Akshaya Jha, Frank Wolak, 14 August 2019

Futures trading should make spot markets more efficient. The column uses the introduction of purely financial traders in the California energy market to show that their presence reduced average price differences between day-ahead and real-time markets. The introduction of financial trading in high-demand hours saved $23 million in fuel costs and reduced emissions and pollution.

Laura Mørch Andersen, Lars Gårn Hansen, Carsten Lynge Jensen, Frank Wolak, 26 April 2019

Increased reliance on solar and wind power has changed the approach to managing peak demand. The column details the results of a Danish experiment designed to flatten demand in which customers were randomly assigned to receive rebates based on how much consumption they could shift between periods of the day. Asking customers to shift consumption to periods of low net demand would create daily cost savings of €100,000 for the utility in question. Paradoxically, demand-shifting reduces the need for installed generation capacity, but increases overall demand.

Judson Boomhower, Lucas Davis, 01 February 2017

Electricity prices can vary dramatically within a single day. However, most analyses of energy efficiency programmes ignore this variation, focusing on total energy savings without regard to when those savings occur. This column uses hourly smart-meter data to demonstrates a surprisingly large variation in economic value across energy efficiency investments. Air conditioner investments, for example, deliver savings when the value of electricity is high, increasing their value by about 50%.

Hunt Allcott, Allan Collard-Wexler, Stephen O'Connell, 03 December 2015

In many countries, electricity supply is cited as a primary impediment to firm growth and productivity. This column assesses the effect of endemic electricity shortages on Indian manufacturers. The average reported level of shortages reduces annual plant revenues and producer surplus of the average plant by 5-10%. While the complete elimination of shortages may not be plausible in the near term, simulations show that interruptible retail electricity contracts could substantially reduce the impact of shortages on manufacturers.

Ejaz Ghani, Arti Grover Goswami, William Kerr, 18 November 2015

Urbanisation in India is taking many twists and turns. Organised manufacturing is moving out of urban areas, while unorganised manufacturing is transitioning towards urban areas. As the fourth greatest energy consumer in the world, how the country manages this ongoing industrialisation and urbanisation process will have important environmental implications. This column looks at the relationship between growth, geography, and energy efficiency in manufacturing in India. Electricity consumption per unit of output has declined in urban and rural areas, but these overall trends mask substantial variation between states and substantial potential for further efficiency improvements in energy-intensive industries.

Carl Kitchens, 29 January 2014

Economists have found that large-scale infrastructure investments tend to increase economic growth and reduce poverty. However, there has been relatively little research on the effects of smaller, more targeted investment projects. This column discusses recent research on the effects of the US Rural Electrification Administration, which provided subsidised loans for connecting farms to the electric grid. Counties that received electricity through the REA witnessed smaller declines in agricultural productivity, smaller declines in land values, and more retail activity than similar counties that did not.

Matthew Kotchen, Laura Grant, 05 December 2008

Daylight saving time, designed for energy conservation purposes, is among the most widespread regulations on the planet. Surprisingly little evidence exists that it actually saves energy. This column, using a natural experiment, concludes that “saving” daylight has cost electricity.


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