Showing papers in "International Journal of Energy Sector Management in 2012"

An econometric study of carbon dioxide (CO2) emissions, energy consumption, and economic growth of Pakistan

Abstract: Purpose – The purpose of this paper is to examine the relationship among environmental pollution, economic growth and energy consumption per capita in the case of Pakistan. The per capital carbon dioxide (CO2) emission is used as the environmental indicator, the commercial energy use per capita as the energy consumption indicator, and the per capita gross domestic product (GDP) as the economic indicator.Design/methodology/approach – The investigation is made on the basis of the environmental Kuznets curve (EKC), using time series data from 1971 to 2006, by applying different econometric tools like ADF Unit Root Johansen Co‐integration VECM and Granger causality tests.Findings – The Granger causality test shows that there is a long term relationship between these three indicators, with bidirectional causality between per capita CO2 emission and per capita energy consumption. A monotonically increasing curve between GDP and CO2 emission has been found for the sample period, rejecting the EKC relationship, i...

Long run energy demand in Iran: a scenario analysis

Abstract: Purpose – Iran as an energy‐rich country faces many challenges in the optimal utilization of its vast resources. High rates of population and economic growth, a generous subsidies program, and poor resource management have contributed to rapidly growing energy consumption and high energy intensity over the past decades. The continuing trend of rising energy consumption will bring about new challenges as it will shrink oil export revenues, restraining economic activities. This calls for a study to explore alternative scenarios for the utilization of energy resources in Iran. The purpose of this paper is to model demand for energy in Iran and develop two business‐as‐usual and efficiency scenarios for the period 2005‐2030.Design/methodology/approach – The authors use a techno‐economic or end‐use approach to model energy demand in Iran for different types of energy uses and energy carriers in all sectors of the economy and forecast it under two scenarios: business as usual (BAU) and efficiency.Findings – Iran...

Hierarchical multi‐objective optimization of India's energy strategy portfolios for sustainable development

Abstract: Purpose – Optimization of energy planning for growth and sustainable development has become very important in the context of climate change mitigation imperatives in developing countries. Existing models do not capture developing country realities adequately. The purpose of this paper is to conceptualizes a framework for energy strategy optimization of the Indian energy sector, which can be applied in all emerging economies. Design/methodology/approach – Hierarchical multi-objective policy optimization methodology adopts a policy-centric approach and groups the energy strategies into multi-level portfolios based on convergence of objectives appropriate to each level. This arrangement facilitates application of the optimality principle of dynamic programming. Synchronised optimization of strategies with respect to the common objectives at each level results in optimal policy portfolios. Findings – The reductionist policy-centric approach to complex energy economy modelling, facilitated by the dynamic programming methodology, is most suitable for policy optimization in the context of a developing country. Barriers to project implementation and cost risks are critical features of developing countries which are captured in the framework in the form of a comprehensive risk barrier index. Genetic algorithms are suitable for optimization of the first level objectives, while the efficiency approach, using restricted weight stochastic data envelopment analysis, is appropriate for higher levels of the objective hierarchy. Research limitations/implications – The methodology has been designed for application to the energy sector planning for India’s 12th Five Year Plan for which the objectives of faster growth, better inclusion, energy security and sustainability have been identified. The conceptual framework combines, within the policy domain, the bottom-up and top-down processes to form a hybrid modelling approach yielding optimal outcomes, transparent and convincing to the policy makers. The research findings have substantial implications for transition management to a sustainable energy framework. Originality/value – The methodology is general in nature and can be employed in all sectors of the economy. It is especially suited to policy design in developing countries with the ground realities factored into the model as project barriers. It offers modularity and flexibility in implementation and can accommodate all the key strategies from diverse sectors along with multiple objectives in the policy optimization process. It enables adoption of an evidence-based and transparent approach to policy making. The research findings have substantial value for transition management to a sustainable energy framework in developing countries.

Setting the framework for a Business Strategy Assessment Model

Abstract: Purpose – The purpose of this paper is to present the Business Strategy Assessment Model (BSAM) approach, in an attempt to explore the principle dynamics of an energy‐economic system with emphasis on the private actors' point of view and the impact different policy instruments may have on the decisions of private actors with different characteristics.Design/methodology/approach – In the BSAM model, investment decisions under consideration depend on their perceived financial value. Basis for the financial valuation of an investment option is formed by simulating market dynamics with alternative price scenarios. The outputs include: investment strategies, derived as a function of the (uncertain) state vector of future market conditions and risk premium, calculated by contrasting the expected net present value for the optimal timing of the investment and the expected net present value of an immediate investment generation module of the BSAM, while both of these outputs are estimated for each available techno...

