Littérature scientifique sur le sujet « Electric utilities – Government policy – Spain »

Purpose This paper aims to examine empirically if the encouragement by government policy of merger and acquisition activity involving municipal and provincially owned electricity distribution utilities (LDCs) in the Province of Ontario has had positive effects in terms of value creation, operating performance and economies of scale. Design/methodology/approach It was anticipated that with LDC consolidation, there will be increased operational efficiency and improvement in the cost-effectiveness of the merged electrical utility. Using matched pairs dependent t-testing and Wilcoxon signed-rank testing, the authors compared data for three years before and after the merger or acquisition of 16 municipal utilities (616 total observations) to determine if there were any statistically significant changes (positive or negative) in measures of financial, operational and service efficiency. Findings The findings indicate statistically significant increases in debt as a percentage of shareholder equity in post-merger/acquisition utilities and consequently leveraged higher returns on equity. However, there were no statistically significant changes in financial, operational or service efficiency measures (with the exception of decreased efficiency in telephone response). Research limitations/implications A total of 16 mergers or acquisitions were reviewed involving 32 of 79 LDCs, with the research implications pointing to a need for existing policy to be reviewed to determine whether a more detailed examination is required by the provincial energy regulator, including a closer examination of managerial motives, before approving mergers between municipal electricity distributors. This research involves only a quantitative approach and further research would examine these transactions using qualitative measures for a deeper examination as to managerial motives. Practical implications The results suggest that the mergers or acquisitions to date have served only to increase shareholder risk without improvement in other financial, operational or service efficiencies, a contradiction to the rationale behind the Province’s merger policy. Social implications The consolidation policy for Ontario LDCs has not resulted in any statistically significant improvement in electricity rates or service for consumers. Originality/value This paper is the first examination of the effects of Ontario’s LDC consolidation policy in terms of specific financial, operational and service efficiency measures.

Since its foundation in 1906, the Hydro-Electric Power Commission of Ontario exerted a major influence on the politics of electricity in the United States. American supporters of publicly-owned utilities saw the Hydro as a model worth emulating south of the border. Reformers who sought lower electric prices for consumers also looked to the Hydro for evidence of the technically-feasible lowest cost of producing and transmitting this source of energy. This paper will examine a specific instance when American Progressives sought to use the Hydro as both a source of information and inspiration for electric policy reforms: the Giant Power Survey of 1923-1927, an attempt by Pennsylvania Governor Gifford Pinchot to bring about lower electricity costs for consumers and to extend access to rural areas, through a mix of greater regulation and government action. The individuals involved in Giant Power came into close contact with Hydro officials for the vital administrative and technical information with which to argue for their cause; the Ontarians, however, had their own reasons to be wary of getting involved in a controversial proposal.

The deployment of zero-emission vehicles has the potential to drastically reduce air pollution and greenhouse gas emissions from road transport. The purpose of this study is to provide evidence on, and quantify the factors that influence, the European market for electric and fuel cell car technologies. The paper reports the results of a stated preference survey among 1,248 car owners in France, Germany, Italy, Poland, Spain and the United Kingdom. The variables that influence powertrain choice are quantified in a nested multinomial logit model. We find that the electric car purchase price continues to be a major deterrent to sales in the surveyed countries. The majority of the respondents considered government incentives as fundamental or important for considering an electric car purchase. Because of the differences in the socio-economic characteristics of consumers in each country, the effectiveness of government incentives may vary across Europe.

PurposeThe purpose of this study is to investigate the challenges before India for electric vehicle (EV) adoption by 2030. The study further looks into the measures taken by the Government of India (GOI) to promote research and development in EV sector and what is yet to be done.Design/methodology/approachIn the present study, the challenges are identified allied to the commercialization of EVs in India. The data are collected, analyzed and compiled through secondary sources. The secondary data give a concise insight and comprehensive information regarding what is occurring around the globe as well as in the Indian context. Further, the challenges are investigated through a focus group study consisting of 11 participants from industry and academia.FindingsThe findings from the study are the critical roles of sharing economy and public utilities in the promotion of EV adoption, given the high cost of EV, lack of infrastructure and poor purchasing power of Indian customers. The sharing economy perspective provides various opportunities for the government to manage the resources (electric-powered transport system) optimally. Further, the study compares the global perspective in assigning the target figures.Research limitations/implicationsThe study highlights the facilitating role of the shared format in EV technology promotion but ignores the hurdles that can come in its implementations. Also, the focus group study has its limitation as it relies more on participants' perceptions and opinions.Originality/valueThe present study assists GOI and various stakeholders in having a realistic plan rather than daydreaming with overambitious goals. The diffusion of technology as a shared format (especially in the context of EV) has not been academically approached in the past literature.

