Real-time electricity pricing (RTP) has been introduced as the default option for all households in Spain. This means that, instead of paying a traditionally flat retail price, residential consumers now face a retail tariff that varies hourly, according to changes in wholesale electricity prices. No other country has ever implemented RTP as broadly.

In several countries, renewables already represent more than one third of total electricity generation, and they are expected to become the main source for power generation by 2030. Yet, we do not have a full understanding of how renewable producers will compete among them in renewables-dominated markets. Most of the existing models do not capture one of their distinguishing features – namely, their availability is uncertain, and this introduces asymmetric information among firms. In the project, we build a new model of competition among renewables: (i) to understand their market price impacts under the current arrangements, and (ii) to identify the effects of changes in market design in renewables-dominated markets.

How would the electricity market react to an increase in renewables, to an increase in carbon prices, to the mothballing of polluting plants? How would it react to a merger between competitors, to entry by smaller players, to an increase in the interconnection capacity between countries? Does it matter for market performance whether renewables are subject to Contracts for Differences or to fixed premia contracts?

Social and health impacts of pollution should be measured and factored into policymaking. Focusing on evidence-based policymaking, we are exploring new evidence and approaches to estimate the health impact of energy and environmental policies. For instance, we are looking at the health impact of indoor air pollution using a large policy experiment occurred in Indonesia. 

Energy efficiency improvements are often cited as being crucial for carbon abatement. However, questions remain regarding the efficacy of energy efficiency programs/policies. Some studies suggest that those types of programs, on average, may not be as cost-effective as initially anticipated, meaning that it could be more expensive to reach climate goals. Nevertheless, some projects may be highly beneficial. Research is needed to therefore identify and target the most effective projects, as well as to improve the programs that are already in place.

Energy storage has a key role to play in renewables-dominated electricity markets. First, by linking markets across time, storage allows to smooth prices and production in response to predicted and unpredicted fluctuations in demand and renewables output. Furthermore, because storage improves security of supply, it reduces the need to invest in back-up capacity. In sum, storage boosts productive and investment efficiency in electricity markets.

Transport is a leading source of greenhouse gases and local air pollutants, particularly in urban areas where most of the congestion occurs. The health, economic, and societal costs of local air pollution are substantial, ranging from decreased life expectancy and increased infant mortality to far-reaching economic implications such as job losses, decreased consumer spending, and overall welfare costs.