Mini-grids are emerging as a key solution to electrify access-deficit communities, yet their effectiveness in improving energy access and household welfare remains underexplored. This paper provides novel evidence from Tanzania, where a policy reform doubled the number of mini-grids since 2008. Exploiting spatial and temporal variation created by the distance to mini-grids for households in proximity and the timing of their deployment, and using data from two different nationally representative surveys, we find that mini-grids increase local electrification rates by 10 to 23 percentage points—a result corroborated by a surge in nighttime light intensity near newly deployed projects. We also show that mini-grids reduce reliance on polluting fuel-based lighting and drive the uptake of electric-powered devices. Back-of-the-envelope calculations suggest the surplus generated by renewable-based mini-grids nearly offsets their costs. JEL Classification: L94, Electric Utilities; O13, Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products; Q48, Energy: Government Policy; Q58, Environmental Economics: Government Policy
Smart unidirectional and bidirectional charging of electric vehicles (EVs) has raised great attention in recent years, enabling access to enormous flexibility potential for the energy system. One use case often discussed is the utilization of this flexibility for arbitrage trading. Price forecasts play an important role in performing flexibility trading, yet many cost savings analyses assume perfect foresight and do not account for the necessity of forecasting electricity prices. In this paper, we have developed a methodology to determine the impact of price forecasts on the cost savings of smart charging of EVs. Thus, we are able to evaluate to what extent the assumption of perfect foresight simplifies estimations of the cost savings of arbitrage trading on different markets for residential EVs, as well as to evaluate different forecasts for their suitability for arbitrage trading. We find a comparatively low impact of the perfect foresight assumption on the cost savings in day ahead (DA) market trading. In contrast, trading in the intraday auction (IA) is subject to a higher risk. The highest difference between cost savings using perfect foresight and forecast prices occurs for combined trading on the DA and IA market. We see a higher impact of imperfect foresight for bidirectional charging than for smart unidirectional charging. Additionally, the forecasts most suited to maximizing cost savings are not necessarily those that show the lowest deviations between forecast and real prices in terms of mean absolute error (MAE) or root mean square error (RMSE), but those forecasts, which best predict the price extrema (daily minima and maxima). JEL Classification : P18, Energy; Environment; D89, Information and Uncertainty: Other
This special issue collects six articles that translate economic research into practical guidance for electricity regulators. The articles cover regulated monopoly structure, the economics of regulation after restructuring, electric vehicle integration in constrained distribution networks, distributed backup power and grid reliability, the spatial and temporal variation in the environmental value of renewable energy, and energy justice. Across these domains, legacy regulatory frameworks designed for an earlier technological era now generate predictable distortions. Three themes recur: institutional lag, or the pacing problem; the dispersed and tacit knowledge that no central authority can fully aggregate; and the tension between efficiency and equity. Together, the contributions show that economic analysis can inform the decisions regulators face, provided researchers write for practitioners and practitioners' institutional experience shapes the questions researchers ask. JEL Classification : L90, Industry Studies: Transportation and Utilities: General; L51, Economics of Regulation; H23, Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Renewable projects in Australia often rely on Power Purchase Agreements (PPAs) or Contracts-for-Differences (CFDs) to manage merchant risk and ensure revenue stability. This study examines whether lithium-ion batteries can serve as an alternative for a merchant 250 MW wind farm portfolio in Australia’s National Electricity Market (NEM). Using technical and financial models, portfolio performance is evaluated in the energy, derivatives, and Frequency Control Ancillary Services (FCAS) markets. Scenarios consider battery capacities of 25 MW and 50 MW, each with two- and four-hour storage durations. Results show merchant wind farms face missing money and volatile revenues, but battery integration mitigates these issues. Under 50 MW scenarios, positive net present values (NPV) over adjusted free cash flows are achieved under a perfect foresight benchmark. This suggests that batteries can improve portfolio viability and reduce reliance on PPAs and CFDs, although these outcomes represent best-case scenarios and profitability declines materially once price uncertainty is introduced. JEL Classification: C61, Optimisation Techniques; Programming Models; Dynamic Analysis; L11, Production, Pricing, and Market Structure; Size Distribution of Firms; L94, Electric Utilities; Q40, Energy: General
I estimate the grid impacts of 126.3 MW of battery storage capacity operating in California during 2010 to 2017. I find that 1 MW of energy storage decreases evening peak prices by $1.11/MWh at the pricing node where the storage is installed while off-peak prices do not increase. The unobserved network structure is revealed and the price effects are estimated at other locations across the grid using a double-pooled LASSO-based estimator that reflects the grid’s constrained optimization price-determination process. Results imply a reduction in the cost of serving load of $123,700 per year per MW, an amount similar in magnitude to private revenue from arbitrage. Overall, I find early energy storage mandates in California are partially justified by reductions in the cost of serving load, and that effects are strongest at times in which increased penetration of zero-carbon solar generation impose higher costs on the grid. These patterns likely hold in any grid setting with inelastic peak supply relative to off-peak supply. JEL Classification: Q41, Energy: Demand and Supply; Prices; Q48, Energy: Government Policy; L14, Transactional Relationships; Contracts and Reputation; Networks; H23, Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