In 1935, Congress enacted the Federal Power Act. The Act split jurisdiction over electricity generation and distribution between the Federal and state governments. The Act delegated to the Federal government jurisdiction over interstate wholesales and interstate transmission. The Act gave state governments jurisdiction over intrastate wholesales, intrastate transmission, generation, local distribution, and retail sales. Big, vertically-integrated monopoly utilities dominated the market before and for 60 years after the passage of the Act. However, over time, changes in technology and policy in the wholesale market eroded the dominance of those vertically-integrated monopoly utilities and complicated this jurisdictional bright line. In 2011, the Federal Energy Regulatory Commission (FERC) issued Order 745, requiring wholesale markets to permit demand response to operate on equal footing to traditional sources of generation. Unlike typical electricity generation, demand response involves paying consumers for a commitment not to consume electricity at a certain time. The Supreme Court sustained that Order in the 2016 case FERC v. Electric Power Supply Association. The Order allowed states to opt out of FERC’s demand response rules. This Note advocates for the removal of that state opt-out, analyzes its likely success against court challenges, and explores the possible limits of FERC jurisdiction after the 2020 case National Association of Regulatory Utility Commissioners v. FERC. If demand response reaches its full potential, it could provide as much electricity as hundreds of peak power plants. Removing the opt-out and integrating all possible demand response resources into the wholesale market is particularly timely and important given its potential to alleviate the economic and human toll from widespread blackouts such as the February 2021 Texas power system failure.

The demand for electric vehicles continues to grow, as evidenced by global sales of electric vehicles reaching 2.2 million in 2019 and more than doubling to 6.6 million in 2021. The rapid growth of renewable energies and electric vehicles (EVs) necessitates the use of microgrids, which are a promising solution to the problem of integrating large-scale renewables and EVs into the electric power system. Besides, the essential policy support provided by the government is an increase in the availability of public charging infrastructure for EVs. This research employs a fast-charging configuration of an off-board charger with DC energy transfer. Implementation of DC energy transfer for vehicle-to-grid and grid-to-vehicle technology in a microgrid due to DC charging’s unrestricted charger-rated power and rapid power transfer. However, the integration of EVs in the Microgrid system creates some operational challenges, which in this research are power quality issues such as harmonics in power systems that affect both utilities and consumers. The design models using the PI controller and the fuzzy controller based on MATLAB software are simulated to determine the control system’s effectiveness. These simulations assess the control system’s performance, and both approaches help improve the system’s performance power quality by minimizing the system’s total harmonic distortion (THD). According to the results, the fuzzy logic controller exceeded the traditional PI controller as demonstrated by minimizing the THD and also in terms of improving the waveform quality which achieved high accuracy with good performance. This research also utilized the fuzzy logic controller to control the power transfer between EVs and the microgrid, which differs from other research work, to achieve high system efficiency for the benefit of consumers.

Electric utilities are directly affected by, and in some cases are a source of, many pressing climate adaptation challenges: wildfires, vulnerable infrastructure, extreme storms, and drought. The state Public Utilities Commission (PUC) is one of the most consequential government agencies guiding the electricity sector's response to climate change. Rate-regulated utilities may not charge ratepayers for new capital investments without PUC approval. When PUCs decide which costs are eligible for rate recovery, they also define which risks utilities seek to manage and which hedging strategies they use to do so. This Article argues that the foundational principles of ratemaking allow the state PUC to manage many aspects of electricity sector adaptation planning, coordination, and implementation. The Article begins with an overview of ratemaking for electric utilities and identifies how the process is an exercise in risk management. The Article then explains how a risk governance perspective can position the PUC to explicitly incorporate climate adaptation into ratemaking procedures as well as help coordinate adaptation policy across multiple agencies.

