Speaker: David Rapson, Associate Professor of Economics, University of California, Davis

Discussant: Xavier Labandeira, Director, FSR Climate 

This seminar will illustrate the paper ”The Household Vehicle Portfolio: Implications for Emissions Abatement Policies” (David Rapson with Ken Gillingham and Chris Knittel)

This paper quantifies the extent to which multi-car households exhibit preferences for a diversified vehicle portfolio. We deploy a novel identification strategy to examine how an exogenous change in the fuel economy of a kept vehicle affects a household’s choice of a second vehicle purchased. This has potential implications for the relative long-run effectiveness of greenhouse gas abatement initiatives such as fuel economy standards and a price on carbon. Results indicate a strong preference for a diverse portfolio in fuel-economy. They highlight the importance of our instrumental variables approach and the pitfalls that arise when using between-household, rather than within-household, variation. Results imply that the potential gasoline savings from exogenously increasing fuel economy of the kept vehicle are eroded significantly by the average household’s subsequent desire for a less efficient second car.

David Rapson is an Associate Professor of Economics at the University of California at Davis, currently visiting Carlos III University in Madrid. Rapson’s research focuses on energy economics, environmental policy, and industrial organization. Many of his research projects involve collaboration with electric utility companies and government regulatory agencies, with a focus on informing policy decisions in the transportation and electricity sectors. His research includes the evaluation of dynamic electricity pricing regimes, carbon offset programs, and the design and analysis of large-scale randomized field experiments to test the role of information and prices on consumer electricity demand. An area of ongoing research interest explores carbon abatement in the transportation sector. Rapson’s research appears in the American Economic Review, Nature, and other academic journals. He holds an AB in economics from Dartmouth College; an MA in economics from Queen’s University; and a Ph.D. in economics from Boston University. Professor Rapson is currently an Associate Editor of the Journal of Economic Behavior and Organization, and sits on the Editorial Council of the Journal of the Association of Environmental and Resource Economists.

Technological change in Air Traffic Management (ATM) usually develops at a slow pace, understandably so given the high safety requirements, the enormous coordination effort needed to harmonize standards around the world and the relatively small size of the global ATM technology market (e.g. compared to consumer electronics). Real technological “disruptions” are therefore so far associated with other sectors in which market forces play a stronger role. Yet new potentially disruptive technologies are emerging in ATM together with the need  to boost productivity and innovation speed.

The 8^th Florence Air Forum will discuss the challenge of disruptive technologies in the ATM sector with high level representatives from European Commission, SESAR JU, Eurocontrol and several other bodies and agencies, stakeholders and academics.

In Europe the SESAR project is in a central position to steer innovation in ATM with significant funding and a long term strategy. Guiding the research under SESAR is the European ATM Master Plan which has the crucial role to identify the most relevant technologies to support over the next decades. The latest edition, which contains a “SESAR Vision” towards higher levels of digitalisation, virtualisation and automation, identifies a number of potentially disruptive solutions such as virtual centers, the next generation data communication capabilities, common support services or flight centric operations. This provides a potential foundation for breakthrough innovation in new products, services, and business models in ATM.

Both the development and the deployment of SESAR technologies heavily depend on the regulatory environment. Regulation firstly needs to allow new technologies to be developed and then needs to adapt to allow for their timely diffusion. Such change processes pose several fundamental challenges especially with regards to safety and economic regulatory issues. Yet potential ATM business model evolutions could be inspired by multiple industry analogies that share many similarities with ATM (e.g. transformation that took place in the energy, banking and postal sectors).

Discussions will be structured around four discussion questions:

• What are disruptive technologies and how does the concept apply to ATM?
• What can ATM learn from other sectors to address the challenges connected to the rising need for innovation speed?
• How can innovation be supported effectively and which are the most promising solutions that SESAR should be focussing on?
• The role of regulation: Do we need to rethink the regulatory approach to ATM in light of new technologies?

