This study analyzes a compensation reform proposal designed to prevent inaccurate ratings produced by credit rating agencies(CRAs).Specifically,the CRA’s incentive to exert effort to observe the portfolio’s signal a...This study analyzes a compensation reform proposal designed to prevent inaccurate ratings produced by credit rating agencies(CRAs).Specifically,the CRA’s incentive to exert effort to observe the portfolio’s signal and adopt the rating disclosure policy is investigated under the rating-contingent and incentive-based contract.The issuer has a risky portfolio and solicits a rating from the CRA,which endogenously observes a signal and decides on a rating disclosure policy during the rating production process.The findings reveal that the CRA exerts no effort to observe a signal and inflate the rating under the rating contingent contract.Under the incentive-based contract,the CRA always exerts an optimal effort to observe a signal and adopt the full disclosure regime.Hence,the incentive-based contract better incentivizes the CRA to exert more effort to improve rating accuracy and implement the full disclosure policy than the rating contingent contract.展开更多
This paper reviews the state of the art of research and industry practice on demand response and the new methodology of transactive energy. Demand response programs incentivize consumers to align their demand with pow...This paper reviews the state of the art of research and industry practice on demand response and the new methodology of transactive energy. Demand response programs incentivize consumers to align their demand with power supply conditions, enhancing power system reliability and economic operation. The design of demand response programs, performance of pilot projects and programs, consumer behaviors, and barriers are discussed.Transactive energy is a variant and a generalized form of demand response in that it manages both the supply and demand sides. It is intended for a changing environment with an increasing number of distributed resources and intelligent devices. It utilizes the flexibility of various generation/load resources to maintain a dynamic balance of supply and demand. These distributed resources are controlled by their owners. However, the design of transaction mechanisms should align the individual behaviors with the interests of the entire system. Transactive energy features real-time, autonomous, and decentralized decision making.The transition from demand response to transactive energy is also discussed.展开更多
Demand Response(DR)provides both operational and financial benefits to a variety of stakeholders in the power system.For example,in the deregulated market operated by the Electric Reliability Council of Texas(ERCOT),l...Demand Response(DR)provides both operational and financial benefits to a variety of stakeholders in the power system.For example,in the deregulated market operated by the Electric Reliability Council of Texas(ERCOT),load serving entities(LSEs)usually purchase electricity from the wholesale market(either in day-ahead or real-time market)and sign fixed retail price contracts with their end-consumers.Therefore,incentivizing end-consumers’load shift from peak to off-peak hours could benefit the LSE in terms of reducing its purchase of electricity under high prices from the real-time market.As the first-of-its-kind implementation of Coupon Incentive-based Demand Response(CIDR),the EnergyCoupon project provides end-consumers with dynamic time-of-use DR event announcements,individualized load reduction targets with EnergyCoupons as the incentive for meeting these targets,as well as periodic lotteries using these coupons as lottery tickets for winning dollar-value gifts.A number of methodologies are developed for this special type of DR program including price/baseline prediction,individualized target setting and a lottery mechanism.This paper summarizes the methodologies,design,critical findings,as well as the potential generalization of such an experiment.Comparison of the EnergyCoupon with a conventional Time-of-Use(TOU)price-based DR program is also conducted.Experimental results in the year 2017 show that by combining dynamic coupon offers with periodic lotteries,the effective cost for demand response providers in EnergyCoupon can be substantially reduced,while achieving a similar level of demand reduction as conventional DR programs.展开更多
Driven by modern advanced information and communication technologies,distributed energy resources have great potential for energy supply within the framework of the virtual power plant(VPP).Meanwhile,demand response(D...Driven by modern advanced information and communication technologies,distributed energy resources have great potential for energy supply within the framework of the virtual power plant(VPP).Meanwhile,demand response(DR)is becoming increasingly important for enhancing the VPP operation and mitigating the risks associated with the fluctuation of renewable energy resources(RESs).In this paper,we propose an incentivebased DR program for the VPP to minimize the deviation penalty from participating in the power market.The Markov decision process(MDP)with unknown transition probability is constructed from the VPP’s prospective to formulate an incentivebased DR program,in which the randomness of consumer behavior and RES generation are taken into consideration.Furthermore,a value function of prospect theory(PT)is developed to characterize consumer’s risk attitude and describe the psychological factors.A model-free deep reinforcement learning(DRL)-based approach is proposed to deal with the randomness existing in the model and adaptively determine the optimal DR pricing strategy for the VPP,without requiring any system model information.Finally,the results of cases tested demonstrate the effectiveness of the proposed approach.展开更多