In the last two decades, more than half of the countries in the world have introduced a reform process in their power industries and billions of dollars have been spent on liberalizing electricity markets around the world. This thesis presents a doctoral research concerned with the cross-country empirical analysis of the electricity market reforms. The thesis is in three-paper format; that is, we present three independent but related stand-alone papers. The first paper focuses on the impact of power market reforms on electricity price-cost margins and industrial/residential price ratios. It investigates this issue by looking at the impact of the electricity industry reforms on residential and industrial electricity price-cost margins and their effect on industrial/residential price ratios. Using panel data from 63 developed and developing countries covering the period 1982–2009, empirical models are developed and analysed. The results suggest that each individual reform step has different impact on price-cost margins and industrial/residential price ratios for each consumer and country group. That is to say, our findings imply that similar reform steps may have different impacts in different countries, which supports the idea that reform prescription for a specific country cannot easily be transferred to another one with similar success. The second paper explores whether the question of why some countries are able to implement more extensive reforms is closely related to the question of why some countries have better institutions than others. It analyses this question by using an empirical econometric model based on Poisson regression with cross-section data covering 51 states in US, 13 provinces in Canada and 51 other countries. The study concludes that both the background of the chairperson and the minister/governor and institutional endowments of a country are important determinants of how far reforms have gone in a country. Considering the fact that ideological considerations, political composition of governments and educational/professional background of leaders have played and will play a crucial role throughout the reform process; the third paper attempts to discover the impact of political economic variables on the liberalization process in electricity markets. It develops and analyses empirical models using panel data from 55 developed and developing countries covering the period 1975–2010. The results suggest that a portion of the differences in the reform experiences of reforming countries in the past three decades can be explained by differences in the political structure, in the ideology of the government and in the professional and educational backgrounds of the political leaders.

Defence date: 20 June 2003
Examining board: Prof. Dr. Joam Carmona, Universidad de Santiago de Compostela ; Prof. Dr. Giovanni Federico, Instituto Universitario Europeo ; Prof. Dr. Jaime Reis, Instituto Universitario Europeo ; Prof. Dr. Luciano Segreto, Università degli Studi di Firenze
PDF of thesis uploaded from the Library digitised archive of EUI PhD theses completed between 2013 and 2017

In this dissertation I offer an explanation for why Indian states are undertaking economic liberalization at different rates, focusing on reforms to the electricity sector. In the period between 1991 and 2003, India's states restructured their electricity systems to vastly different degrees. The dissertation evaluates three variables that feature prominently in the literature on economic policy change: ideological predilections of governing elites, external pressures like those coming from international financial institutions, and state-society interactions. I argue that it is the last explanation, focusing on the degree to which the potential "losers" from reform dominate state politics--that most compellingly accounts for the unevenness in state-level reforms. In my work, I lay greater analytic weight on the role of rural actors than much of the existing literature on the political economy of market reforms. The primary independent variable that explains this variation in reform outcomes is the organization and political strength of societal actors in each state, particularly rural and industrial constituencies, and middle class interests. In some parts of India, the advent of Green Revolution technologies in the late 1960s meant that farmers--chiefly larger landowners--became the primary beneficiaries of extensive development subsidies, including those for electricity. During India's period of economic liberalization in the 1990s, these beneficiaries constituted the main opponents of privatization, which today threatens to change the rules of the game by allocating resources according to market logics. Given these dynamics, where farm sectors are large or well-organized, reform has not proceeded. In the absence of rural political clout, state elites elected to privatize in order to satisfy industrial and urban constituents and signal the state's openness to private capital inflows. By comparing outcomes across states within the single country of India, the research design can control for some variables that are proposed as determinative of government policy, like electoral institutions and macroeconomic shock. I have selected cases to both capture variation of the dependent variable and control for other plausible explanations, such as ideology, financial crisis, and external pressure.
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The electric power industry in the United States will face a number of great challenges in the next two decades, including increasing electricity demand and the aging of the current fleet of power plants. These challenges present a major test for the industry, which must invest between $1.5 trillion and $2 trillion by 2030 to meet the increased demand. In addition to these challenges, the potential for climate legislation, controversy over hydraulic fracturing, and post-Fukushima safety concerns have all resulted in significant uncertainty regarding the economics of all major sources of base-load electricity. Currently nuclear power produces 22% of the nation’s electricity, and over 70% of the nation’s low-carbon electricity, even though unfavorable economic conditions have stalled construction of new reactors for over 30 years. The economics are changing, however, as evidenced by the recent construction and operating licenses (COLs) awarded by the Nuclear Regulatory Commission to Southern Company and SCANA Corporation to build two new units each. The successful construction of these units could lead to more favorable financing for future plants. This improved financing, especially if combined with appropriate additional government support, could provide serious momentum for the resurgence of nuclear power in the United States. The most important way in which government support could benefit nuclear power is by increasing the amount of loan guarantees provided to the first wave of new nuclear power plants. This will help encourage additional new builds, which will help reduce the financing risk premium for new nuclear and improve interest rates for future plants. Instead of simply increasing loan guarantees for nuclear energy, a permanent federal financing structure should be established to provide loan guarantees for “clean energy” technologies in general, a category in which nuclear energy should be included. Most importantly, any changes should be made as part of a coherent, long-term energy policy, which would provide utilities with the correct tools to make the necessary investments, and the confidence that will allow them to undertake large-scale projects.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.

