CEEPR Working Paper
2022-006, March 2022

Abdullah Alawad, Pablo Dueñas, Ahmad Alabdulkareem, and Carlos Batlle

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.

Further Reading: CEEPR WP 2022-006

About The Authors

Pablo Dueñas-Martinez is a Research Scientist at the MIT Energy Initiative, Professor at Universidad Pontificia Comillas and Gas-Electricity Advisor at the Florence School of Regulation. He has focused on topics such as liberalization and regulation of gas and electricity markets, energy security of supply and resiliency in decarbonizing economies, impact of distributed energy resources, analysis and regulation for universal energy access, and mathematical modeling of energy systems. During his career, he has worked with power and gas utilities, as well as government and regulatory agencies, on research projects and to provide advice aimed at improving operations and investments in energy systems worldwide.

Carlos Batlle is a member of the MIT Energy Initiative since 2011, where he has been leading research projects and supervising PhD and master dissertations. He teaches the course entitled “Engineering, Economics and Regulation of the Electric Power Sector”. He is also part-time at the Florence School of Regulation (FSR) at the European University Institute (EUI) and Associate Professor at Comillas Pontifical University in Madrid, and member of the Advisory Academic Panel of Ofgem, the UK energy National Regulatory Authority. He has rendered consulting services for governments, international institutions, industrial associations, and utilities in over 30 countries. He has published over 40 papers in national and international journals and conference proceedings and authored 10 book chapters.