For further information or early registration, please contact FSR.Transport@eui.eu

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Final programme

Summary of the presentations

European Transport Regulation Observer

RELATED PRESENTATIONS

Introduction to the 8th Florence Air Forum – MATTHIAS FINGER, Part-time Professor & Director of the Transport Area, Florence School of Regulation/EUI; and Professor, Ecole Polytechnique Fédérale de Lausanne

Disruptive Technologies in Air Traffic Management – FRANK BRENNER, Director General, Eurocontrol

Disruptive Technologies in Air Traffic Management – MAURIZIO CASTELLETTI, Head of Unit Single European Sky, European Commission, DG MOVE

What can ATM learn from other sectors to address the challenges connected to the rising need for innovation speed? – FLORIAN GUILLERMET, Executive Director, SESAR Joint Undertaking

The Virtual Centre Initiative – KLAUS MEIER, CIO, Skyguide and DANI WEDER, CEO, Skyguide

Disruptive Technologies in ATM Flight – centric operations (sectorless operations) – RALF BERTSCH, Director Planning & Innovation, DFS

What can ATM learn from other sectors to address the challenges connected to the rising need for innovation speed? – SVEND LEIRVAAG, Vice President Industry Affairs, Amadeus IT group

Mobile Communication Challenges in ATM – ANDREAS LASSAK, UAS Program Manager, Deutsche Telekom

What can ATM learn from other sectors to address the challenges connected to the rising need for innovation speed? – THORSTEN ROBRECHT, Vice President Advanced Mobile Networks Solutions, Nokia

How can innovation be supported effectively and which are the most promising solutions that SESAR should be focussing on? – LUC LALLOUETTE, PMO SESAR Director, Thales Air Systems

Disruptive technologies in Air Traffic Management – KORNEL SZEPESSY, CEO, Hungarocontrol

Disruptive Technologies in ATC: The role of the ‘regulatory technology’ – CATHAL GUIOMARD, University Lecturer, Dublin City University Business School

Recent terrorist attacks directly targeted the European transport system (Thalys – 21 August 2015, Brussels metro and airport – 22 March 2016). Public opinion is now particularly concerned, and companies, as well as institutions, have started to act to improve the security of the transport system. Major initiatives have been adopted by the European Commission (see, among others the new European Agenda on Security 2015-2020 to support better cooperation between Member States in the fight against terrorism, organised crime and cybercrime), yet the actions that have been taken by the different Member States in the area of security in the immediate aftermath of the terrorist attacks are not always consistent.

Continue reading “13th Florence Rail Forum: Rail passenger security – a challenge for the Single European Railway Area?”

The Florence School of Regulation is joining ENTSO-E and the Baltic TSOs Litgrid (Lithuania), Elering (Estonia) and Augstsprieguma tÏkls (Latvia), in the organization of the Baltic Power Conference 2016.

Although successful local infrastructure projects, such as LitPol Link and NordBalt, have turned Baltic and Nordic countries into a hub of power interconnectors and an integral part of the European electricity market, the Baltics remain electrically part of the Russian system.

The first of the three ENTSO-E regional conferences will take place in Vilnius on 1 June 2016 and will bring together high-level representatives from the policy, industry, academia, and NGO sectors to discuss future electricity strategies for the Baltic Sea region. The Conference will inquiry about possible solutions to enable the Baltics to become a bridge between East and Western Europe and the options for further electrical integration of these countries into the ENTSO-E area.

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Register here

For more information please contact: euevents@entsoe.eu

Online debate

After the success of our recent Conference on the ‘External Dimension of the Energy Union’, the Florence School of Regulation is re-opening the discussion with an Online Debate on: ‘The Energy Union looking beyond EU borders: which focus, which way forward, which strategies’.

Andris Piebalgs (former EU Energy Commissioner), Walter Boltz (former Vice-Chair of the ACER Board) and Stephan Kamphues (President of ENTSO-G) will discuss and answering questions from online participants on:

• The EU External Energy Policy
• The Global Challenges for Security of Supply
• The Status of the EU Energy Internal Market

The online debate will take place on Tuesday 17^th May, from 11.00 to 12.00 hrs CET and will be moderated by Ilaria Conti, FSR Energy Policy Coordinator.

Policy Context

In the ‘Energy Union’ package of February 2015, the Juncker Commission stated that “ensuring security of supply” would be the first of its five objectives. The European Council welcomed this package and requested the EU High Representative Federica Mogherini to “prepare an EU global strategy on foreign and security policy” for June 2016. The role of security has also been re-confirmed by the Commission with the release of the “Energy Security Package” on 16^th February.

