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Research Statement


Working Papers

We analyze the impact of the COVID-19 pandemic on electricity consumption patterns in Spain. We highlight the importance of decomposing total electricity consumption into consumption by firms and by households to better understand the economic and social impacts of the crisis. We also document a change in people’s daily routines in response to the stringency of the lockdown measures, as reflected in their hourly electricity consumption patterns.

We assess firms’ incentives to operate and invest in energy storage facilities under different market structures, including competitive and strategic storage owners in the cases in which the storage owner is integrated with a dominant electricity producer or it is a stand-alone firm. The results are key to understanding how to regulate energy storage, an issue which is critical for the deployment of renewables in electricity markets.

We assess the impact of facing producers to varying degrees of price exposure on the market power. This question is particularly relevant for the renewables’ policy debate, as regulators can decide whether to face renewable producers to full, partial, or no price exposure, an issue that affects the performance of power markets. To identify these effects empirically, we exploit a natural experiment that took place in the Spanish electricity market, that switched the type of contract faced by wind producers.

We analyse equilibrium bidding behaviour in uniform-price and discriminatory auctions in which each firm’s capacity is stochastic and is private information. We use the model to shed light on the performance of renewables-dominated electricity markets.

We compare the “degrowth” versus the “decoupling” strategies for carbon abatement by leveraging the COVID-19 crisis as a natural experiment. Our focus is on the Spanish economy, and in particular, on its power sector. The GDP loss (degrowth) gives an implicit cost of carbon in the thousands. Investing in renewables to achieve similar abatement would have an implicit cost of carbon closer to 57 Euros/Ton.

We argue that private incentives are typically insufficient for an economy to be prepared for rare events with large negative impacts. Instead, it is preferable to put in place mechanisms that make sure that prevention, detection and mitigation measures are taken. The economics of electricity capacity mechanisms provides valuable lessons for the provision of essential goods in such events.

An imperfectly informed regulator needs to procure multiple units of a good that can be produced with heterogeneous technologies at various costs. Should she run technology-specific or technology-neutral auctions? We find that one size does not fit all: the preferred instrument depends on the nature of the available technologies, the extent of information asymmetry regarding their costs, the costs of public funds, and the degree of market power.

Work in Progress

  • “The Distributional Impacts of Real Time Pricing” (with M. Cahana, M. Reguant and J.Wang) COMING SOON!!

We examine the distributional impacts of RTP by leveraging on a country-wide field experiment which started in 2015, when RTP became the default option for most Spanish households. Our results suggest that the distributional impacts of RTP were quite small and, if anything, slightly progressive. We also find stronger differences in the impacts across regions than across income groups.

  • “Do Renewables Create Local Jobs?” (with  E. Gutiérrez, A. Lacuesta, and R. Ramos) COMING SOON!!

We estimate the impacts on employment of local firms and unemployment of local residents following investments in renewable energies. We exploit the variation in the timing and size of the investment projects across Spanish municipalities above 1,000 inhabitants, over a 17 years period. We find low multipliers for employment of local firms that are mainly concentrated during the construction of the plant. Benefits are even more limited if one analyzes the impact on unemployment of those residing in the municipality of investment. The relatively small magnitude of the local effects suggests the possibility to put in place compensation schemes at the local level in order to more evenly distribute the benefits of renewable investments.

  • “On the Complementarity between Renewable Energy and Storage” (with  D. Andrés-Cerezo)

We model an electricity market in which renewable energy coexists with storage. We show that the value of additional storage capacity is greater (lower) in markets with more renewable energy if the correlation between renewable energy and the net load is negative (positive). Furthermore, this degree of complementarity is higher the more market power there is in generation. We illustrate the model predictions with simulations of the Spanish electricity market.


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