My PhD investigated risk allocation problems in electricity markets, their consequences for societal climate goals, and their implications for public policy. I set out to address the following questions:
- How does power system decarbonization depend on investor risk aversion and the incompleteness of risk markets?
- How do climate policy effects change when risk markets are incomplete?
- How does the optimal choice of renewable subsidies and carbon prices change in power markets with incomplete risk trading?
- How does risk impact the timing of EV infrastructure investments and how can government policies accelerate deployment?
To shed light on these questions, I developed stochastic optimization and equilibrium methods, including an equilibrium approach to modeling generation expansion in liberalized power systems, a game theoretic model of the interactions between an electricity market and a government seeking to reduce emissions, and a real options model of EV charging investments.