. Similarly, developments in thermal energy storage were evaluated, and the role and value of CSP storage in electricity systems were examined. A key conclusion was that as the share of intermittent renewables in an electricity system increases, so does the value of thermal energy storage in CSP plants. Looking ahead, the study concludes that CSP should be cost competitive with fossil-fired power generation at some point in the 2020’s provided that commercial deployment continues at an increasing rate, and through support mechanisms that incentivise technology development. Incentive schemes should reflect the real value of electricity to the system, and should ensure sufficient transparency of cost data that learning rates can be monitored. Key factors which will determine CSP’s contribution in Europe and the MENA region over the period to 2050 are generating costs, physical constraints on construction of new plants and transmission, and considerations of security of supply. The study makes recommendations to European and MENA region policy makers on how the associated issues should be addressed.

Energy management plays a crucial role in providing necessary system flexibility to deal with the ongoing integration of volatile and intermittent energy sources. Demand Response (DR) programs enhance demand flexibility by communicating energy market price volatility to the end-consumer. In such environments, home energy management systems assist the use of flexible end-appliances, based upon the individual consumer’s personal preferences and beliefs. However, with the latter heterogeneously distributed, not all dynamic pricing schemes are equally adequate for the individual needs of households. We conduct one of the first large scale natural experiments, with multiple dynamic pricing schemes for end consumers, allowing us to analyze different demand behavior in relation with household attributes. We apply a spectral relaxation clustering approach to show distinct groups of households within the two most used dynamic pricing schemes: Time-Of-Use and Real-Time Pricing. The results indicate that a more effective design of smart home energy management systems can lead to a better fit between customer and electricity tariff in order to reduce costs, enhance predictability and stability of load and allow for more optimal use of demand flexibility by such systems.

Abstract In 2007, Germany changed network access regulation in the natural gas sector and introduced a so-called entry-exit system. The spot market effects of the reregulation remain to be examined. We use cointegration analysis and a state space model with time-varying coefficients to study the development of natural gas spot prices in the two major trading hubs in Germany and the interlinked spot market in the Netherlands. To analyse information efficiency in more detail, the state space model is extended to an error correction model. Overall, our results suggest a reasonable degree of price convergence between the corresponding hubs. Market efficiency in terms of information processing has increased considerably among Germany and the Netherlands.

We consider the problem of modeling the dependence among many time series. We build high‐dimensional time‐varying copula models by combining pair‐copula constructions with stochastic autoregressive copula and generalized autoregressive score models to capture dependence that changes over time. We show how the estimation of this highly complex model can be broken down into the estimation of a sequence of bivariate models, which can be achieved by using the method of maximum likelihood. Further, by restricting the conditional dependence parameter on higher cascades of the pair copula construction to be constant, we can greatly reduce the number of parameters to be estimated without losing much flexibility. Applications to five MSCI stock market indices and to a large dataset of daily stock returns of all constituents of the Dax 30 illustrate the usefulness of the proposed model class in‐sample and for density forecasting. Copyright © 2016 John Wiley & Sons, Ltd.