Effects of fuel efficiency improvements in personal transportation

Abstract: Purpose – The purpose of this paper is to provide an assessment of the effects of fuel efficiency improvements on four‐wheeler ownership, fuel consumption, fuel imports and emissions for personal transportation in the context of India The paper also aims to measure the rebound effect induced by this policyDesign/methodology/approach – The paper relies on a system dynamics model to analyse the problem A causal loop model was developed initially, which was transformed to a stock and flow diagram Simulation was carried out to capture the effects of fuel efficiency improvements in the four‐wheeler sector of IndiaFindings – The study has revealed that a policy of fuel efficiency improvements is favourable to the Indian four‐wheeler sector growth, but this policy could result in an increase in fuel consumption and therefore a corresponding increase in the fuel imports and emissions in the country This policy also induces direct rebound effect that adds up to the already alarming fuel consumption levelsRe

Energy consumption and attitudes for the promotion of sustainability in buildings: The case of hotels

Abstract: Purpose: The purpose of this paper is to describe the effect of attitudes in promoting sustainable operations in hotels. The aim of this paper is to demonstrate the interaction between the users' behaviour and the way energy is consumed in Greek hotels in a long-term period. Design/methodology/approach: In total, two scenarios are developed, using the Long Range Energy Alternative Planning software (LEAP). Each scenario exhibits different findings proposing significant, but easy to apply alterations to hotels. The first one is the Business as Usual (BaU) scenario, and it is developed based on the current trends in energy use in hotels. The second is the Policy scenario, which is developed based on the existing legislative framework, Greek and EU. Through interviews with open-ended questions, hoteliers' responses reveal their views and attitudes in energy initiatives, along with the level of information they have on the existing energy legislation - Greek and European - to reduce energy consumption in buildings. Findings: This research project, aims at identifying the hoteliers' views in applying energy efficiency measures in their facilities. The BaU scenario displays the current energy consumption in hotels, without policy interventions. The Policy scenario displays the effectiveness of each proposed measure in all services offered in hotels. This analysis provides recommendations in order to improve the current energy framework. Practical implications: This methodology provides the development of a model that combines the existing energy measures considering also the end-users' behaviour. It shows the areas that need to change in order to reduce energy consumption in the whole population of Greek hotels. It is a process that could be applied easily in other countries, not only in Greece. Originality/value: This paper is a generic research analysis. The data collection has been selected for the first time from the sample of hotels. This type of research has not been developed previously in Greek hotels, since attitudes, energy consumption and measures have not been combined previously, in order to promote sustainable operations in hotels. © Emerald Group Publishing Limited.

Policy instruments for a market penetration of low carbon technology in developing nations

Abstract: Purpose – The purpose of this paper is to investigate impacts of policy instruments for market penetration of renewable technologies in South Africa. Based on the current debates about renewable energy policies and the comparative advantage of the country in terms of coal resources the author set up a framework focusing on renewable energy price subsidies, carbon tax and renewable energy portfolio standard.Design/methodology/approach – Using a simulation model through a linear programming approach the paper assesses impacts of those policies on fossil fuel and renewable energy sectors via business‐as‐usual and policy option scenarios. The business‐as‐usual assumes that there are not policy instruments mobilized to promote adoption and diffusion of clean technologies instead of a policy scenario where such policies are included.Findings – The results of the analysis show that when the coal‐based resources are integrated in the simulation process, only carbon tax and renewable energy price‐based subsidies p...

How to reform the power sector in Mexico? Insights from a simulation model

Abstract: Purpose – The purpose of this paper is to address the question of how a developing country, like Mexico, can reform its electricity industry at the same time as addressing climate change issues.Design/methodology/approach – The objective is to provide a tool that policy makers could use to make better and more informed decisions if they decide to liberalise the power sector in Mexico. The problems they would face are difficult to address in an analytically tractable way using conventional economic models. Also, these problems are too idiosyncratic to solve by translating empirical experience from other markets. In response, a system dynamics model has been developed in order to test the impact of a range of different environmental and energy policies.Findings – The paper finds that a reform setting where competition is allowed in fossil fuel technologies; while the public company (CFE) keeps control of hydro and nuclear capacity produce the most well rounded scores in terms of efficiency, CO2 emission red...

