50 likes | 176 Views
Economic Policy Making for Energy Markets. Challenges. Have MBAs /social scientists and engineers work together Engineer: I want to b uild the best gadget Economists: Only build it of the benefits outweigh the costs Acknowledgement: EPRG. Economic Challenge .
E N D
Challenges • Have MBAs/social scientists and engineers work together • Engineer: I want to build the best gadget • Economists: Only build it of the benefits outweigh the costs • Acknowledgement: EPRG
Economic Challenge • Design/engineer a social system (i.e. policies) such that individual decisions will produce the desired outcome (e.g. reduce CO2 emissions). • Examples of systems: • European emissions trading • Feed-in tariffs • Network regulation (my topic)
Energy Policy Objectives • Reliable/consistent policy (security of supply) • In South Africa bad policies led to insecure supply • Low carbon (allow wind farms to connect to network) • Low cost (competition between generators) • Reliable energy (provide a return for investment).
UK Challenge • Consistent policy: • Politicians want particular system (markets) AND particular outcome (more renewables) which leads to investment uncertainty. • Devise policies that take advantage of UK renewables potential.