Internal Economic Department Seminars – A. Shanker and C. Kiran
Friday 6 September, 2019at 14:00 - 15:00
Fika room, Economics department, USBE
Title: The Economics of Renewable-only Electricity Markets with storage
Abstract: We investigate key aspects of a benchmark market with fully renewable electricity generation. We develop a model of endogenous intermittent generation and electricity storage capacity, along with a spot market determines (endogenously) that the hourly price of electricity. Our focus is on the unpredictable part of intermittency and on the variability in demand. In this setting, we are interested in understanding two key aspects of the resulting electricity market: the role played by electricity storage in an intermittent-only market; and the effect of storage on price dynamics and welfare. These questions are investigated in a dynamic stochastic framework, which is a combination of a speculative storage model and a stochastic growth framework.