Public procurement of goods and services contributes to about 15% of global greenhouse gas emissions. In the EU, public purchasing represents 15% of its GDP, acting as a major influencer on the market through the products and services acquired by governments from the local to national levels. The public sector has a role to play in leveraging this purchasing power to achieve the best societal value for money, particularly as we scramble to bend the curve of our planet’s warming. Globally, the construction and transport sectors each represent about 12% of government procurements’ GHG emissions. Furthermore, these sectors’ decarbonization efforts demand profound and disruptive technological shifts. Hence, prioritizing these sectors can make the greatest impact towards reducing the environmental footprint of the public sector and support faster decarbonization of key emitting industries. Meanwhile, the EU committed to achieving 55% reduction in GHG emissions by 2030 compared to 1990 levels. Drastic emissions reductions are needed at an unprecedented speed and scale to achieve this goal. Green Public Procurement (GPP) is the practice of purchasing goods and services using environmental requirements, with the aim of cutting carbon emissions and mitigating environmental harm throughout the life cycle of the product or service. While the EU and many of its Member States alike have recognized GPP as an important tool to meet climate goals, the formalization of GPP requirements at the EU level or among local and national governments has been fragmented. We call for harmonization to achieve the consistency, scale and focus required to make GPP practices a powerful decarbonization tool. We surveyed the landscape of GPP in the EU, with a focus on construction and road transport. Through interviews and policy research, we compiled case studies of eight Member States with different profiles: Sweden, the Netherlands, France, Germany, Estonia, Poland, Spain and Italy. We used this information to identify solutions and best practices, and to set forth recommendations on how the EU and its countries can harmonize and strengthen their GPP policies on the path toward cutting their contributions to climate change. What we found was a scattered approach to GPP across the board, with few binding requirements, little oversight and scant connective tissue from national to local practices or across different Member States, making it difficult to evaluate progress or compare practices. Interviewees, including policy makers, procurement experts and procurement officers from the featured Member States, highlighted the lack of time or resources to adopt progressive GPP practices, with no real incentive to pursue it. Furthermore, we found a need for more awareness and clear guidance on how to leverage GPP for impactful societal outcomes. Doing so requires better harmonized processes, data, and ways to track the impact and progress achieved. That is not to say it is entirely neglected. Most Member States studied highlight GPP in various national plans and have set targets accordingly. Countries, regions, and cities such as the Netherlands, Catalonia and Berlin serve as beacons of GPP with robust goals and higher ambition. They lead the way in showing how GPP can help mitigate climate change. For example, the Netherlands is one of the few countries that monitors the effects of GPP, and showed that public procurement for eight product groups in 2015 and 2016 led to at least 4.9 metric tons of avoided GHG emissions. Similarly, a monitoring report from 2017 showed that the State of Berlin managed to cut its GHG emissions by 47% through GPP in 15 product groups. Spain’s Catalonia region set a goal of 50% of procurements using GPP by 2025, an all-electric in public vehicle fleet and 100% renewable energy powering public buildings by 2030. Drawing from these findings, we developed recommendations on how to bolster GPP and scale it to its full potential. In governance, policies, monitoring, implementation and uptake, some common themes exist. The need for: • Better-coordinated policies • Common metrics for measuring progress and evaluating tenders • Increased resources such as time, funding and support mechanisms • Greater collaboration and knowledge exchange among procurers and businesses • Clearer incentives, binding requirements and enforcement mechanisms, covering operational and embedded emissions With a concerted and unified movement toward GPP, the EU and its Member States can send strong market signals to the companies that depend on them for business, accelerating the decarbonization process that our planet requires.