Browsing by Author "Counsell, Kevin"
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Item Open Access Achieving Efficiency in Water Allocation: A Review of Domestic and International Practices(Te Herenga Waka—Victoria University of Wellington, 2003) Counsell, KevinAs populations grow and demand for clean water increases managing and allocating scarce water resources is becoming an increasingly important task. A vital part of this task is establishing the appropriate framework for the water sector which includes establishing effective property rights to water and the appropriate institutional arrangements to allocate these rights. In this paper we outline the current framework for water allocation and management in New Zealand. We identify a number of issues with the current framework and arguethat these issues are significant enough to warrant consideration of possible alternatives. The obvious firrst place to look for alternative approaches is at overseas arrangements particularly in countries with recent experience in the reform of their water sectors. We outline the arrangements for a number of countries and establish lessons for New Zealand. Although there is no single model of best practice that we identify some basic principles of good water management that will generate benefits for New Zealand.Item Open Access Day-Ahead Electricity Markets: Is There a Place For a Day-Ahead Market in NZEM?(Te Herenga Waka—Victoria University of Wellington, 2003) Evans, Lewis; Counsell, KevinIn this paper we explain the operation and design of day-ahead markets in an electricity market. Day-ahead markets complement real-time markets which must be run to ensure balance in the system and offer a number of benefits to electricity market participants. We argue that in the context of the New Zealand electricity market the benefits of operating a day-ahead market are likely to outweigh the costs. We show that simple forecasts suggest day-ahead prices in New Zealand would be considerably less volatile than real-time prices. As day-ahead markets are effectively hedge markets for a short time period the issues we raise are also important for the operation and development of other longer-term hedge markets.Item Open Access Essays in Water Allocation: The Way Forward(Te Herenga Waka—Victoria University of Wellington, 2005) Evans, Lewis; Counsell, KevinIn this book we consider the tradeable property rights framework as a method of allocating water. Our objectives are to explain why such an approach can improve aspects of New Zealand's current water allocation framework to establish the appropriate set of institutional arrangements for a tradeable rights framework to operate effectively and to examine what may influence the value of tradeable water rights.Item Open Access Forward Markets: The Absent Day-Ahead Market(Te Herenga Waka—Victoria University of Wellington, 2003) Evans, Lewis; Counsell, KevinLewis Evans, at a half day seminar presented, Measuring and developing the performance of New Zealand's power market in September 2003. A more detailed paper by Kevin Counsell and Lewis Evans entitled Day-Ahead Electricity Markets: Is there a Place for a Day-Ahead Market in the NZEM is available through this linkItem Restricted Methods for the allocation and valuation of water property rights in New Zealand(Te Herenga Waka—Victoria University of Wellington, 2004) Counsell, KevinGrowing populations and incomes leading to increased competition for water are placing a strain on existing water resources worldwide - a strain that many current frameworks for water allocation fail to adequately address. Nonetheless, many countries have recognized the need to allocate scarce water resources efficiently and have implemented, or are beginning to implement, more effective property rights frameworks for water allocation. This study considers methods, based on economic theory and the experiences of a sample of countries, for the allocation and valuation of water property rights in New Zealand. It firstly addresses New Zealand's current framework for water allocation and identifies a number of issues with this framework. Based on recent experience with similar issues in other countries, this study finds that significant benefits to New Zealand's water sector could be generated by creating well-defined and tradable property rights to water. Within such property rights frameworks, it is also important that the value of these rights is well known by water users. This study outlines separate approaches for the valuation of two types of water rights for, respectively, the extraction of water and the storage of water. These types of rights are modelled as options, where the right holder has an option to extract or store water. Thus, contingent claims analysis can be used to determine the value of such rights. The results of this study have implications for New Zealand's current water allocation framework and the value of property rights to water, both within this current framework and in more desirable tradable water rights frameworks.Item Open Access Options Provided by Storage can Explain High Electricity Prices(Te Herenga Waka—Victoria University of Wellington, 2006) Evans, Lewis; Counsell, Kevin; Guthrie, GraemeGenerators supplying electricity markets are subject to volatile input and output prices and uncertain fuel availability. Price-risk may be hedged to a considerable extent but fuel-risk - water flows in the case of hydro and gas availability in the case of thermal plants - may not be. We show that a price-taking generator will only generate when the output price exceeds its marginal cost by an amount that reflects the value of the option to delay the use of stored fuel. The corresponding offer price is different from the theorized offer prices of static uniform auctions and more akin to pay-as-bid auction prices. We argue that the option value of delaying fuel use which is an increasing function of spot price volatility and the uncertainty about fuel availability must be considered when evaluating whether market power is present in electricity markets. The engineering approach to simulating an electricity supply curve which has been used in market power evaluations to date may lead to supply curves that are quite different from those that recognize possible fuel availability limitations even in the complete absence of market power.Item Open Access Protection of Private Property Rights and Just Compensation(Te Herenga Waka—Victoria University of Wellington, 2009) Quigley, Neil; Evans, Lewis; Counsell, KevinIn the last decade politicians from across the political spectrum have talked about 'transforming' New Zealand from an economy focused on land-based industries to an economy focused on investment in technology-based and high-value-added industries by promoting investment in and retaining New Zealand ownership of businesses developed in this country. In this paper we argue that New Zealand's current approach to the protection of property rights in particular protection from the state's taking of property rights without compensation runs contrary to this objective and to the more general objective of economic and social progress in New Zealand.Item Open Access Save it for a Sunny Day: The Value of Water Storage(Te Herenga Waka—Victoria University of Wellington, 2004) Counsell, KevinKevin Counsell presented Save it for a Sunny Day: The Value of Water Storage at an ISCR Seminar.Item Open Access Stirring the Waters: A Review of Water Allocation Practice(Te Herenga Waka—Victoria University of Wellington, 2003) Counsell, KevinKevin Counsell presented Stirring the Waters: A Review of Water Allocation Practice in October 2003. Kevin's paper on the topic, Achieving Efficiency in Water Allocation: A Review of Domestic and International Practices, can be found through this link.Item Open Access Struggling Upstream Efficient Water Allocation on the Waitaki River and Elsewhere(Te Herenga Waka—Victoria University of Wellington, 2004) Evans, Lewis; Counsell, KevinKevin Counsel and Professor Lewis Evans presented Struggling Upstream: Efficient Water Allocation on the Waitaki River and Elsewhere in Wellington and Auckland in July 2004.Item Open Access Struggling Upstream Towards a Framework for Efficient Water Allocation on the Waitaki River and Elsewhere(Te Herenga Waka—Victoria University of Wellington, 2004) Evans, Lewis; Counsell, KevinThis supplement published in March of 2004 discusses:Aspects of a water allocation framework Valuing water in a water market Water allocation under the Waitaki billHow the Waitaki bill fits a desirable framework