When will renewable generators become the dominant tool in the global electricity supply? Society may now have reached the tipping point. Richard Green, Professor of Sustainable Energy Business at Imperial College Business School, is coming to discuss the topic at the Department of Economics, University of Toronto.
Entitled “High-Renewable Electricity Market and Policy Design,” the ad hoc seminar is on Tuesday, October 17, 2023, from 2:30-4:00 at Max Gluskin House (150 St. George St.), room 106.
Green’s on-going research into the economics and regulation of the electricity industry started more than thirty years ago. The focus of his work is on competition in the wholesale market, on how decarbonization will affect the industry, and how it should be promoted.
“Given the increasingly alarming climate data, economists and economics students must be prepared to analyze the data and articulate the models to inform evidence-based decisions by business leaders and policymakers,” said Professor Adonis Yatchew who organized the event. “Richard Green has dedicated more than thirty years of his career to electricity and energy research, and he is an excellent person to lead this discussion among members of the global community.”
In the recent past, government policies supported a small amount of relatively expensive wind and solar generation in electricity markets dominated by fossil, hydro, or nuclear power. Since then, wind and solar costs have declined dramatically to the point where they are often cheaper per MWh generated than alternative power sources, particularly given the impact of Putin’s war on natural gas prices.
Does this mean that renewable generators can expand to take over electricity supply, decarbonizing it via market forces without further government intervention, or is there still an opportunity for the right policy to raise welfare? More specifically, can revenue stabilization policies for renewable generators (as opposed to the earlier revenue-increasing subsidies) reduce their cost of capital without destroying market signals? Do the very different characteristics of wind and solar generators, and in particular their weather-dependent availability, mean that wholesale market designs need to change, and if so, how radically? This seminar will combine a review of recent reform proposals with model-based work on how different support policies affect generators’ revenue risks.
Professor Green started his career at the Department of Applied Economics, University of Cambridge and has been a professor at the Universities of Hull and Birmingham. He has also held visiting appointments at the World Bank, the University of California and MIT.
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