Conference Agenda

The global energy transition is an irreversible trend, however, its progress has been hindered by technical, environmental, energy efficiency challenges, as well as economic and social challenges. The approach that promotes decentralization by empowering households to adopt distributed energy resource solutions helps mitigate the high capital costs associated with large-scale projects, yet it raises concerns about equity and a just energy transition. For energy transition to be inclusive and subsidies do not disproportionately benefit wealthier households, understanding the determinants of energy transition in the residential power sector thus provides a valuable lesson to guide sustainable governance and facilitate the transition to electricity systems that are both efficient and equitable. In Vietnam, despite significant advancements in the generation and accessibility of national grid electricity, the monopolistic structure of country’s electricity market constrains supply-side access. Households accept residential tariffs, reliability, and the power mix determined by the state-owned Vietnam Electricity with limited ability to bargain for the competitive price or improved service. Given the high ratio of electricity consumption relative to average national income per capita, Vietnamese households staying reliant on conventional grid electricity exposes them to further financial strain due to rising costs associated with conventional power generation. In this study, we examine just energy transition in Vietnam by analyzing how distributional justice, reflected in the adoption and demand for residential solar electricity, is predicted by perceived affordability and reliability of grid electricity and socioeconomic differences among households. In addition to contributing to the considerably growing economic literature on the development of distributed energy resources in emerging economies, this study provides evidence-based insights for policy by investigating two critical research questions. Our contributions highlight two findings that have remained little explored in studies on transition to renewable energy in the residential sector. First, for households unlikely to adopt residential solar power technology, policy must (i) address potential disparities in electricity access across different household groups, and (ii) enhance the quality of service for those reliant on grid electricity. Second, for households willing to adopt residential solar power technology, policy design should ensure that consumption of residential solar electricity should be encouraged and households adopting solar technology should not be adversely affected by disparities in policies targeting utility-scale solar projects.

Unplanned and frequent power blackouts are critical factors that hinder the productivity and growth of all types of firms in developing countries. Enterprises and households invest in fossil fuel-powered backup generators to cope with frequent power interruptions. We use exogenous variation in the frequency of electricity interruption in a geographical regression discontinuity setup in Lagos state (Nigeria) and identify the impact of power interruption on the use of backup generators, fossil fuel consumption, and emission of greenhouse gases by micro and small enterprises. We find that enterprises with unstable electricity supply are 19% more likely to own a backup generator, consume 35% more fossil fuel, and pay 117% more for fuel. We estimate that enterprises with unstable electric supply emit about 2.3 tonnes of CO2/ year. However, we show that because of their high upfront cost and inattention to the cost savings by firm owners, willingness-to-pay (WTP) for solar home systems is substantially lower than for fossil fuel-powered generators. Our back-in-the-envelope calculation shows that micro and small firms can avert about 12.8 million tonnes of CO2 worth USD 2.4 Billion each year through the transition to solar technologies. Our findings have significant implications for green growth policies and the role of governments and other stakeholders in facilitating the transition to and investment in clean energy sources.

Aligning economic pathways with a 2°C climate target implies rapid decarbonisation and a substantial increase in renewable energy (RE) investment and deployment. The financial system plays a key role in mobilising these investments, thereby enabling an orderly transition. To support these efforts and address related climate risks, financial regulators and central banks increasingly adopted green financial and monetary policies (GFMP). However, empirical evidence on the effectiveness of GFMP in promoting a smooth transition remains scarce. This paper sheds light on the impacts of GFMP on RE capacity additions, a key transition indicator. I construct a country-level GFMP index capturing the flow and stock of policy intensity and mix across 26 countries for the years 2000 to 2023. Leveraging this index, I deploy two-way fixed effects and quantile panel regressions to quantify aggregate and policy type-specific impacts, and estimate heterogeneous conditional effects across the distribution. Results show a positive relationship between GFMP intensity and RE capacity additions. On average, each adopted GFMP is associated with an addition of 1.12 gigawatt RE capacity over the long-term, corresponding to 2 Mt CO2 emissions avoided annually when displacing fossil energy sources. Distinguishing by policy type, I find positive effects for incentive-based instruments such as credit allocation rules, but not for informational instruments such as climate stress testing. The size of effect shows high heterogeneity, suggesting that countries with relatively more mature RE markets experience larger benefits from adopting GFMP. This study provides an early empirical quantification of the impact of GFMP on the low-carbon energy transition, and presents a GFMP index that can be deployed in future research. Findings hold important policy implications on the green transition.

How does electricity market integration affect cross-border electricity flows, wholesale prices and renewable electricity generation? We employ a synthetic control method to contribute to literature on electricity market integration using the 2018 integration of Ireland’s Single Electricity Market with the European market as an empirical case study. Results indicate a decrease in inefficient electricity flows between Ireland and Great Britain and an increase in the level of market integration with Great Britain. We find no effect on the average wholesale electricity price in Ireland, and this may reflect interconnector congestion. We also find no short-term increase in renewable generation.

The dual challenges of climate change and the transition to a low-carbon society profoundly affect household well-being, often exacerbating existing socio-economic disparities. Climate impacts such as extreme weather events and policy-driven increases in energy costs expose households to varied vulnerabilities depending on their financial and human capital, housing conditions, geographic location, and other factors. These disparities challenge the equity and political stability of the green transition, necessitating a framework for operationalizing the concept of a "just transition" that is both evidence-based and informed by principles of justice. This paper introduces a quantitative framework for assessing household vulnerability to climate change and the green transition, employing the IPCC’s definition of vulnerability as the interaction of exposure, sensitivity, and adaptive capacity. Building on the Foster-Greer-Thorbecke (FGT) indices originally designed for poverty measurement, the framework evaluates vulnerability along three dimensions: incidence (the proportion of vulnerable households), intensity (the severity of vulnerability), and inequality (the distribution of vulnerability). Using administrative microdata from nearly 7 million Dutch households, we use this framework to map vulnerability across energy, mobility, and environmental domains at an unprecedented level of detail. To demonstrate the framework's utility, we simulate the allocation of a hypothetical government investment of 1 billion euros under different justice principles—egalitarianism, sufficientarianism, and Rawlsian ethics—and analyze the impact on our vulnerability metrics. This simulation underscores the normative implications of policy choices, revealing trade-offs between reducing the number of vulnerable households, mitigating severe vulnerabilities, and addressing inequality among the most vulnerable. By aligning household-level data with ethical principles, this study advances the integration of normative justice principles into data-driven decision-making, to support a transition that leaves no one behind.

I provide a dynamic, stochastic central planner model of the optimal management of electricity storage at the grid level where wind electricity supply follows a realistic stochastic process in continuous time and is the main (or only) source of electricity. By choosing an infinite horizon discounted objective and a Markov process for wind electricity production, the optimal amount of electricity to be stored or unstored at any given point of time only depends on the current levels of storage and wind electricity production. The model parameters are estimated using German data on the onshore wind electricity production at the national level. Fixing an amount of installed wind electricity production that is able to meet electricity demand in Germany on average, the optimal policy for the management of storage is numerically determined. Based on the value function, the optimal level of storage capacity can be obtained.

The setting without any fossil backup sources is reminiscent of consumption-saving models under a borrowing constraint, with an additional upper bound on savings, thus showing how the introduction of an upper bound affects these models. The numerical results highlight the importance of demand elasticity for optimal storage capacity. While the optimal storage capacity and its cost seem high at a first glance, the levelized cost of electricity of wind electricity with battery storage at 2023 battery prices falls in the same order of magnitude as the cost of other technologies used for producing electricity. By introducing settings with a fossil fuel backup, it results that any fossil fuel backup decreases the optimal storage capacity. Moreover, the optimal storage capacity is increasing in the cost of producing a unit of electricity from fossil fuel. Finally, an inflexible fossil fuel backup increases the optimal storage capacity with respect to a flexible fossil fuel backup.