Conference Agenda

While battery electric vehicles (BEVs) play a key role for decarbonizing the transport sector, their impact on the power sector heavily depends on their charging strategies. Here we systematically analyze various combinations between inflexible, smart and bidirectional (or vehicle-to-grid, V2G) charging of 15 million electric cars in Germany. Using a capacity expansion model, we find that even a moderate share of bidirectional charging below 30% leads to lower system costs than a fully smartly charging BEV fleet. At a V2G share of 50%, costs are even lower than in a system without any BEVs. This means that the flexibility effect of half of the BEV fleet charging bidirectionally outweighs the demand effect of the whole BEV fleet. We show how costs savings are driven by the ability of V2G to serve demand, especially during hours with high residual load. We also explore the distributional effects of respective electricity price changes. While V2G car owners internalize a substantial share of overall cost savings, the benefits increasingly spill over to other electricity consumers as the share of bidirectional charging grows. We conclude that policymakers should focus on enabling a moderate fleet share of V2G rather than on enabling every car to charge smartly.

Intermittency of generation is a well known challenge associated with renewable

energy. This paper examines interactions between renewable energy and hydroelectric generation in electricity systems with substantial hydro resources. Many hydro systems have significant energy storage capability. This energy storage may be used to modulate renewable intermittency and reduce the cost of wind integration. Our analysis extends the analysis of Gowrisankaran et al. [2016] and Butters et al. [2024] to a dynamic setting that allows for hydro power. We estimate a seemingly unrelated regression model for weather and use its forecasts and error distributions to understand optimal hydroelectricity usage in high-renewable settings. We apply the analysis to the Finland electricity market, a market with substantial hydro resources, and run counterfactual experiments with increases in wind and hydro capacity. We find that the cost of CO2 emissions reduction via wind expansion is quite low for a 50% wind capacity expansion, but rises sharply for an additional 50% wind capacity expansion. We also report on counterfactuals in which the size of the hydro system is re-scaled up and down. We find complementarity between wind and hydro for the first increment of wind expansion. Hydro storage capabilities enhance the marginal value of wind in this case. However, optimized hydro power usage behaves like a competitor to wind power as wind power capacity is further increased, so that wind and hydro act as substitutes. Hydro power has a context dependent role as a complement or a substitute for other renewable energy

resources.

The rapid expansion of residential photovoltaic (PV) installations is a central pillar of the transition toward a renewable energy production. However, increasing PV penetration is beginning to create congestion in low-voltage distribution grids, risking damage to network components, production losses and constraints on further PV deployment. Using a newly developed spatial expansion model for a Swiss subregion, this paper quantifies the timing and magnitude of grid-related losses in the near future. The results further illustrate how a small adjustment to existing subsidy schemes can delay binding grid constraints by one to two years and reduce congestion-related losses by up to 6.02 percent. While such a subsidy design does not represent a first-best economic solution, it offers a practical and readily implementable approach, addressing the coordination challenges associated with decentralized residential PV adoption.

This study investigates the impact of the initial coverage of Environmental, Social, and

Governance (ESG) score on the environmental performance of power-generating firms. Using a firm-level dataset from S&P Global and a staggered difference-in-differences method, we examine whether the ESG rating coverage affects greenhouse gas (GHG) emission intensity across firms with different technology portfolios. Our results reveal a stark divergence: while fossil-only firms achieve significant reductions in GHG intensity, mixed firms—those operating both fossil and renewable assets—increase their emission intensity after ESG coverage, primarily due to a reduction in renewable generation. Further analysis points to financial constraints as a key mechanism: firms with lower initial ESG scores or a higher level of fossil dependency may face tighter financing conditions induced by ESG coverage, and thereby sacrifice renewable production. We also show that renewable-only firms exhibit no evident contraction in renewable output, alleviating concerns that our results are driven by a common shock to the renewable sector. We find no evidence that ESG rating coverage spurs innovation. These findings underscore the limitations of uniform ESG schemes and highlight the need for more targeted approaches that address firm-specific attributes.