We report on a randomized controlled trial used to examine the effect of dynamic pricing when applied to households with rooftop photovoltaic (PV) power-generation systems. Using high-frequency data on household-level electricity use, PV generation, purchases, and sales, we find that critical peak pricing induced significant usage reductions of 3-4% among households with PV systems, a…
Energy Markets Under Stress: Some Reflections on Lessons From the 2021–2023 Energy Price Crisis in Europe
This paper examines the 2021–2023 energy crisis in Europe exacerbated by the energy consequences of the full-scale Russia—Ukraine war which began in February 2022. We show that this was an historically unprecedented price shock to both gas and electricity prices. We then draw on lessons from UK energy policy in World War Two to inform…
Electric Vehicles are Good, Actually
Electric vehicles are the primary alternative to transportation based on internal combustion engines and the most promising route to decarbonization of light- and medium-duty transportation systems. A transition to electric vehicles does face important challenges in terms of scaling of battery production, charging infrastructure, and grid coordination, which may make aggressive EV targets difficult to…
How Should We Think About Pricing Electricity in the Context of Potential Life-Threatening Weather Events?
This paper argues that in markets characterized by highly inelastic demand, such as markets for electricity, market-clearing can force some individuals—particularly those with limited financial resources—out of the market, subsequently exposing them to significant risk. In the particular case of abnormally cold temperatures, as with the Texas deep freeze, or particularly hot temperatures, as may…
Book Reviews
Winter Ends
There is a common assumption that all-electric automobiles, powered by lithium-ion batteries, are the future of vehicle transportation. It is argued here that this is not the likely outcome, especially in the less-developed countries. Use of photovoltaic (PV) cells, in conjunction with gasoline or hydrogen-hybrids, will be less expensive, and more likely to be adopted…
Issues in The Future of Ground Transportation
Enhancing the Reliability of Bulk Power Systems against the Threat of Extreme Weather: Lessons from the 2021 Texas Electricity Crisis
The February 2021 cold weather outages in Texas remain a subject of important investigation, and lessons learned from the crisis have broader relevance for bulk power systems around the world. This article focuses on the policy responses to what we view as the root causes of the extended blackouts: the insufficient preparation of electric generating…
Making Electricity Capacity Markets Resilient to Extreme Weather Events
The devastating 2021 blackout in Texas, among others, has highlighted the need to reform electricity markets to make them resilient to extreme weather events. We review related efforts by system planners and operators within electricity market contexts, focusing on Europe and the United States, and we analyze possible reforms to electricity capacity markets. To account…