Estonian‐Swedish wood fuel trade and market integration: a co‐integration approach

Abstract: Purpose – In the Baltic Sea area, wood fuels have been traded internationally on a relatively large‐scale since the 1990s, with trade flows primarily from the Baltic States to Sweden and Denmark. This has been driven by strong demand for renewable energy in Scandinavia, inexpensive wood resources in the Baltic States and relatively low costs of sea transport. The purpose of this paper is to clarify if this trade has contributed to integration between the wood fuel markets of Sweden and Estonia.Design/methodology/approach – The authors use co‐integration analysis of quarterly price series data from 1998 to 2010, in order to determine whether there are interconnections between wood fuel prices in the two countries. As wood fuels generally are rather bulky, transport costs often have an important impact on price levels. For this reason the analysis is expanded to include estimated transport costs from Estonia to Sweden.Findings – It is concluded that wood fuel prices in Sweden and Estonia are not co‐integrat...

Energy efficiency and conservation in an office building: a case study

Abstract: Purpose – The purpose of this paper is to present a case of an office building in England and show how the technology in energy efficiency in building will contribute to energy conservation.Design/methodology/approach – The paper presents a case of an office building. The building is then modelled and analysed using IES Virtual Environment VE to estimate the Target Emissions Rate (TER) and the Building Emissions Rate (BER) to see how the building could satisfy Part L of the Building Regulations.Findings – The building in case use various sustainable solutions such as limiting the heat loss and gain through the fabric, ventilation system with a good high heat recovery system, increasing the availability of daylight and good lighting control system. The office building in the case study is in full compliance with Part L of the Building Regulations. The sustainable technology in the building will assist the compliance with Part L of the Building Regulations.Research limitations/implications – This is a singl...

Integrating spatial models into regional energy system optimisation: focusing on biomass

Abstract: Purpose – The purpose of this paper is to outline an integrative modelling approach that includes agricultural and forestry process chains in an energy system model, on a regional scale. The main focus is on land use for biomass production, aimed at satisfying the demands for energy, food, and materials.Design/methodology/approach – The described model combines geographic modelling with a linear optimisation approach. The cost‐based optimisation of the energy system includes agricultural and forestry process chains. The system's commodities and processes are identified and these are linked appropriately in the specifications of the reference system. Spatial models provided geographically specific input data for the optimisation; these spatial models were based on publicly available data, regional heat and electricity demands, and regional biomass potentials. The optimisation tool was applied in two case studies.Findings – The optimisation results allow an improved understanding of the interdependencies be...

The impact of emissions trading on electricity spot market price behavior

Abstract: Purpose – Under the Kyoto protocol, emissions trading was imposed upon the Nordic Nord Pool Spot market in 2005. The purpose of this paper is to identify and characterize an important side‐effect of emissions trading on electricity spot market price behavior by statistically comparing price behavior before and after emissions trading was introduced.Design/methodology/approach – The analysis is based on an analysis of the skill of regression models in explaining price behavior before and after 2005.Findings – It turns out that regression models based on background variables such as temperature, water reservoir levels, and even the price of emission rights themselves lose much of their skill from 2005 onwards. The histogram of the residual time series of an optimally calibrated regression model demonstrates a considerably more “fat‐tailed” behavior after 2005, with a much higher volatility and reduced amenability for regression by background variables.Practical implications – The results point to an increas...

Strategies and techniques to future‐proof the energy performance of housing developments

Abstract: Purpose – The purpose of this paper is to investigate “best practice” building strategies and sustainability‐oriented techniques and tools used to assess the energy performance of housing developments. The objective is to propose guidelines that can integrate futures thinking into the selection of energy‐related design responses, such as materials, building components and energy systems, from the early project stages.Design/methodology/approach – An interdisciplinary approach is adopted with the inclusion of social, economic and environmental aspects of the energy supply and demand. A multiple case study approach is employed, which focuses on the residential sector of European mixed‐use developments that represent sustainable communities of “best practice”.Findings – The investigation of “best practice” housing developments reveals that the majority of design responses cover mainstream environmental design strategies. Energy efficiency measures are still the “low hanging fruit” towards meeting the sustain...

