May 2024

On May 28th, Prof. Natalia Fabra will participate in a seminar organized by NHH and BECCLE (Bergen Center for Competition Law and Economics) with the topic: “Market Design in the European Electricity Market – Fit for the Future?”. She will share her thoughts on the challenges and necessary measures to prepare the European electricity market for the energy transition. She will be joined by Prof. Nils-Henrik M. von der Fehr (University of Oslo) and will receive comments from Prof. Mette Bjørndal (Norwegian School of Economics).

In her presentation, she will discuss the challenges for the design of electricity markets that have been highlighted by the recent energy crisis in Europe and will become more prominent as the energy transition continues. One of these challenges is the mismatch between marginal and average costs of electricity, which leads either to windfall profits for electricity producers and significant losses for consumers, or to chronic underinvestment in generation capacity. The increasing variability of marginal costs, which makes future spot prices increasingly uncertain, is also a challenge in an industry that is highly capital intensive and could see its cost of capital rise.
As this could have a broad impact on the economy, Pr. Fabra then discussed the policy measures that should be implemented to address these challenges, focusing on two instruments that have recently received much attention in the public debate on electricity regulation: Power Purchase Agreements (PPAs) and Contracts for Differences (CfDs).

The full programm of the event is available here, and the presentation by Prof. Natalia Fabra is available here.