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Essays on the economics of energy transition in the U.S. electricity markets
Boz, Deniz Ege
Boz, Deniz Ege
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2024
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Boz_mines_0052E_12923.pdf
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Abstract
This thesis, titled ”Essays on the Economics of Energy Transition in U.S. Electricity Markets,” explores critical economic aspects of integrating renewable energy sources into the United States’ electricity grid. The research is structured into three main essays, each addressing distinct but interconnected questions related to the economic impacts, technological innovations, and policy implications of the energy transition. The first essay examines the economic implications and benefits of employing Volt/VAR Optimization (VVO) technologies within U.S. electricity distribution networks. Traditionally used for energy efficiency, VVO technologies are evaluated for their potential to mitigate power interruptions caused by the volatility of renewable energy outputs, particularly from solar photovoltaics (PV) and wind turbines. The second chapter delves into market barriers to demand response participation in organized wholesale markets by analyzing empirical data on realized energy savings from demand response across residential and commercial customer classes after the FERC Order 745. Using a difference-in-differences (DiD) approach, the research evaluates whether the prior pricing structures targeted by FERC Order 745 hindered the market participation of demand response resources. The study grapples with extensive missing data, employing a multiple imputation methodology. The third chapter provides empirical investigation using instrumental variable estimation technique and scrutinize if utilities in the U.S. are expanding the size of their demand response programs as a mean to confront rising supply intermittency in their local electricity markets. Overall, this thesis provides comprehensive insights into the economic challenges and opportunities associated with the energy transition in the U.S. electricity markets. It underscores the importance of strategic investments in grid technologies, effective policy measures, and innovative market mechanisms to achieve a reliable, resilient, and economically sustainable energy system. The findings offer valuable guidance for policymakers, industry stakeholders, and researchers committed to advancing the transition to a low-carbon energy future.
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