Introduction:Land use intensification and urbanisation processes are degrading hydrological ecosystem services in the Guapi-Macacu watershed of Rio de Janeiro.A proposal to pay farmers to restore natural watershed ser...Introduction:Land use intensification and urbanisation processes are degrading hydrological ecosystem services in the Guapi-Macacu watershed of Rio de Janeiro.A proposal to pay farmers to restore natural watershed services might be an alternative to securing the water supply in the long-term for the around 2.5 million urban water users in the study region.This study quantifies the costs of changing current land use patterns to enhance watershed services and compares these costs to the avoided costs associated with water treatment for public supply.Methods:We use farm-household data to estimate the opportunity costs of abandoning current land uses for the recovery of natural vegetation;a process that is very likely to improve water quality in terms of turbidity due to reduced inputs from erosion.Opportunity cost estimates are extrapolated to the watershed scale based on remote sensing land use classifications and vulnerability analysis to identify priority zones for watershed management interventions.To assess the potential demand for watershed services,we analyse water quality and treatment cost data from the main local water treatment plant.Results:Changing agricultural land uses for watershed services provision generally comes at high opportunity costs in our study area near to the metropolis of Rio de Janeiro.Alternative low cost watershed conservation options do exist in the livestock production sector.These options have the potential to directly reduce the amount of sediments and nutrients reaching the water bodies,and in turn decrease the costs of treatment needed for drinking water.Land cover changes at the scale needed to improve water quality will,nonetheless,likely exceed the cost of additional investments in water treatment.Conclusions:The state water utility company’s willingness to pay for watershed services alone will not be enough to induce provision of additional watershed services.We conclude that monetary incentives conditioned on specific adjustments to existing production systems could still have a complementary role to play in improving watershed services.However,we note that our willingness to pay analysis focusses on only one of the potentially wide range of ecosystem services provided by natural vegetation in the Guapi-Macacu watershed.Factoring these ecosystem services into the willingness to pay equation is likely to change our assessment in favour of additional conservation action,be it through PES or other policy instruments.展开更多
文摘This study analyzes a compensation reform proposal designed to prevent inaccurate ratings produced by credit rating agencies(CRAs).Specifically,the CRA’s incentive to exert effort to observe the portfolio’s signal and adopt the rating disclosure policy is investigated under the rating-contingent and incentive-based contract.The issuer has a risky portfolio and solicits a rating from the CRA,which endogenously observes a signal and decides on a rating disclosure policy during the rating production process.The findings reveal that the CRA exerts no effort to observe a signal and inflate the rating under the rating contingent contract.Under the incentive-based contract,the CRA always exerts an optimal effort to observe a signal and adopt the full disclosure regime.Hence,the incentive-based contract better incentivizes the CRA to exert more effort to improve rating accuracy and implement the full disclosure policy than the rating contingent contract.
基金This work is sponsored by Department of Commerce,State of Washington,and US Department of Energy,USA,through the Transactive Campus Energy Systems project,in collaboration with Pacific Northwest National Lab and University of Washington.
文摘This paper reviews the state of the art of research and industry practice on demand response and the new methodology of transactive energy. Demand response programs incentivize consumers to align their demand with power supply conditions, enhancing power system reliability and economic operation. The design of demand response programs, performance of pilot projects and programs, consumer behaviors, and barriers are discussed.Transactive energy is a variant and a generalized form of demand response in that it manages both the supply and demand sides. It is intended for a changing environment with an increasing number of distributed resources and intelligent devices. It utilizes the flexibility of various generation/load resources to maintain a dynamic balance of supply and demand. These distributed resources are controlled by their owners. However, the design of transaction mechanisms should align the individual behaviors with the interests of the entire system. Transactive energy features real-time, autonomous, and decentralized decision making.The transition from demand response to transactive energy is also discussed.
基金This work was supported in part by NSF CyberSEES-1331863,ECCS-1546682,NSF grants CNS-1149458,AST-1443891,EFRI-1440969,CCF-1331863,IIS-1636772NSF Science&Technology Center Grant CCF-0939370Electric Reliability Council of Texas(ERCOT),and the Power Systems Engineering Research Center.