Beyond the EU, the revolution in oil and gas (prompted by US shale production and deepened by an enduring price crash) has created a new and particular landscape where our Energy Union has to position itself and grow. Simultaneously, the success of Paris COP 21 has also opened a new energy era at a global level. Therefore, the “External Dimension of the Energy Union” has now become a crucial issue at the core of European policy.

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The Florence School of Regulation is hosting its Policy Advisory Council on Monday 23^rd and Tuesday 24^th May.

The Policy Advisory Council gather renowned academics, experts from leading energy companies as well as representatives from the European Commission, the Agency for the Cooperation of Energy Regulators (ACER) and National Regulatory Authorities to discuss and test the relevance and robustness of FSR research.

The event will be divided in three sessions, developed around the following topics:

• Hydropower regimes and access rights in Europe,
• Next Steps in the Coordination between TSOs and DSOs,
• Gas Security of Supply: a first appraisal of the 2016 Package.

Please note that this is a closed event and participation is by invitation only.

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Speakers

Santiago Blanco,  Director and Energy Area Manager for Spain and Portugal, DNV GL
Richard Schmalensee, Howard W. Johnson Professor of Management and Economics Emeritus, MIT
Laszlo Varro, Chief Economist, International Energy Agency

Moderated by: Xavier Labandeira, Director, FSR Climate

Distributed Energy Resources (DER) are increasingly seen within the power sector as a key element to tackling climate change.  DER generation technologies are one of the main vectors for the development of renewables in electricity – particularly photovoltaics (PV) – and batteries would be a suitable solution for their integration. The rapid development of distributed generation, together with the cost reduction of these technologies and the development of new business models, have led to a significant debate on DER and their general implications in the past few years. While most experts recognise the important role of DER in the future of the electricity sector, opinions differ as to whether DER should have a predominant role or only be complementary to the centralised generation and restricted to some market niches (e.g., some specific types of customers or services or isolated areas). These various opinions are usually supported by the comparison of the DER costs and benefits with respect to a centralised supply.

This one-hour live debate brought together three high-level experts to discuss the current situation and the future of DER, with a special focus on PV and batteries. 

Watch the full recording of the debate:

Watch the introductory presentations by the speakers and moderator made available prior to the debate

Xavier Labandeira, moderator: Introduction to the debate

Santiago Blanco: Distributed energy resources in systems with electric grids

Richard Schmalensee: Distributed Energy Resources in Systems with Electric Grids

Laszlo Varro: The Electricity Network in a Low Carbon Energy System

Speaker bios

Santiago Blanco

Santiago Blanco is Director and Energy Area Manager for Spain and Portugal in DNV GL (formerly KEMA and GARRAD HASSAN). He has extensive experience in the Energy Business, having held executive positions in different consulting companies for more than 25 years and having worked with a great variety of renewable companies, TSOs and DSOs. He has a deep insight into the future of the T&D Business with a focus on the impact of the liberalisation of the Market, Renewable Integration and Energy Efficiency. He contributed to a number of relevant studies such as “The Development of Smart Grid in Spain”, FUTURED (member of the Steering Committee of FUTURED, Spanish National Smart Grid Technological Platform)”, “Regulatory analysis for the development of Smart Grids” for the Spanish Regulatory Agency CNE, (member of the Smart Grid Advisory Grouo, 2012),“IEC Smart Grid Standardization Roadmap v2”, (member of the IEC Strategic Group on Smart Grid) and “Cost Comparison Study of Centralised vs Distributed Renewable Generation”.

Richard Schmalensee

Richard Schmalensee is Howard W. Johnson Professor of Economics and Management, Emeritus at MIT.  He has served as Director of the MIT Center for Energy and Environmental Policy Research and, from 1998 through 2007, as Dean of the MIT Sloan School of Management.  He was the Member of the President’s Council of Economic Advisers with responsibility for energy and environmental policy from 1989 through 1991.  Professor Schmalensee has published 11 books and more than 120 articles; his recent work focuses on applications of industrial organisation economics to energy and environmental policy. He is a Fellow of the Econometric Society and the American Academy of Arts and Sciences, a Director of the National Bureau of Economic Research, and Chairman of the Board of Resources for the Future.

