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Deregulation, Market Power, and Prices: Evidence from the Electricity Sector

A new Working Paper uses a detailed dataset on electricity transactions to investigate the impact of market-based deregulation in the context of the U.S. electricity sector. The introduction of market competition has an important tradeoff: market-based prices can provide incentives to allocate resources more efficiently and reduce costs, but the presence of market power may lead to increased prices for consumers.

Electricity Sector Policy Reforms to Support Efficient Decarbonization

Storage technologies, if efficiently deployed and utilized, can play an important role in maintaining system reliability and controlling system costs in the face of generation intermittency. A new Working Paper considers how alternative regulatory rules and policy regimes will affect the ability of storage to contribute to reliable, cost-effective, and equitable power system and economy-wide decarbonization.

Coping with National Fuel Subsidies in Regional Power Markets

Fuel subsidies for fossil generators persist in different electricity markets across five continents. In light of the current European energy crisis, this practice is regaining momentum, as may be the preferred emergency measure to limit the impact of high electricity prices on local demand. In a new Working Paper, the authors propose an innovative bidding format and a slight modification of the regional market clearing algorithm to mitigate a significant portion of the negative impact of the implementation of these subsidies.

Technology Neutral vs. Technology Specific Procurement

Auctions are increasingly being used to procure renewable energy capacity. How should these auctions be designed? Should regulators use a single technology-neutral auction, separate technology-specific auctions, or a hybrid design? And why or when should regulators resort to auctions instead of price posting? Since these choices involve a clear trade-off between efficiency and rent extraction, a new CEEPR Working Paper finds that one size does not fit all.

Power Price Crisis in the EU

Confronted with sustained high electricity prices, some Member States demand a deep reform of electricity markets in the EU. Conversely, other Member States ask to strictly respect the current market framework. In this paper, we review what the key EU institutions have publicly stated and what they are apparently considering, and we describe the concrete measures introduced or considered to date.

May 16, 2022

The Future of Energy Storage

The MIT Energy Initiative (MITEI) has just released a significant new research report, The Future of Energy Storage—the culmination of a three-year study exploring the long-term outlook and recommendations for energy storage technology and policy. The report discusses the role that energy storage can play in fighting climate change and in the global adoption of clean energy grids.

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May 2, 2022

Undergraduate Opportunity - Summer 2022

MIT CEEPR is seeking undergraduate students interested in a summer project on distributed impacts of climate and energy policy on U.S. jobs. If you are interested, please view the job post here.

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March 7, 2022

What Europe can learn from the 1970s oil crisis: Don’t fear high prices

In an article on Quartz.com, CEEPR Director Christopher Knittel discusses lessons learned from the 1970s and how it can apply today - the US experience being proof that rapid change is possible in the energy system when national security demands it.

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The Roosevelt Project

The Roosevelt Project takes a multidisciplinary approach to examine the transitional challenges associated with progress toward a deeply decarbonized U.S. economy. The project aims to chart a path forward through the transition that minimizes worker and community dislocations and enables at-risk communities to sustain employment levels by taking advantage of the economic opportunities present for regional economic development.

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The CATE Project

The Climate Action Through Education Project aims to develop a science-based climate curriculum for U.S high school students, placing particular emphasis on reaching populations who are underserved and on countering climate denial messages. The curriculum will inform students about the causes and consequences of anthropogenic climate change, while equipping them with the knowledge and sense of agency to contribute to climate mitigation and adaptation.

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The E2e Project

Through an interdisciplinary approach to the so-called ‘energy efficiency gap’, the E2e Project seeks to evaluate and strengthen policies and incentives for improved energy efficiency. Proven research designs used to achieve these aims include randomized controlled trials (RCTs) and quasi-experimental designs, with data and customer access provided through formal partnerships with private-sector companies.

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