Research Library

The authors examine how vertical market structures impact the way a tax affects gas prices, using data from gas station contracts with a major Spanish refiner. Find the article in The Economic Journal.

The ORDC has been proposed in some markets to solve the missing-money problem. The authors estimate the extent to which ORDC prices are negatively affected by wind generation, using hourly data from ERCOT between Jan. 2015 and Feb. 2019. The authors conclude that if wind penetration increases, ORDC may not be a good idea.

Scholar Raúl Bajo Buenestado examines the consumer welfare consequences of introducing capacity payments in the electricity sector, finding that capacity payments reduce price volatility and increase the reliability of the system but also cause consumers’ electricity bills to rise.

Though consumers generally pay higher electricity prices in areas with capacity markets, those markets also serve as an insurance mechanism to incentivize capacity additions and reduce the probability of extreme events. Graduate fellow Raúl Bajo Buenestado analyzes the implications of capacity markets for consumers in liberalized energy sectors.