ELECTRIC CHALLENGES - Current Tools and Policy Challenges in Electricity Markets Projects uri icon

researchers

  • FABRA PORTELA, NATALIA   Principal Researcher  
  • ., IMELDA   Researcher  
  • ANDRES CEREZO, DAVID JESUS   Researcher  
  • NOGUEIRA MEIRELLES DE SOUZA, MATEUS   Researcher  
  • GUTIERREZ PEREZ, SARA   Researcher  
  • LAMP, STEFAN ANDREAS   Researcher  

type

  • European Research Project

reference

  • GA-772331

date/time interval

  • January 1, 2018 - August 31, 2024

abstract

  • The fight against climate change is among Europe’s top policy priorities. In this research agenda, I propose to push out the
    frontier in the area of Energy and Environmental Economics by carrying out policy-relevant research on a pressing issue:
    how to design optimal regulatory and market-based solutions to achieve a least cost transition towards a low-carbon
    economy.
    The European experience provides unique natural experiments with which to test some of the most contentious issues that
    arise in the context of electricity markets, including the potential to change households’ demand patterns through dynamic
    pricing, the scope of renewables to mitigate market power and depress wholesale market prices, and the design and
    performance of the auctions for renewable support. While there is a body of policy work on these issues, it generally does
    not meet the required research standards.
    In this research, I will rely on cutting-edge theoretical, empirical, and simulation tools to disentangle these topics, while
    providing key economic insights that are relevant beyond electricity markets. On the theory front, I propose to develop new
    models that incorporate the intermittency of renewables to characterize optimal bidding as a key, broadly omitted ingredient
    in previous analysis. In turn, these models will provide a rigorous structure for the empirical and simulation analysis, which
    will rely both on traditional econometrics for casual inference as well as on state-of-the-art machine learning methods to
    construct counterfactual scenarios for policy analysis.
    While my focus is on energy and environmental issues, my research will also provide methodological contributions for other
    areas - particularly those related to policy design and policy evaluation. The conclusions of this research should prove
    valuable for academics, as well as to policy makers to assess the impact of environmental and energy policies and redefine
    them where necessary.

keywords

  • electricity markets, renewables, market power, auctions, empirical industrial organization; regulation