Modern-day challenges in electricity markets

Adelowo, Jacqueline Folasade (2025): Modern-day challenges in electricity markets: design, environmental impacts, and adaptive resilience to climate change. Dissertation, LMU München: Volkswirtschaftliche Fakultät

Abstract

High hopes are placed on the transformation of electricity systems and the electrification of carbon-intensive sectors to reduce greenhouse gas emissions and thereby mitigate climate change. At the same time, electricity prices should remain fair and affordable, as electricity is an omnipresent and essential good. This dissertation contributes to understanding how we can operate electricity markets in a way that prevents excessive pricing, minimizes environmental harm, and ensures resilient supply security in a world affected by climate change. I address these three challenges using simulation, numerical optimization, and econometric methods. The first essay develops improved approaches to approximate firms’ electricity production costs, thereby strengthening regulators’ ability to detect and prevent suspected market power abuse. I simulate how this enables more efficient markets, generating both welfare gains and welfare transfers. The second essay examines long-term trade-offs in jointly reducing carbon emissions and local air pollution from electricity generation. By linking damages and abatement costs of both emission types to specific generation technologies, I show how their mix can be optimized through complementary taxation. Finally, with increased occurrences of extreme weather events due to climate change, the third essay investigates the aftermath of a cold-spell. I demonstrate that experiencing extreme-weather-induced electricity outages induces households to invest in home electricity back-up systems but I also reveal notable socio-economic disparities in how strongly and how quickly communities adapt.

• Dokumententyp: Dissertationen (Dissertation, LMU München)
• Themengebiete: 300 Sozialwissenschaften ; 300 Sozialwissenschaften > 330 Economics
• Fakultäten: Volkswirtschaftliche Fakultät
• Sprache der Hochschulschrift: Englisch
• Datum der mündlichen Prüfung: 10. Juli 2025
• 1. Bericht­erstatter:in: Pittel, Karen