Joint with Natalia Fabra.
RAND Journal of Economics, 54 (1), 3-53
We assess how firms' incentives to operate and invest in energy storage depend on the market structure. For this purpose, we characterize equilibrium market outcomes allowing for market power in storage and/or production, as well as for vertical integration between storage and production. Market power reduces overall efficiency through two channels: it induces an inefficient use of the storage facilities, and it distorts investment incentives. The worst outcome for consumers and total welfare occurs under vertical integration. The results are key to understanding how to regulate energy storage, an issue which is critical for the deployment of renewables.
Joint with Milena Almagro.
Theoretical Economics, 15 (2), 763-810
This paper explores the dynamics of nation-building policies and the conditions under which a state can promote a shared national identity on its territory. A forward-looking central government that internalizes identity dynamics shapes them by choosing the level of state centralization. Homogenization attempts are constrained by political unrest, electoral competition and the intergenerational transmission of identities within the family. We find nation-building efforts are generally characterized by fast interventions. We show that a zero-sum conflict over resources pushes long-run dynamics toward homogeneous steady states and extreme levels of (de)centralization. We also find the ability to foster a common identity is highly dependent on initial conditions, and that country-specific historical factors can have a lasting impact on the long-run distribution of identities.
Joint with Natalia Fabra.
R&R Economic Journal
Decarbonizing the power sector requires large-scale investments in renewable energies and storage. While these technologies are traditionally viewed as complementary, they may also act as substitutes from an economic perspective. When renewables are positively correlated with demand and their capacity is still small, storage can reduce renewable profits, and vice-versa, particularly when thermal producers behave strategically. Likewise, in markets with multiple renewable technologies with negatively correlated availabilities (e.g., solar and wind), storage benefits one technology while harming the other. These findings inform policies on the timing and effectiveness of mandates or subsidies, suggesting that solar investments may need an initial push before supporting storage. Simulations of the Spanish market show that, at high solar penetration, storage boosts solar profits but reduces wind profits.
CLIMATE POLITICS AND THE DYNAMICS OF GREEN PREFERENCES (draft coming soon!)
We analyze whether societies will adopt the environmental values and lifestyles required for tackling climate change. In particular, the paper studies how the co-evolution between consumers’ environmental concerns and the politics of environmental policies can achieve the energy transition. The results show that interventions by lobbying firms and environmental activists, even when short-lived, can have long-lasting effects.
THE POLITICAL ECONOMY OF ELECTRICITY MARKET INTEGRATION IN EUROPE (draft coming soon!)
Joint with Juan Mercatante and Mar Reguant.
We ask which cross-border lines Europe should build, who gains and who loses, and how to make agreements pass. Using a detailed market model with fast machine-learning emulators, we simulate many line portfolios and track country-by-country effects on prices, household bills, firm costs, and emissions. A simple political-economy layer (benefit-sharing, bargaining, EU voting) pinpoints packages that are both efficient and politically feasible.
NORMATIVE ANALYSIS OF ENVIRONMENTAL POLICY WITH ENDOGENOUS PREFERENCES (available upon request)
This paper explores the difficulties that endogenous preferences pose for normative work, using environmental policy design as a motivating example. I first assess how the major positions in welfare economics can be adapted to contexts in which policies shape preference formation. The implications for policy design of using different welfare criteria are then illustrated with a simple model of carbon pricing.
BRIGHT GREEN OR PALE GREEN? DESIGNING THE GREEN HYDROGEN REGULATION
Joint with Natalia Fabra.
MULTINATIONAL COMPANIES AND CONFLICT: THEORY AND EVIDENCE FROM THE MINING SECTOR
Joint with Michele Rosenberg and Shunsuke Tsuda.