September 29th, 2:30-4pm, E62-346

Holding Up Green Energy: Counterparty Risk in the Indian Solar Power Market

Speaker: Nick Ryan (Yale)

Seminar title: “Holding Up Green Energy: Counterparty Risk in the Indian Solar Power Market”

Date/Time: September 29th, 2:30-4pm EST

Location: E62-346

Abstract: This paper studies how the risk of hold-up affects procurement. I use data on the universe of solar power auctions in India. The Indian context allows clean estimates of counterparty risk, because solar plants set up in the same states, by the same firms, are procured in auctions intermediated by either risky states themselves or the trusted central government. I find that the counterparty risk of an average state increases solar prices by 10%. This risk premium sharply reduces investment, because demand for green energy is elastic. Contract intermediation by the central government eliminates the counterparty risk premium.

Download Seminar Working Paper


Nicholas Ryan

Yale University


Nicholas Ryan studies energy markets and environmental regulation in developing countries. Energy use enables high standards of living but rapid, energy-intensive growth has caused many environmental problems in turn. Nick’s research measures how energy use and pollution emissions respond to regulation and market incentives. His work includes empirical studies of the effect of power grid capacity on electricity prices, how firms make decisions about energy-efficiency and how environmental regulation can be designed to best abate pollution at low social cost.

Nick is joining Yale University as a Cowles Foundation Fellow for 2014-15 and an Assistant Professor of Economics from 2015 onwards. He has been a Prize Fellow in Economics at Harvard University from 2012-2014. He received a PhD in Economics from the Massachusetts Institute of Technology in 2012 and a BA in Economics summa cum laude from the University of Pennsylvania. He previously worked as a Research Associate in the Capital Markets group at the Federal Reserve Board of Governors in Washington, DC.