Laszlo Varro

Laszlo Varro is the Chief Economist of the International Energy Agency. He leads the Economics and Investment Office, which is responsible for providing energy economics insights for the policy and energy security analysis of the IEA. He oversees the comprehensive coverage of investment in the energy sector and leads the Energy Business Council, the IEA’s main engagement platform with the private sector. Until 2016 Laszlo held the position of Head of Gas, Coal and Power Markets at the IEA. Until 2011 Laszlo was the Director for Strategy Development at MOL Group, a publicly-quoted oil and gas independent. He holds graduate degrees from the University of Cambridge and Corvinus University of Budapest.

One of the most critical challenges facing the international community today is the lack of reliable access to energy. Nearly 1.2 billion people, or 17 percent of the global population, live without access to electricity (IEA, 2015). Worldwide, 2.7 billion people, or 38 percent of the global population, rely on biofuels such as wood, coal, charcoal, or animal waste for cooking and heating (IEA, 2015). Women in developing countries are disproportionately affected by energy poverty because the dearth of energy sources reinforces roles largely based on social norms that place a low value on domestic labour (Danielsen, 2012; UNIDO, 2013). But how does access to energy empower women and what kind of benefits can we expect from making the right investments? Read the complete article

The Equality Switch | The Enabling Power of Access to Energy for Women around the World

Watch the recording of the online debate!

Within the framework of the recently adopted UN Sustainable Development Goals, the G20 Energy Access Action Plan and COP21 on Climate Change, the Florence School of Regulation (FSR) and World Access to Modern Energy (WAME) have agreed to form a partnership to contribute to the process of ensuring affordable, reliable, and modern energy for all. This initiative is looking specifically at the role which regulatory authorities can and should play in making universal access to energy a reality.

The Annual Conference of the European University Institute is this year focusing on the role of Women in Europe and in the World. Linked to this event, the FSR has decided to host a special edition of the FSR online debates, which will look at the enabling power of access to energy for women around the world. 

Organised jointly by the European Railway Agency (ERA) and the European University Insitute (EUI), this conference explores the regulatory context of the digitalisation of railways, which bears a lot of promise to make railways more customer-friendly, comfortable, affordable, and competitive.

By removing regulatory barriers, better access to operational data and rules shall be granted, thus creating new business opportunities.

A selected group of participants, including railway operators, infrastructure managers, lessors, manufacturers, IT specialists, National Safety Authorities, academia and passengers’ associations will debate on business needs, regulatory issues, societal trends and financial aspects linked to railway digitalisation.

Continue reading “Executive Seminar – ERA and the Digitalisation of Railways. Creating a lean and efficient regulatory framework  for customer-friendly digital railways”

The role of Distribution System Operators in the energy value chain used to be clear. Energy was produced centrally, transported over large distances via the transmission network, and then distributed via the distribution network to end-consumers. DSOs were in charge of the distribution networks. Today there are however many new activities in the energy value chain, and it is not always clear to whom these activities belong. These grey areas are an interesting and exciting domain for regulatory practice and research.

Read more on FSR topic of the month

Watch the Recording of the Webinar!

The emerging regulatory practice for new businesses related to distribution grids 

New FSR policy brief

by: HADUSH Samson, MEEUS Leonardo

Activities related to new businesses, such as market facilitation (e.g. data hub operation), electrical storage, and electric vehicle- charging infrastructure are grey areas in regulation; In these grey areas, there is potential for a market approach, but there are also conditions which can prompt the involvement of DSOs; By taking stock of the emerging regulatory practice, we have identified the main elements that regulators need to consider when moving into these grey areas; If the approach is market based, the regulator needs to design the market; and check whether there is a need to correct market failures. To involve the DSOs is one way, but not the only way, to correct the market failures for new businesses; If the approach is to engage with the DSOs, the role of the regulator is to define the scope of the DSO involvement; to consider dedicated quality of service regulations for each of the new businesses that the DSO is involved in; and to make sure that the DSOs have sufficient incentives to innovate when investing in new businesses; The role of the DSOs in the energy value chain is diverging in Europe, which might be an issue for the ongoing market integration.

Access the policy brief here

The FSR is pleased to host and co-organise a high-level initiative conceived in cooperation with the Chair Governance & Regulation of the University Paris-Dauphine.

This event is designed to bring high-level academics together, to analyse and debate on the dynamic of global, international, economic governance and regulation of markets. This “organized discussion” between scholars of various horizons acknowledges the open, contested character of the broad questions raised by the dynamics of international and global institutions.

