Do Fossil-Fuel Price Distortions Impact the Low-Carbon Transition in China’s Energy Intensive Industries?

Energy intensive industries (EIIs) in China are predominantly reliant on fossil fuels. Consequently, such high fossil fuel dependency has amplified carbon emission levels and blocked the low-carbon transition. It is inappropriate to discuss the solution of the dependency before investigating fossil-fuel price distortion and its impact on the industrial energy consumption. Therefore, this paper built a dynamic trans-log cost function model based on provincial panel data of China’s Ells between 2004 and 2016, to investigate inter-fuel substitution effects caused by own price elasticities and cross price elasticities, and analyzed the impact of fossil-fuel price distortions on low-carbon transition. The level of price distortions in coal, gasoline and diesel was evaluated, based on which the CO2 mitigation potentials in China’s EIIs were estimated. Results show that: 1) in each EII sector, the own price elasticities of all fuels were negative while the cross price elasticities among coal, oil and electricity were positive, suggesting substitution effect exists; 2) the average level of price distortions in coal, gasoline and diesel is 7.48, 11.1 and 32.19%, respectively, which means the prices of coal tend to be more market- oriented than the other two fuels; 3) removing coal price distortions can potentially reduce CO2 emissions in China’s EIIs by 905.78 million tons, while the effects of removing oil price distortions were uncertain, unless the substitution of coal for oil was restrained. Therefore, there is still much room for improvement in China’s fossil-fuel market reform. Possible policies are required to improve the production in EIIs and the low-carbon transition by adopting cleaner energy resources to substitute fossil-fuels.

Self-organizing Maps and Bayesian Regularized Neural Network for Analyzing Gasoline and Diesel Price Drifts

Any nation’s growth depends on the trend of the price of fuel. The fuel price drifts have both direct and indirect impacts on a nation’s economy. Nation’s growth will be hampered due to the higher level of inflation prevailing in the oil industry. This paper proposed a method of analyzing Gasoline and Diesel Price Drifts based on Self-organizing Maps and Bayesian regularized neural networks. The US gasoline and diesel price timeline dataset is used to validate the proposed approach. In the dataset, all grades, regular, medium, and premium with conventional, reformulated, all formulation of gasoline combinations, and diesel pricing per gallon weekly from 1995 to January 2021, are considered. For the data visualization purpose, we have used self-organizing maps and analyzed them with a neural network algorithm. The nonlinear autoregressive neural network is adopted because of the time series dataset. Three training algorithms are adopted to train the neural networks: Levenberg-Marquard, scaled conjugate gradient, and Bayesian regularization. The results are hopeful and reveal the robustness of the proposed model. In the proposed approach, we have found Levenberg-Marquard error falls from − 0.1074 to 0.1424, scaled conjugate gradient error falls from − 0.1476 to 0.1618, and similarly, Bayesian regularization error falls in − 0.09854 to 0.09871, which showed that out of the three approaches considered, the Bayesian regularization gives better results.

Bubble Identification in the Emerging Economy Fuel Price Series: Evidence from a Generalized Sup Augmented Dickey–Fuller Test

In the recent past, the world in general and Pakistan in particular faced a drastic fuel price change, affecting the economic productivity of the country. This has drawn the attention of empirical researchers to analyze the abrupt change in fuel prices. This study takes a lead and investigates for the first time, in the literature related to Pakistan, the presence of multiple fuel price bubbles, with the purpose of knowing if the price driver is due to demand or it is exuberant consumer behavior that prevails and contributes to a sudden boom in fuel price series. The empirical analysis is performed through a recently proposed state-of-the-art generalized sup ADF (GSADF) approach on six commonly used fuel price series, namely, LDO (light diesel oil), HSD (high-speed diesel), petrol, natural gas, kerosene, and MS (motor spirit). The bubble analysis for each of the six fuel price series is based on monthly data from July 2005 to August 2020. The findings provide evidence of the existence of multiple bubbles in all series considered. Specifically, four bubbles are detected in each of the kerosene and natural gas price series, whereas three bubbles are noted in each of the HSD, LDO, petrol and MS price series. The maximum duration of occurrence of bubbles is of 12 months for kerosene. The date-stamping of the bubbles shows that the financial crisis of 2008 contributed to the emergence of bubbles that pushed oil prices upward and caused a depreciation in the national currency.

