Measuring resilience to energy shocks

Molyneaux, Lynette and Brown, Colin and Foster, John and Wagner, Liam (2015): Measuring resilience to energy shocks.

Abstract

Measuring energy security or resilience in energy is, in the main, confined to indicators which are used for comparative purposes or to show trends rather than provide empirical evidence of resilience to unpredicted crises. In this paper, the electricity systems of the individual states within the United States of America are analysed for their response to the 1973-1982 and the 2003-2012 oil price shocks. Empirical evidence is sought for elements which are present in systems that experience reduced volatility from the energy shocks in the form of lower prices. Spare capacity is found to be a reliable indicator of reduced prices through both periods whilst renewable energy is found to be an indicator of reduced prices especially in 1973-1982.

• Item Type: MPRA Paper
• Language: English
• Keywords: Resilience metrics; Energy Security; Electricity; Renewable Energy
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q40 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy

References

[1] ALBERT, R., HAWOONG, J. & BARABASI, A.-L. 2000. Error and attack tolerance of complex networks. Nature, 406, 378-382.

[2] AWERBUCH, S. & BERGER, M. 2003. Applying Portfolio Theory to EU Electricity Planning and Policy Making. IEA/EET Working Paper. Paris: IEA.

[3] AWERBUCH, S., BRAZILIAN, M. & ROQUES, F. 2008. Analytical Methods for Energy Diversity and Security : Portfolio Optimization in the Energy Sector : A Tribute to the Work of Dr. Shimon Awerbuch, Jordan Hill, GBR, Elsevier Science & Technology.

[4] BELSLEY, D. A., KUH, E. & WELSCH, R. E. 2005. Detecting and Assessing Collinearity. Regression Diagnostics. John Wiley & Sons, Inc. BOLINGER, M. & WISER, R. 2008. The value of renewable energy as a hedge against fuel price risk. In: AWERBUCH, S., BRAZILIAN, M. & ROQUES, F. (eds.) Analytical Methods for Energy Diversity and Security : Portfolio Optimization in the Energy Sector : A Tribute to the Work of Dr. Shimon Awerbuch. Jordan Hill, GBR: Elsevier Science & Technology.

[5] CARPENTER, S., WALKER, B., ANDERIES, J. M. & ABEL, N. 2001. From Metaphor to Measurement: Resilience of What to What? Ecosystems, 4, 765-781.

[6] CHATTERJEE, S. & HADI, A. S. 2006. Analysis of Collinear Data. Regression Analysis by Example. John Wiley & Sons, Inc.

[7] DOBBINS, R., WITT, S. F. & FIELDING, J. 1994. Portfolio theory and investment management, Oxford, Blackwell Business.

[8] EPA. 2015. Carbon Pollution Standards Fact Sheet: Clean Power Plan & Carbon Pollution Standards Key Dates [Online]. US EPA. Available: http://www2.epa.gov/carbon-pollution-standards/fact-sheet-clean-power-plan-carbon-pollution-standards-key-dates [Accessed 14 May 2015 2015].

[9] FAMA, E. F. & FRENCH, K. R. 2004. The Capital Asset Pricing Model: Theory and Evidence. The Journal of Economic Perspectives, 18, 25-46.

[10] FISCOR, S. 2012. Celebrating 100 years with Coal Age. Coal Age. Denver, CO: Mining Media.

[11] HOLLING, C. S. 1973. Resilience and Stability of Ecological Systems. Annual Review of Ecology and Systematics, 4, 1-23. HWANG, T., GAO, S. & OWEN, H. 2012. A two-pass model study of the CAPM: evidence from the UK stock market. Studies in Economics and Finance, 29, 89-104. [12] KRUYT, B., VAN VUUREN, D. P., DE VRIES, H. J. M. & GROENENBERG, H. 2009. Indicators for energy security. Energy Policy, 37, 2166-2181.

[13] MARKOWITZ, H. 1952. Portfolio Selection. The Journal of Finance, 7, 77-91.

[14] MOLYNEAUX, L., WAGNER, L., FROOME, C. & FOSTER, J. 2012. Resilience and electricity systems: A comparative analysis. Energy Policy, 47, 188-201.

[15] NATURALGAS.ORG. 2015. The History of Regulation [Online]. Natural Gas Supply Association,. Available: http://naturalgas.org/regulation/history/ [Accessed 1 April 2015.

[16] PAGE, S. E. 2011. Diversity and Complexity, Princeton, Princeton University Press.

[17] SHARPE, W. F. 1964. Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. The Journal of Finance, 19, 425-442.

[18] TAYLOR, Y. 22 January 2014 2014. RE: Historic Data. Type to MOLYNEAUX, L.

[19] UNGAR, M. 2012. The social ecology of resilience: a handbook of theory and practice, New York, Springer New York.

[20] US GOVERNMENT. 1974. Energy Supply and Environmental Coordination Act [Online]. Washington: Congress.gov. Available: https://www.congress.gov/bill/93rd-congress/house-bill/14368 [Accessed 18 May 2015].

[21] US GOVERNMENT. 1978. Powerplant and industrial fuel use act [Online]. Washington, D.C.: Congress.gov. Available: https://www.congress.gov/bill/95th-congress/house-bill/5146 [Accessed 18 May 2015.

[22] WATTS, D. J. & STROGATZ, S. H. 1998. Collective dynamics of `small-world' networks. Nature, 393, 440-442.

[23] WESTERSTROM, L. 1973. Minerals Yearbook: Coal. In: BUREAU OF MINES (ed.). US Bureau of Mines.

[24] WESTERSTROM, L. 1974. Minerals Yearbook: Coal. In: BUREAU OF MINES (ed.). US Bureau of Mines.

[25] WOODMANSEE, W. C. 1972. Minerals Yearbook: California. US Bureau of Mines.

[26] YERGIN, D. 1991. The prize: the epic quest for oil, money, and power, New York, Simon and Schuster.