Transportation corridors and cointegration of residential natural gas prices

Abstract: Purpose – The US natural gas industry has gone through regulatory changes and consequently restructuring over the last 40 years, in an effort to be more market driven. The purpose of this paper is to present an economic analysis of price cointegration in the US natural gas industry as a result of industry restructuring.Design/methodology/approach – In particular, this paper tests if access to the same major pipeline transportation corridor translates to cointegration of residential natural gas prices.Findings – Results indicate a high degree of cointegration for States within the same transportation corridor and a greater percentage of State residential prices are cointegrated post the period of full wellhead deregulation (post 1993) versus the transitional period (1989‐1992). In fact, within the Southwest to Southeast transportation corridor, 100 percent of the price‐pairs examined were cointegrated.Originality/value – The paper shows that the combination open access as a result of restructuring, complem...

Interventions for mitigating indoor‐air pollution in Nigeria: a cost‐benefit analysis

Abstract: Purpose – The purpose of this paper is to evaluate the costs and benefits of interventions to reduce indoor‐air pollution arising from the use of solid biomass fuels for cooking and heating in Nigeria.Design/methodology/approach – The authors use cost‐benefit analysis and assess two intervention scenarios: providing access to improved stoves; and providing access to cleaner fuels (liquefied petroleum gas – LPG – burners). Both intervention scenarios are compared with the current situation, i.e. the “business as usual” scenario where there is no attempt to reduce the present level of exposure to indoor‐air pollution from solid fuel use.Findings – The result shows that the cost‐benefit ratio of the stove intervention is 0.388 while that of LPG is 0.371.Practical implications – While providing access to cleaner fuels (LPG) has a larger health impact on the population than improved stoves, the low income level of the participants will favor the stove option because of the lower recurrent cost which is usually...

Evaluation of renewable energy options for cooling applications

Abstract: Purpose – The purpose of this paper is to assess renewable energy‐based cooling technologies using multi‐criteria methodology.Design/methodology/approach – Analytic hierarchy process (AHP) methodology is applied to obtain the ranking of renewable energy options for cooling technology using five different criteria. In total, seven technologies were analyzed, based on the opinions obtained from experts and the extensive literature survey made and the ranking was obtained using AHP method.Findings – The present findings revealed that the ranking for the renewable energy‐based cooling technologies were in the following order: biomass combustion, biogas, trigeneration, SPV, biomass gasifier, solar thermal storage, and hybrid technology. Only 5 per cent variation in global priority exists among top three options. This variation is considered insignificant due to rapidly varying factors such as technological advancements, government promotional schemes, fuel availability, etc. and hence these three options may b...

A methodology for evaluating energy efficient office refurbishments as life cycle investments

Abstract: Purpose – The purpose of this paper is to present a methodology to improve decision making about investments that reduce buildings' energy consumption.Design/methodology/approach – A three‐stage methodology was developed and tested to analyse an existing Australian office building's energy use, its energy rating, and its life cycle investment. In total, seven cases of sets of improvements were modelled for energy performance. Their investment value was evaluated using a life cycle‐based analysis across several investment options.Findings – A holistic approach to investment shows that the most effective sustainable refurbishments need not be the most expensive. Optimised investment can take advantage of the timing of both re‐investment in component renewal and efficiency gains from the refurbishment. Furthermore, relatively small changes in income can offset capital expenditure for refurbishments and protect against obsolescence.Originality/value – Much work on sustainable refurbishments rarely considers t...

Non‐convex economic thermal power management with transmission loss and environmental factors: Exploration from direct search method

Abstract: Purpose – The purpose of this paper is to solve the optimal power dispatch problem of thermal generating units with cubic fuel cost and emission functions.Design/methodology/approach – The proposed Simplified Direct Search Method (SDSM) is developed from the Direct Search Method (DSM) that is a prevailing method for solving economic dispatch (ED) problems. The SDSM performs a direct search on solution space that starts with the minimum generation limits and provides the most economical schedule in a single execution for all load demands that the system can meet.Findings – A simple methodology is developed to obtain the optimal dispatches of the generators in a thermal power plant. The results of the proposed methodology illustrate improvements in the savings of total cost and marginal reduction in transmission loss. It is also suitable for solving environmental constrained power dispatch problems. The proposed approach is computationally efficient for large‐scale systems.Originality/value – A simple metho...

