Electricity Market Design


Photo credit: 
Linda A. Cicero / Stanford News Service

Meeting today’s most pressing energy challenges—controlling air pollution, reducing greenhouse gas emissions, integrating renewable energy, delivering modern energy services to populations that lack them—requires expanding and improving the functioning of electricity markets. Because electricity is not cheap to store, and supply must meet demand at every location and every moment, electricity markets are particularly susceptible to the exercise of market power and other issues. Strong government incentives to reduce greenhouse gas emissions and increase the use of renewable energy create additional challenges for electricity policymakers and regulators. This research platform focuses on how to design and regulate electricity markets so they can meet these various policy goals as effectively and efficiently as possible in different institutional contexts, while minimizing costs to consumers and unintended consequences.