Designing Second-Best Price Zones in Electricity Markets
Electricity consumers across North America pay prices based on broad geographic zones whose boundaries were drawn up to three decades ago. As the grid is transformed by renewable energy and new large loads, these legacy zones are an increasingly poor fit for real network conditions. In this paper, we develop a framework to measure this misalignment and identify better zone configurations.
Smart Meters, Dumb Prices
Electricity tariffs were designed for an earlier power system: one with electromechanical meters, one-way power flows, limited customer-side generation, and relatively weak substitutes for grid electricity. That world is changing. A new commentary by Christopher Knittel focuses primarily on retail tariff design in the United States, and explains why that tariff structure is becoming increasingly inefficient, regressive, and outdated.
Recognizing Third-Country Carbon Prices Under the European CBAM
How the CBAM recognizes carbon prices paid abroad will shape its effectiveness as a safeguard against emissions leakage and catalyst for carbon pricing abroad. At the same time, enabling trade partners to retain revenues domestically by closing the price gap to CBAM certificate prices is politically, legally, and normatively desirable. Targeted options such as recapturing compensation, top-up credit purchases, and additional allowance or tax payments allow doing so.
A Regulatory–Financial Framework to Achieve Universal Access
Least-cost electrification plans have become more sophisticated. Yet many still fail at the moment that matters: implementation. The binding constraint is rarely the engineering logic of grid extension versus decentralized supply. It is the regulation and cash-flow logic of who is obligated to serve, how revenues are recovered under affordability constraints, and how early investment is financed before demand and collections mature. This working paper proposes an integrated regulatory–financial framework.
How Uncertainty Shapes Electricity Storage Decisions
How should batteries be dispatched and recharged in the face of uncertainty about the future inflow of renewable energy? How much charge should be held in precaution against the danger of a drought of renewable inflows? In a new Working Paper, the researchers solve for the optimal operating strategy in a model of stochastic renewable inflows. A key parameter of the model determines the likelihood and duration of renewable energy droughts, and they show how the optimal strategy varies with this parameter.
How Data Centers Can Better Manage Energy Use
The number of U.S. data centers is growing, largely to power artificial intelligence programs. That has led to concern about the environmental consequences of data centers — and their impact on the energy grid itself. What will happen if scores of new data centers come online? A new study by MIT CEEPR researchers indicates that the impact of data centers could vary significantly, depending on how their energy use is structured. “The key with data centers is: How can we add them to the network without adding a lot to our peak usage?” says Christopher Knittel. Check out the full article on MIT News.
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High Gas Costs May Linger After U.S.-Iran Deal
There are two reasons that gas prices could linger on the higher end, said Christopher Knittel, Associate Dean for Climate and Sustainability, in an article in the New York Times. One is the large amount of infrastructure in the Middle East that has been damaged or destroyed. The second is the uncertainty about whether sailing through the Strait of Hormuz is safe. "Basic economics tells us the riskier business is, the higher profits you have to earn to want to enter into that business," Knittel said. "Oil, gasoline, and natural gas have gotten more risky. That might actually keep us from ever getting back to prewar levels for gasoline," he added.
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How Climate Change is Making Your Life More Expensive
A CEEPR paper by associate dean for climate and sustainability Christopher Knittel, professor Catherine Wolfram, and co-author found that climate change is already costing U.S. households between $400 and $900 a year, on average. "Even if you don't live in tornado alley, you might be seeing your insurance rates go up to cover the cost for people who are in the more danger-prone areas," said Wolfram. Read more in this article on TIME Magazine.
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Electricity Price Hub
The Electricity Price Hub is a partnership between Heatmap News and MIT CEEPR in collaboration with CleanEcon designed to bring much-needed clarity to the conversation around energy affordability. It is a new public data platform built to address this information gap. The hub provides month-to-month estimates of residential electricity prices and bills for utilities across the United States, from 2020 to the present. For the largest utilities, these estimates are broken down into their core components. By making this data available down to the zip code level, the hub empowers users to understand what they are paying and see how that compares to neighboring communities and states.
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Clean Investment
Monitor
The Clean Investment Monitor (CIM) is a joint project of the MIT Center for Energy and Environmental Policy Research (CEEPR) and the Rhodium Group. The CIM tracks public and private investments in climate technologies in the United States. Through this data and analysis, the CIM provides insights into investment trends, the effects of federal and state policies, and on-the-ground progress in the U.S. towards net-zero greenhouse gas emissions.
The CIM covers dozens of different technologies and their input components across all sectors of the economy, including for clean electricity and transportation, building electrification, low-emission industrial production, and carbon management.
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Climate Action
Through Education
The MIT Climate Action Through Education (CATE) program, directed by Professor Christopher R. Knittel, has developed an MIT-informed interdisciplinary, place-based climate change curriculum for U.S. high school teachers in the following core disciplines: History/Social Science, English/Language Arts, Math, and Science.
Curricular materials – labs, units, lessons, projects – will be aligned with Next Generation Science Standards, and MA education standards. The solutions-focused curriculum aims to 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, adaptation and resilience.
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Driving Towards
Seamless Public
EV Charging
Widespread electric vehicle (EV) adoption is critical to confronting climate change – but a lack of sufficient public charging infrastructure is holding many potential EV drivers back. A team of researchers from Harvard and the MIT Center for Energy and Environmental Policy Research will work to accelerate progress on public EV charging as a gating requirement to achieving widespread EV adoption. The team will contribute by working directly with stakeholders and stakeholder groups to identify barriers to seamless public EV charging, build consensus for solutions, and advance those solutions.
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The Roosevelt
Project
Transitioning the United States economy toward deep decarbonization will have unequally distributed effects, positive and negative, across socio-economic groups, geographies and economic sectors. The concerns of workers and communities adversely affected by the transition must inform the discussion around decarbonization, associated policy changes and institutional development. The goal of the Roosevelt Project is to provide an analytical basis for charting a path to a low carbon economy in a way that promotes high quality job growth, minimizes worker and community dislocation, and harnesses the benefits of energy technologies for regional economic development.
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