A Handbook by Oxford University Press

The ultimate aim of the workshops will consist in the composition of a “Handbook on International Economic Governance and Market Regulation”, which will be published by Oxford University Press and will cover all the important political debates and analytical stakes raised by the transnationalization of regulatory capacities of specific sectors – such as communication and media, energy, transportation, finance and insurance, as well as transversal regulatory issues (environment, public health, labour, etc.).

The workshop and the eventual volume will be developed around four main topics:

1. The Production and Emergence of Systems of Norms
2. The Challenge of Compliance
3. Accountability, Sovereignty and Reforms of the Current Global Economic Governance Framework
4. Toward Systemic Transformation

The overall approach will be cross-disciplinary and will focus, under different standpoints and domains, on the spread of the transnational private and public regulatory regimes which we have witnessed over the last thirty years.

Rather than embracing a macroeconomic or macro-institutional approach to analyse how the global economy works, the workshops will promote a micro, bottom-up perspective that would start from the analysis of individual agents, whether market participants or regulators, and analyse how they adopt rules, bend them and act upon them.

Please note that this is a closed event and participation is by invitation only.

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The Athens conference on European Energy Law is the first joint initiative between the Hellenic Energy Regulation Institute and the Energy Law & Policy Area of the Florence School of Regulation.  

The conference will be opened with a keynote speech on the future of the EU Energy Market and the major challenges ahead. This will be followed by four sessions in which academics, institutional representatives, and key market players will consider the pressing questions which have arisen from recent developments in the energy sector. 

Watch the recording of the live stream

I. The future of coal and lignite in the EU after the Paris Agreement

This session will address the implications of the commitments made under the Paris Agreement to phase out CO2 emissions, which will include divesting from projects involved in fossil fuel-related activities, adopting binding carbon budgets for all fossil-fired power plants, and banning new opencast lignite mines. As the EU will have to further intensify its efforts towards decarbonisation, how can it mitigate the impact of decarbonisation on energy security and supply?

II. The Liberalisation of the Gas and Electricity Markets

The liberalisation of the European gas and electricity markets is a long-standing process which continues to face obstacles and trade barriers. Initiated in 1996 and developed through three energy packages with continuously renewed targets reaching to 2050 and beyond, the process of liberalisation aims to ensure a functioning market and fair market access, a high level of consumer protection as well as adequate levels of interconnection and generation capacity within an internal energy market. The accomplishment of a harmonised approach towards a secure, sustainable and competitive energy for Europe requires high level target setting, such as the Target Model, the rules of which, defined by Framework Guidelines and Network Codes, allow for a coordinated approach and thus efficient results. What have been the achievements so far and how have they been realised? What challenges lie ahead?  

III. Energy Security and transnational pipelines: can we export EU law to third countries?

Following the lively debate over the Nord Stream 2 pipeline and the question of the applicability of EU energy law to the importation of gas from third countries, this session will examine several crucial issues which have emerged from the case. For example, what do the divergent opinions of the Directorate General and the Commission’s legal service reveal about the complexities of transnational pipelines? How should energy security be considered in this context? What are the implications of the Commission’s new Energy Security Package?

IV. Renewable Energy: what could, and should, happen after 2020?

This session will consider the new renewable energy directive and updated EU bio-energy sustainability policy, which the European Commission plans to introduce for the period 2020- 2030, following the Energy Union Framework Strategy. This includes ambitious plans for a common renewable energy target, which will require multiple measures. How should this new framework be devised? How is the Paris Agreement expected to influence the development and implementation of the new renewable energy directive? 

V. The future role of the DSO and its regulation

In 2014, the Council of European Energy Regulators (CEER) launched a consultation on the future role of Distribution System Operators (DSOs). In its Conclusions Paper of 13 July 2015, the CEER stated that there cannot be a single model for the role of the DSOs, given their various and often country-specific features across Europe. In light of this, the CEER provided guiding principles to which the DSOs should comply. But, with these instructions come several questions. What does the DSOs’ role as neutral market facilitators entail? What regulatory provisions need to be made with regard to data management? And, what should be the relationship between the DSOs and the TSOs?

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Register here

The Athens conference is kindly supported by: