Conference Agenda

The need to incorporate renewable energy raises challenges in the efficiency and reliability of the electricity market. In this paper, we focus on the two challenges facing the incorporation of renewable energy in the wholesale electricity market: the intermittency of renewables and the transmission constraints between regions. We first demonstrate the complementarity property of battery storage and transmission infrastructure improvements that address these two margins in improving economic efficiency. Using market data from ERCOT, we estimate a simple electricity market model to recover unobserved market fundamentals such as transmission constraints to quantify their marginal benefits and complementarities. Our findings reveal that both reducing renewable intermittency and expanding transmission capacity significantly decrease operating costs, with a more pronounced effect observed in the former. Most importantly, we find the economic significance on the interaction of the two. The policy experiment suggests an increase in the marginal benefits of improvements in transmission capacity when battery storage reduces the problem of renewable intermittency, highlighting the importance of simultaneous investment in storage and transmission for effective implementation of energy policy.

Energy security has emerged as a critical issue, especially for Europe,

driven by escalating geopolitical tensions and the transition toward sustainable energy

sources. Beyond affecting national energy supply, energy security also significantly

influences the affordability of electricity for consumers. We examine the impact

of energy security on household electricity prices, focusing on three key indicators:

energy dependency, energy diversity, and geopolitical risk. Using panel data of 27

EU countries from 2007 to 2022, the analysis reveals that both energy diversity and

dependency contribute to lowering electricity prices, while geopolitical risk shows

no significant direct effect. However, the interaction between energy dependency

and geopolitical risk reveals that during times of heightened geopolitical risks, a

heavy reliance on foreign energy can lead to significantly higher electricity prices.

The results further indicate that rising electricity prices significantly drive energy

poverty across EU households, although higher household incomes and government

social benefits help mitigate this effect. These findings offer valuable insights for

policymakers focused on enhancing energy security.

Since 2010, the Uruguayan government has fostered the installation of solar panels among firms to promote the production of small-scale renewable electricity. Under this policy, firms that have installed solar panels are allowed to feed any electricity surplus into the grid. Using a novel dataset on firm-level electricity consumption and grid feed-in, we study the economic and environmental consequences of this policy. First, we find that installing a solar panel substantially reduces the amount of electricity extracted from the grid. Second, we find that it increases the electricity injected into the grid. Third, we find that it reduces CO2 emissions only marginally. Fourth, we provide evidence of a rebound effect: electricity consumption increases between 20% and 26% after the solar panel installation. Lastly, we propose an alternative policy that allows firms to store their electricity surplus in batteries instead of immediately injecting it into the grid. This policy would further reduce CO2 emissions by 2.7%, allowing electricity injection into the grid at night when fossil fuel facilities satisfy most of the electricity demand. We use firm-level data to study the effects of a net-metering policy, showing what countries can expect from implementing such a policy.

Green hydrogen is emerging as a crucial component in the global energy transition, with Türkiye's varied geography and climatic conditions providing a unique context for its production. However, existing Life Cycle Assessment (LCA) and Life Cycle Cost Assessment (LCCA) studies on hydrogen production often overlook regional variations by assuming static renewable energy capacity factors across different locations. This study addresses this limitation by evaluating the environmental and economic aspects of green hydrogen production across 120 distinct grid cells (1° x 1° resolution) in Türkiye, using PV and wind energy to power a 10 MW PEM electrolyzer system. To enhance spatial and climate-specific accuracy, Global Climate Models (GCMs) are integrated to simulate the impact of three climate scenarios (SSP5-8.5, SSP3-7.0, SSP2-4.5) on renewable energy output and hydrogen production viability. The findings reveal significant regional variations in environmental impact and production costs, with coastal areas like the Aegean and Black Sea regions showing lower emissions and costs due to favourable renewable energy conditions. Conversely, central and northern areas face higher production challenges and costs, underscoring the need for region-specific strategies. Policy analysis highlights that incentives like Production Tax Credits (PTC) and Investment Tax Credits (ITC) greatly enhance the economic feasibility of hydrogen production, recommending a tailored mix of policies to attract investment. This study’s high-resolution, climate-informed model underscores Türkiye's potential as a leader in renewable hydrogen, providing a strategic framework for optimizing hydrogen production aligned with global low-carbon goals.