PERSPECTIVES FOR A WIND ASSISTED SHIP PROPULSION

For three different wind propulsion technologies, the energy saving potential of sea going cargo vessels are discussed: a kite, a Flettner rotor and a Dynarig-sail. The energy saving potential can be increased significantly if the route can be optimized when using a wind assisted ship propulsion. The increase of travelling time due to a route adoption is within the frame of the commonly accepted uncertainty in supply chains and can be limited or adjusted in the route optimization software as a parameter. The calculated saving potential depends on several parameters: the considered wind propulsion system, the route, the kind of ship (bulker, multipurpose carrier, tanker), as well as the ship speed and the weather. The cost-effectiveness of the installation of a wind propulsion system strongly depends on the fuel price, the ship speed and the international policy concerning the ship emissions.

Economic Evaluation of an Ammonia-Fueled Ammonia Carrier Depending on Methods of Ammonia Fuel Storage

This study proposed two concepts for ammonia fuel storage for an ammonia-fueled ammonia carrier and evaluated these concepts in terms of economics. The first concept was to use ammonia in the cargo tank as fuel and the second concept was to install an additional independent fuel tank in the vessel. When more fuel tanks were installed, there was no cargo loss. However, there were extra costs for fuel tanks. The target ship was an 84,000 m3 ammonia carrier (very large gas carrier, VLGC). It traveled from Kuwait to South Korea. The capacity of fuel tanks was 4170 m3, which is the required amount for the round trip. This study conducted an economic evaluation to compare the two proposed concepts. Profits were estimated based on sales and life cycle cost (LCC). Results showed that sales were USD 1223 million for the first concept and USD 1287 million for the second concept. Profits for the first and second concepts were USD 684.3 million and USD 739.5 million, respectively. The second concept showed a USD 53.1 million higher profit than the first concept. This means that the second concept, which installed additional independent fuel tanks was better than the first concept in terms of economics. Sensitivity analysis was performed to investigate the influence of given parameters on the results. When the ammonia fuel price was changed by ±25%, there was a 15% change in the profits and if the ammonia (transport) fee was changed by ±25%, there was a 45% change in the profits. The ammonia fuel price and ammonia (cargo) transport fee had a substantial influence on the business of ammonia carriers.

The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country

This article aims to analyze how fuel prices impact spatial price transmission between two Chilean horticultural wholesale markets. We implement a regime-dependent VECM where price transmission parameters depend on dynamics imposed by a stationary exogenous variable (fuel price). We identified two price transmission regimes characterized by different equilibrium relationships and short-run adjustment processes. This implies that fuel prices affect price transmission elasticities and intermarket adjustment speeds. Our results show increasing marketing costs as farm to market distance grows. This impact depends on each product’s attributes. Highlights This article analyzes the effect of fuel prices on the price transmission mechanism between the most relevant Chilean horticultural wholesale markets. A regime-dependent Vector Error Correction Model where price transmission parameters depend on fuel price was implemented. Clear evidence of the role played by fuel prices for in horizontal price transmission between the wholesale markets considered in this study was found. This situation supports the idea that regardless of quantities traded in regional markets, the major effect of price adjustment is a result of the high demand, distances and market concentration of a central market. This impact depends on each product’s attributes.

Design and Analysis of Solar Water Pumping for Salt Production in Indonesia

Salt production farmers in Patutrejo Village, Purworejo Regency, spend nearly Rp. 10 million per year for diesel water pump operational costs. The cost of fuel is the heaviest financial burden for the farmers. Not only is it expensive, but fuel scarcity is also a serious issue causing the salt production capacity target cannot be assured, and the increasing demand for salt cannot be met. This study proposes using a solar water pump system (SWPS) as an alternative solution for the farmers to ensure and increase salt production. For a group of farmers in Patutrejo who require pumping around 35 m3 of seawater each day, a photovoltaic (PV) panel of 900 Wp and a DC pump of 700 Watt can perform the task sufficiently. The total capital cost of the SWPS is Rp. 90 million, with a simple payback period (SPP) of 9.5 years. The SPP would be shorter if future fuel price increases were taken into account. With a lifetime of up to 25 years, SWPS promises a long-term, practical, reliable, and sustainable solution for salt farmers in Patutrejo.