文摘Demand Response(DR)provides both operational and financial benefits to a variety of stakeholders in the power system.For example,in the deregulated market operated by the Electric Reliability Council of Texas(ERCOT),load serving entities(LSEs)usually purchase electricity from the wholesale market(either in day-ahead or real-time market)and sign fixed retail price contracts with their end-consumers.Therefore,incentivizing end-consumers’load shift from peak to off-peak hours could benefit the LSE in terms of reducing its purchase of electricity under high prices from the real-time market.As the first-of-its-kind implementation of Coupon Incentive-based Demand Response(CIDR),the EnergyCoupon project provides end-consumers with dynamic time-of-use DR event announcements,individualized load reduction targets with EnergyCoupons as the incentive for meeting these targets,as well as periodic lotteries using these coupons as lottery tickets for winning dollar-value gifts.A number of methodologies are developed for this special type of DR program including price/baseline prediction,individualized target setting and a lottery mechanism.This paper summarizes the methodologies,design,critical findings,as well as the potential generalization of such an experiment.Comparison of the EnergyCoupon with a conventional Time-of-Use(TOU)price-based DR program is also conducted.Experimental results in the year 2017 show that by combining dynamic coupon offers with periodic lotteries,the effective cost for demand response providers in EnergyCoupon can be substantially reduced,while achieving a similar level of demand reduction as conventional DR programs.
基金supported by the National Natural Science Foundation of China (No.51777155).
文摘Driven by modern advanced information and communication technologies,distributed energy resources have great potential for energy supply within the framework of the virtual power plant(VPP).Meanwhile,demand response(DR)is becoming increasingly important for enhancing the VPP operation and mitigating the risks associated with the fluctuation of renewable energy resources(RESs).In this paper,we propose an incentivebased DR program for the VPP to minimize the deviation penalty from participating in the power market.The Markov decision process(MDP)with unknown transition probability is constructed from the VPP’s prospective to formulate an incentivebased DR program,in which the randomness of consumer behavior and RES generation are taken into consideration.Furthermore,a value function of prospect theory(PT)is developed to characterize consumer’s risk attitude and describe the psychological factors.A model-free deep reinforcement learning(DRL)-based approach is proposed to deal with the randomness existing in the model and adaptively determine the optimal DR pricing strategy for the VPP,without requiring any system model information.Finally,the results of cases tested demonstrate the effectiveness of the proposed approach.
基金The authors acknowledge financial support of the IPSWAT Programme(financed from the German Federal Ministry of Research-BMBF)and the DINARIO Project:“Climate Change,Landscape dynamics,Land use and Natural Resources in the Atlantic Forest of Rio de Janeiro”。
文摘Introduction:Land use intensification and urbanisation processes are degrading hydrological ecosystem services in the Guapi-Macacu watershed of Rio de Janeiro.A proposal to pay farmers to restore natural watershed services might be an alternative to securing the water supply in the long-term for the around 2.5 million urban water users in the study region.This study quantifies the costs of changing current land use patterns to enhance watershed services and compares these costs to the avoided costs associated with water treatment for public supply.Methods:We use farm-household data to estimate the opportunity costs of abandoning current land uses for the recovery of natural vegetation;a process that is very likely to improve water quality in terms of turbidity due to reduced inputs from erosion.Opportunity cost estimates are extrapolated to the watershed scale based on remote sensing land use classifications and vulnerability analysis to identify priority zones for watershed management interventions.To assess the potential demand for watershed services,we analyse water quality and treatment cost data from the main local water treatment plant.Results:Changing agricultural land uses for watershed services provision generally comes at high opportunity costs in our study area near to the metropolis of Rio de Janeiro.Alternative low cost watershed conservation options do exist in the livestock production sector.These options have the potential to directly reduce the amount of sediments and nutrients reaching the water bodies,and in turn decrease the costs of treatment needed for drinking water.Land cover changes at the scale needed to improve water quality will,nonetheless,likely exceed the cost of additional investments in water treatment.Conclusions:The state water utility company’s willingness to pay for watershed services alone will not be enough to induce provision of additional watershed services.We conclude that monetary incentives conditioned on specific adjustments to existing production systems could still have a complementary role to play in improving watershed services.However,we note that our willingness to pay analysis focusses on only one of the potentially wide range of ecosystem services provided by natural vegetation in the Guapi-Macacu watershed.Factoring these ecosystem services into the willingness to pay equation is likely to change our assessment in favour of additional conservation action,be it through PES or other policy instruments.
