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My contribution to the #electricity market debate, today at @voxeu
Thread 🧵
cepr.org/voxeu/columns/…
Thread 🧵
cepr.org/voxeu/columns/…
1/Von der Leyen “Current electricity market design is not doing justice to consumers They should reap the benefits of lowcost renewables We will do a deep and comprehensive reform of electricity markets”
politico.eu/article/ursula…
Which should be the building blocks of the reform?
politico.eu/article/ursula…
Which should be the building blocks of the reform?
2/ On the objectives:
➡️*Productive efficiency*: demand must be met by the plants with the lowest marginal costs 📉📈
➡️*Investment efficiency*: investments must take place at the right scale, mix, and locations 🌞🍃
➡️*Equity*: prices should be cost-reflective 🪙
➡️*Productive efficiency*: demand must be met by the plants with the lowest marginal costs 📉📈
➡️*Investment efficiency*: investments must take place at the right scale, mix, and locations 🌞🍃
➡️*Equity*: prices should be cost-reflective 🪙
Good news from #Brussels
The leaked @EU_Commission non-paper on Emergency Electricity Mkt Interventions addresses the root sources of the 10-fold electricity price increase:
➡️Excessive profits of inframarginal technologies (nuclear, hydro, renewables)
➡️Gas scarcity
🧵 Thread
The leaked @EU_Commission non-paper on Emergency Electricity Mkt Interventions addresses the root sources of the 10-fold electricity price increase:
➡️Excessive profits of inframarginal technologies (nuclear, hydro, renewables)
➡️Gas scarcity
🧵 Thread
The proposals imply a big step #forward in our understanding of how #electricity markets should be designed
And watch out 🔊 because emergency measures pave the way to #structural reform!
Some key reasons & thoughts...
And watch out 🔊 because emergency measures pave the way to #structural reform!
Some key reasons & thoughts...
1/ Acknowledging that not all technologies should be paid at the cost of gas-fired generation is equivalent to acknowledging that:
📢 a single *technology-neutral* *energy-only* market design is not adequate – under emergencies & beyond
📢 a single *technology-neutral* *energy-only* market design is not adequate – under emergencies & beyond