Technology/infrastructure diffusion of natural gas vehicles: the case of Shanghai

Abstract: Purpose – Diffusion of a new technology and its required infrastructure is a complex process involving various adaptive decision makers interacting with each other, and this is extremely true in diffusion of alternative fuel vehicles. The purpose of this paper is to explore the dynamics of alternative fuel vehicles/infrastructure diffusion through a case study about the diffusion of NGVs (natural gas vehicles) in Shanghai, China.Design/methodology/approach – This paper first provides a case study of the adoption of NGVs in Shanghai; then the major infrastructure and economic indicators, obstacles in the market penetration process are analyzed. Finally, an agent‐based model is established to simulate the diffusion of NGVs in Shanghai.Findings – The findings show that several factors limited the adoption of NGV in Shanghai. The initial distribution of refueling stations can be critical to determining whether the technology/infrastructure system survives to become mature and successful. Therefore, the strong...

Customers' value appraisals‐suppliers' value propositions interaction process in developing new services: A case study from the natural gas industry

Abstract: Purpose – Research on customer value in business markets is still at an early stage. More specifically, business marketing literature is largely silent on how customers' value expectations interact with suppliers' value propositions and how the interaction leads to development of new products and services. The purpose of this paper is to explore this interaction process and map the journey of the development of a new service and a new relationship.Design/methodology/approach – Following a case study approach, data were collected from representatives of supplier firm – GASCO, and the buyers in CERACO, through in‐depth interviews. In total, 21 ceramic manufacturers (customers) were also visited who represent CERACO. Semi‐structured interviews were conducted with few key representatives of ceramic manufacturers, equipment supplier representatives, and GASCO representatives. Also interviewed were two vendors of GASCO and a representative of the gas pipeline (infrastructure) company close to GASCO. Themes were...

Knowledge is power: Knowledge‐capital model in the management of power intensive industries

Abstract: Purpose – The purpose of this paper is to seek a clearer understanding of how firms involved in power intensive industries participate in foreign direct investment. The paper asks the following questions: how skilled are the employees available for hire? What kind of pollution restrictions will be applied to the plant? Is the infrastructure in place to enable free transport of the necessary materials? All of these are factors that can be analyzed on a national level, and are major factors in government policy. Design/methodology/approach – The research is designated to explain how macro policy can be directed towards firms in the power intensive industry, to impact the competitiveness within the industry. Skilled labor differences is reflecting governmental policy in its willingness to contribute to education. Infrastructure can be viewed as an indicator for long‐term policy planning by the government. The pollution variable reflects on macro policy emphasis by governments, by presenting their emission targets. Investment cost variable gives indication of government policy concerning the ease with which foreign investors can enter into and invest in a particular country. The case country is Iceland, an isolated island that is unable to export its abundance directly and therefore must do so through foreign direct investment. Findings – The findings indicate that source countries are attracted by the level of skill in Iceland at the beginning stage of operations when faced with fixed threshold cost. Once the plants have overcome fixed costs, there are positive impacts on marginal investment, the more skilled the source country is compared to the host. Other factors that proved to be important in this case study are distance, infrastructure, government stability, pollution quotas, and the fishing resource. Originality/value – The relative friendliness a country's policies display towards an industry can make a huge difference when it comes to how successful a business can be, so studying these national‐level policies can help an individual determine what kind of direction to take on the day‐to‐day operational decisions.

The biofuel bubble in northern Sweden and Finland

Abstract: Purpose – The purpose of this paper is to offer a critique of government intervention in the production of biofuel in northern Sweden and Finland, highlighting some of the welfare consequences.Design/methodology/approach – After a short review of government interventions, including laws, taxes and subsidies, Austrian economic principles are applied, which lead to universal statements about the impacts of government intervention.Findings – Government intervention on behalf of the biofuel production industry leads to the emergence of an investment bubble, with consequential negative impacts on welfare.Practical implications – The paper informs about the true costs of intervention in biofuel production, which suggests that policy makers may abstain from justifying interventions for the sake of increasing people's welfare.Originality/value – The paper contributes to the research of the production impacts of a new energy technology in the form of biofuel in particular and of governmental intervention in produc...

Biogenic carbon emissions of integrated ethanol production

Abstract: Purpose – The purpose of this paper is to present greenhouse gas study results for biofuels produced with partial qualified utilisation of pulp wood or forest residues when integrated into kraft pulp mill systems. The impact of considering biogenic carbon on the results is also presented.Design/methodology/approach – The material and energy balances of the integrated ethanol production were simulated for the study with a mill‐wide simulation model. Data for the simulation were obtained from prehydrolysis and cooking experiments. The life cycle model for greenhouse gas calculation was created based on the simulation results. In this paper, the change of forest carbon stock caused by residue removal from forest soil and carbon delay of forest growth after stand felling were also taken into consideration, to discuss the true greenhouse gas emissions of forest biomass utilisation.Findings – The emission reduction levels achieved with these ethanol fuels derived from forest biomass ranged from 80 to 90 per cen...

