Publications

A tutorial on building policy models as mixed-complementarity problems

Interfaces

After 50 years of development, building and solving mixed-complementarity problems (MCPs) have become commonplace for policy models that analyze markets. These models are used to develop policies that reshape markets, or introduce markets that replace other organizational forms. In this…

Frederic Murphy, Axel Pierru, Yves Smeers

Economic impacts of debottlenecking congestion in the Chinese coal supply chain

Energy Economics

The fast pace of development in China’s coal industry created bottlenecks in its transportation infrastructure. These bottlenecks likely affected not only China’s domestic coal market, but also global coal markets. In this paper, we estimate the costs and consequences of…

Bertrand Rioux, Philipp Galkin, Frederic Murphy, Axel Pierru

The prospects for coal-fired power generation in Saudi Arabia

Energy Strategy Reviews

Almost all of Saudi Arabia’s electric power generation is fueled by oil and gas. Plans for future capacity envisage nuclear and renewables supplementing this mix and thereby freeing up oil for other revenue-generating opportunities. Coal-fired generation has been promoted in…

Walid Matar, Rodrigo Echeverri, Axel Pierru

Does disagreement among oil price forecasters reflect volatility? Evidence from the ECB surveys

International Journal of Forecasting

We examine quarterly oil price forecasts from the Survey of Professional Forecasters conducted by the European Central Bank. We present three empirical findings, all of which are robust to the number of respondents considered. First, the dispersion of forecasts is…

Tarek Atalla, Fred Joutz, Axel Pierru

Potential Gains From Reforming Price Caps in China’s Power Sector

Bertrand Rioux, Philipp Galkin, Axel Pierru, Frederic Murphy

When energy sectors transition from government-controlled to market-driven systems, the legacy regulatory instruments can create unintended market distortions and lead to higher costs. In China, the most notable regulatory throwback is ceilings on electricity prices that generators can charge utilities,…

Rioux, Bertrand

Galkin, Philipp

Pierru, Axel

Murphy, Frederic

The Prospects for Coal-fired Power Generation in Saudi Arabia

Axel Pierru, Walid Matar

Almost all of Saudi Arabia’s electric power generation is fueled by oil and gas. Plans for future capacity envisage nuclear and renewables supplementing this mix and freeing up oil for other revenue-generating opportunities. Coal-fired generation has been promoted in some…

Pierru, Axel

Matar, Walid

Economic Impacts of Debottlenecking Congestion in the Chinese Coal Supply Chain

Philipp Galkin, Frederic Murphy, Axel Pierru, Bertrand Rioux

China’s coal industry grew at unprecedented rates during the first decade of the 2000s in order to support equally unprecedented economic growth. In that type of environment, it is impossible for the capacities of every link in the supply chain…

Galkin, Philipp

Murphy, Frederic

Pierru, Axel

Rioux, Bertrand

Efficient Industrial Energy Use: The First Step in Transitioning Saudi Arabia’s Energy Mix

Walid Matar, Axel Pierru, Frederic Murphy, David Wogan, Bertrand Rioux

External observers worry about whether Saudi domestic consumption of oil will crowd out exports. This is based on simple extrapolations which suggest that in a little more than 20 years Saudi Arabia may become a net importer of hydrocarbon fuels.…

Matar, Walid

Pierru, Axel

Murphy, Frederic

Wogan, David

Rioux, Bertrand

Lowering Saudi Arabia’s fuel consumption and energy system costs without increasing end consumer prices

Energy Economics

Using a multi-sector equilibrium model of the Saudi energy system that handles administered prices in a mixed-complementarity formulation, we present results from a set of policy scenarios that lower oil consumption in the country. Some of these scenarios are the…

Walid Matar, Frederic Murphy, Axel Pierru, Bertrand Rioux

Why build energy models as MCPs? An economic perspective

Frederic Murphy, Axel Pierru

The discipline of microeconomics focuses on the outcomes of the actions of economic agents, where economic agents can be individuals as producers and consumers or organizations that deliver goods or services. Microeconomists have developed a collection of models to understand…

Murphy, Frederic

Pierru, Axel

The impact of oil price volatility on welfare in the kingdom of saudi arabia: Implications for public investment decision-making

Energy Journal

Since real oil price is positively correlated with real consumption and domesticincome in Saudi Arabia, a risk premium needs to be considered when assessingthe net present value of oil-related public investment projects. For projects generatingadditional oil exports, this risk premium…

Axel Pierru, Walid Matar

Lowering Saudi Arabia’s fuel consumption and energy system costs without increasing end consumer prices

Walid Matar, Frederic Murphy, Axel Pierru, Bertrand Rioux

Saudi Arabia aims to reduce the growth of its energy demand. This paper outlines an approach that could help the country to reduce substantively its current fuel consumption and could result in a net economic gain without increasing current end…

Matar, Walid

Murphy, Frederic

Pierru, Axel

Rioux, Bertrand

An Introduction to Oil Market Volatility Analysis

OPEC Energy Review 37

Walid Matar, Axel Pierru

Capital structure in LNG infrastructures and gas pipelines projects: Empirical evidences and methodological issues

Energy Policy

This paper provides new empirical insights on the capital structure of project-financed LNG infrastructures and gas pipeline projects, by using data relating to projects whose financial close occurred between June 2004 and March 2011. Most results are consistent with the…

Axel Pierru

A simple approach to valuing a multinational firm’s tax shields

Applied Financial Economics

We consider a multinational firm that seeks to maximize its total amount of interest tax shield while following a constant debt ratio policy on a global level. The firm’s total interest tax shield can then be considered as a piecewise-linear…

Axel Pierru, Tarek Atalla

Sensitivity of policy simulation to benchmark scenarios in CGE models: illustration with carbon leakage

UCL CORE Discussion Paper 2012/63

In a Computable General Equilibrium (CGE) setting, we show how the cost of a carbon policy for an open economy depends on the assumptions made about future exogenous structural changes. For dynamic CGE models, we propose an analytical framework derived from static…

Olivier Durand-Lasserve, Axel Pierru

Country risk, ownership concentration and debt ratio of gas transport projects: a statistical analysis

Energy Procedia

Axel Pierru

Effects of the uncertainty about global economic recovery on energy transition and CO2 price

MIT CEEPR Working Paper WP 11-005

Axel Pierru, Yves Smeers

Financing mix and project valuation: alternative methods and possible adjustments

Kolb Series in Finance, John Wiley & Sons, Inc., Hoboken, New Jersey

Axel Pierru

Examining the role of financial investors and speculation in oil markets

Journal of Alternative Investments

Axel Pierru