The analysis of the impact of remuneration schemes for renewable electricity, and solar photovoltaics (PV) in particular, on the effectiveness of renewable energy deployment and the total costs of support has received a considerable attention in the past. In contrast, the literature on the effects of deployment support on productive efficiency and, more specifically, on…
Do Almost Mature Renewable Energy Technologies Still Need Dedicated Support Towards 2030?
The discussion on whether and how to continue support for almost mature renewable electricity (RES-E) technologies, such as onshore wind and PV, has recently intensified. In this paper we analyze arguments in the literature in favor and against the phase-out of renewables support in the context of increasingly competitive RES-E technologies. We conclude that there…
Energy Market Integration and Electricity Trade
This paper explores energy trade in the electricity market by undertaking a comprehensive empirical analysis of the effect of Europe’s progressive Energy Market Integration (EMI). Its aim is to quantify the effect of EMI on electricity trade in Europe in order to derive corresponding evidenced- based policy implications. The empirical strategy employs standard goods trade…
The Role of Efficient Pricing in Enabling a Low-Carbon Electricity Sector
Producers and consumers will make the investments and innovations necessary to transition to a low carbon electricity supply industry only if they are compensated for their efforts. In the absence of explicit government support for these activities, this outcome will occur only if wholesale and retail prices provide this compensation. Efficient wholesale and retail pricing…
An ex-ante evaluation of the EU Energy Efficiency Directive – Article 7
The European Union’s Energy Efficiency Directive calls for EU Member States to put in place ambitious energy efficiency policies and requires them to establish energy saving targets. One of the most important Articles of the Directive is Article 7, which required Member States to implement Energy Efficiency Obligations and/or alternative policy instruments in order to…
Regulatory impact on Quality of Electricity Distribution Services: The case of Latin America and the Caribbean
In this study, we empirically estimate the impact of quality regulation based on economic incentives on the frequency and duration of power outages. First, based on a sample of 143 electricity distributors across Latin America and the Caribbean, we show that between 2003 and 2019, the System Average Interruption Duration Index (SAIDI) and the System…
Policy Reversals in Transitional Markets: The Effect of Changing Marginal Cost to Physical Order Dispatch in the Mexican Power Sector
This study explores the 2021 Mexican electric reform that proposes changing the power dispatch from a marginal-cost-based to a command-and-control physical system. The new law forces the state power company to dispatch before private generators. We use the GENeSYS-MOD techno-economic energy model to determine the reform’s effect on the power sector’s generation mix, energy emissions,…
Electricity Markets in Transition and Crisis: Balancing Efficiency, Equity, and Security
Two electricity market crises following the lifting of post-Covid restrictions in 2021 and the natural gas supply interruptions in 2022, challenged the functioning of the EU electricity market and its design. This paper argues that the market design was already ripe for an overhaul as the efficient market paradigm has gradually become an instrument of…
From Negative to Positive Carbon Pricing in Mexico
Coping with Uncertainties in the Electricity Sector – Methods for Decisions of Different Scope
Decision-making in the energy sector and notably the power industry has to cope with multiple uncertain factors such as renewable forecasts, technology developments or demand growth. At the same time, multiple methods are available to support decision-making under uncertainty. The focus of the present review is to identify the merits of different optimization modelling approaches…