We consider an economy in which competitive firms use three technologies for electricity production: pollutive fossils, intermittent renewables like wind or solar, and storage. We determine optimal subsidies for renewables and storage capacities when carbon pricing is imperfect. This policy is...

We consider an economy in which competitive firms use three technologies for electricity production: pollutive fossils, intermittent renewables like wind or solar, and storage. We determine optimal subsidies for renewables and storage capacities when carbon pricing is imperfect. This policy is...

We consider an economy in which competitive firms use three technologies for electricity production: pollutive fossils, intermittent renewables whose availability varies continuously over time, and storage. A Pigouvian tax implements the first-best solution. This is also the case for an...

Most electricity systems face contractual fixed consumer prices in the short term, that is, load and price are fixed before the random supply of renewables like wind or solar realizes. Steam power plants also make production decisions before such a random supply realizes. These capacities cannot...

Increasing shares of intermittent renewable energies challenge the dominant way to trade electricity ex-ante in forward, day-ahead, and intraday markets: Coal power plants and consumers cannot react to the stochastic element of renewables, whereas gas turbines can. We use a theoretical model to...

Nuclear stretching operation in Germany until April 15, 2023 brings down German (European) power prices by 6.01 percent (1.51 percent) until April 15, 2023 and by 2.98 percent (0.65 percent) in 2023, saving 4.8 TWH (8.6 TWh) of natural gas and 3.3 Mt (4.5 Mt) of CO2 emissions in 2023. Nuclear...

European energy crisis has three elements: skyrocketing prices for energy carriers such as natural gas, coal, as well as electricity, reduced nuclear power plant availability in France, and lower hydro power generation in Europe. This paper decomposes the effects of those elements on power...

Decarbonization requires the transformation of power markets towards renewable energies and investment costs are decisive for the deployed technologies. Exogenous cost assumptions cannot fully reflect the underlying dynamics of technological change. We implement divergent learning-bydoing...