In the third lecture, we will talk about environmental regulation and how it affects participants in the electricity market.
In the practical session, we will continue to learn how to use JuMP to build electricity models. We will incorporate investment and environmental regulation into a model with a richer set of plants. We will also practice ways in which to save and loop over several simulations.
Slides: day3.pdf
Supplementary Slides: slides_chile.pdf
The exercise will be based on the paper by Reguant (2019), "The Efficiency and Sectoral Distributional Impacts of Large-Scale Renewable Energy Policies". Reading the paper in advance is encouraged.
Exercise file: day3.ipynb
Data file: data_jaere_clustered.csv, data_technology.csv
❗ Save the exercise Julia file (.ipynb) and the data zip file in the same folder. You need to unzip de data_leakage folder. It should appear as a subfolder with the same name, "data_leakage". It contains several .csv files. Then, open the exercise Julia file from Jupyter Notebooks to start exploring.
Note that the .pdf file provides a snapshot of the exercise. It does not require any installation but it will not allow interactions.
Bushnell, J., Chen, Y., & Zaragoza-Watkins, M. (2014). Downstream regulation of CO2 emissions in California’s electricity sector. Energy Policy, 64, 313–323. https://doi.org/10.1016/j.enpol.2013.08.065
Bushnell, J. B., Holland, S. P., Hughes, J. E., & Knittel, C. R. (2017). Strategic policy choice in state-level regulation: The EPA’s clean power plan. American Economic Journal: Economic Policy, 9(2), 57–90. https://doi.org/10.1257/pol.20150237
Davis, L., & Hausman, C. (2016). Market impacts of a nuclear power plant closure. American Economic Journal: Applied Economics, 8(2), 92–122. https://doi.org/10.1257/app.20140473
Fabra, N., & Reguant, M. (2014). Pass-through of emissions costs in electricity markets. American Economic Review, 104(9). https://doi.org/10.1257/aer.104.9.2872
Fowlie, M., & Reguant, M. (2018). Challenges in the Measurement of Leakage Risk. AEA Papers and Proceedings, 108, 124–129. https://doi.org/10.1257/pandp.20181087
Kim, H. (2021). Heterogeneous Impacts of Cost Shocks, Strategic Bidding and Pass-Through: Evidence from the New England Electricity Market. American Economic Journal: Microeconomics, 1–42. https://doi.org/10.1257/MIC.20190367