Design of power purchase under transmission congestion

Abstract: Purpose – The non‐storable nature of electricity and the increasing complexity of financial instruments as a tool for hedging against risk make the area of research very useful in the real world. Many power portfolio optimization problems have been developed to combat the issue of risk tolerance, but very few (if any) have included transmission constraints. The purpose of this paper is to consider optimization of portfolios of real and contractual assets, including derivative instruments, in a multi‐period setting where transmission constraints also exist.Design/methodology/approach – Rather than using a flowgate constraint as a representation of transmission congestion, the authors use fixed transmission rights. A model is introduced that involves a three‐node unidirectional network in order to evaluate the significance of transmission constraints. Data from the PJM, which is located in the eastern USA, were used for model implementation.Findings – The stochastic nonlinear mixed‐integer model presented s...

Cabling renovation concept in large‐scale renovation of rural area networks

Abstract: Purpose – Underground cabling has become a true alternative in construction of electricity distribution networks, even in rural areas. The increasing amount of underground installations requires strategic work that helps to define the most profitable cabling targets. The purpose of this paper is to introduce a methodology to consider the underground cabling process.Design/methodology/approach – The paper proposes a cabling concept that covers the issues on how cabling should be carried out. The analysis is based on techno‐economic and reliability analyses. The methodology consists of several steps that together constitute the concept.Findings – The underground cabling concept comprises several steps that can be simplified into questions: where, what, when and how the network cabling process is carried out. The analysis of these questions and the related features of the network show that different approaches to the renovation can cause significant differences in profitability between the renovation strateg...

Consolidation and communication in European energy markets

Abstract: Purpose – A substantial minority of bidding firms disclose synergy forecasts during mergers and acquisitions (M&A). Using these hand‐collected synergy announcements, the purpose of this paper is to investigate synergy characteristics as well as explore their shareholder wealth effects within the European energy sector between 1998 and 2010.Design/methodology/approach – The authors employ the market model event study methodology to infer short‐term wealth implications as well as the Fama French 3 Factor model to estimate long‐term effects.Findings – The paper provides evidence for a positive correlation between the synergy size and combined bidder and target returns. However, the market discounts disclosed synergies to a degree which reveals that managers in the energy sector are likely to overestimate the actual, realizable size of the emerging synergies. Additionally, the results show that post merger long‐term returns of synergy disclosing firms remain significantly positive, indicating that projected s...

Evolutionary neural networks for strategic bidding in electricity markets

Abstract: Purpose – The purpose of this paper is to introduce a neural network‐based market agent, which develops optimal bidding strategies for a power generating company (Genco) in a day‐ahead electricity market.Design/methodology/approach – The problem of finding optimal bidding strategy for a Genco is formulated as a two‐level optimization problem. At the top level, the Genco aims at maximizing its total daily profit, and at the bottom level, the independent system operator obtains the power dispatch quantity for each market participant with the objective of maximizing the social welfare. The neural network is trained using a particle swarm optimization (PSO) algorithm with the objective of maximizing daily profit for the Genco.Findings – The effectiveness of the proposed approach is established through several case studies on the benchmark IEEE 30‐bus test system for the day‐ahead market, with an hourly clearing mechanism and dynamically changing demand profile. Both block bidding and linear supply function bi...

Insularity and sustainable transport: Challenges and perspectives – Reunion Island, a case in point

Abstract: Purpose – The aim of this paper is to propose answers to such questions as: are major road projects currently implemented on Reunion Island sufficient to conclusively solve the problems of traffic congestion and urban sprawl? What coercive measures are to be implemented by local authorities for post‐project period management? Which option should be chosen: congestion charges and regulations, or access rights and permits?Design/methodology/approach – This paper is in four parts. First, the paper explains the various constraints to be overcome in road infrastructure and land development. Then the main characteristics of road transport are described. Third, the characteristics, cost and expected role are presented. Last, the various solutions are compared.Findings – Developing road infrastructures may appear as a solution to the congestion problem. Therefore, only quality public transport development and incentive measures to control traffic can reduce road congestion in the long run – provided the alternati...