Are decarbonisation and the energy crisis challenging the electricity markets design?

Energy economists have supported the establishment of open markets for electricity for more than 30 years. They are aware that electricity is a commodity with very specific features and do not deny that concrete examples of electricity markets in Europe, North America and elsewhere are hardly perfect. Yet, they have investigated their imperfections and proposed solutions to deal with them over the years. Books like “Imperfect Markets and Imperfect Regulation” by Thomas-Olivier Léautier provide a comprehensive treatment of this vision, according to which electricity can be supplied reliably and efficiently by competing energy firms.

Today, the rapid penetration of variable and distributed renewable energy sources in the generation mix, the policy goal of reaching net-zero greenhouse gas emissions by 2050, and the recent explosion of energy prices at the wholesale and retail level challenge the validity of this vision and some people call for a profound rethinking of how electricity is provided.

In this episode of FSR Talk, professor Jean-Michel Glachant will host Thomas-Olivier Léautier and discuss the fundamentals of open markets for electricity and whether significant changes are needed to cope with the profound transformations that the sector is experiencing. Swetha RaviKumar Bhagwat and Nicolò Rossetto, both researchers at FSR, will join the discussion and pose questions to the guest speaker before the floor is open for a Q&A session with the audience.

Watch the recording:

Dr Léautier has a long and remarkable career in the energy sector, both within the industry and academia. After an experience as a professor at the Toulouse School of Economics, Thomas-Olivier was chief economist and director of the corporate university for management at EDF, the leading French electric utility. More recently, he joined TotalEnergies as chief economist. TotalEnergies is one of the largest European energy companies with a long tradition in the oil and gas sector, now willing to turn into a major renewable energy producer.

On the Talk topic, Thomas-Olivier has written several articles in scientific journals, a textbook published by MIT Press in 2019, and co-authored one of the chapters of the Handbook on Electricity Markets published by Edward Elgar in fall 2021.

Agenda:

• Introduction and initial speech by the guest speaker: Jean-Michel Glachant (5’) and Thomas-Olivier Lèautier (15’)
• Discussion with Swetha RaviKumar Bhagwat and Nicolò Rossetto (15’)
• Q&A with the audience (25’)

Host: Jean-Michel Glachant

Invited guest: Thomas-Olivier Léautier

Discussants: Swetha RaviKumar Bhagwat, Nicolò Rossetto

Learn more:

Executive Course to master Electricity Markets – FSR online training

Imperfect Markets and Imperfect Regulation by Thomas-Olivier Léautier

Handbook on Electricity Markets ed. by J.M. Glachant, P. Joskow, M. G. Pollitt