MSP2: Risks and Finance in Integrated Energy Markets

Significant investment will be needed in integrating energy and water systems. However, there are risks and uncertainties associated with ESI technologies, policy, prices, market evolution, weather and climate that can have a substantial effect on financial performance and the timing of investments (Yang et al., 2008). These effects are not well-represented in traditional deterministic discounted cash flow investment models estimating expected revenue streams (Dixit and Pindyck, 1994). This WP will develop models of energy investment that consider the inherent risk and uncertainty of integrated energy system technologies using Real Options Analysis (ROA), which is a known technique in corporate finance but has been limited in its application to the energy sector (Fernandes et al., 2011; Devine et al., 2014). It will use this framework and other methods to assess different hedging and support strategies to mitigate the risks associated with ESI and future markets to achieve socially-optimal levels of integrated energy system investment.


Research Outputs

Journal Clean energy investing in public capital markets: Portfolio benefits of yieldcos
2018; Energy Policy; La Monaca, S., Assereto, M. and Byrne, J.
Conference  The Profitability of Energy Storage in European Electricity Markets
2018; 15th IEEE International Conference on the European Energy Market (EEM 2018), Poland; Spodniak, P., Bertsch, V. and Devine, M.
Conference  Harnessing electricity retail tariffs to support climate change policy
2018; 6th World Congress of Environmental and Resource Economists (WCERE), Sweden; Ryan, L., La Monaca, S., Mastandrea, L. and Spodniak, P.
Conference  Information Asymmetry, Split Incentives and Energy Efficiency in the Residential Rental Market
2018; Irish Early Career Economics Conference, Ireland; Petrov, I. and Ryan, L.
Conference  Linking retail pricing policy with the decarbonisation of the electricity sector
2018; Irish Early Career Economics Conference, Ireland; Mastrandrea, L. and Ryan, L.
Conference  Volatility modelling using GARCH as an input for real options: the case of solar energy in the U.S.
2018; The International Conference on Energy Economics and Energy Policy   (ICEEEP 2018), Spain; Assereto, M. and  Byrne, J.
Journal Energy efficiency in the food retail sector: barriers, drivers and acceptable policies
2018; Energy Efficiency; Dixon-O'Mara, C. and Ryan, L.
Journal Forward Risk Premia in Long-term Transmission Rights: the Case of Electricity Price Area Differentials (EPAD) in the Nordic electricity market
2018; Utilities Policy; Spodniak, P. and Collan, M. 
Conference  High-frequency liquidity in the MTS European bond markets
2017; 11th International Conference on Computational and Financial Econometrics - CFE 2017 , United Kingdom (excluding Northern Ireland); Zhang, H and Dufor, A.
Conference  Determinants of Power Spreads in Liberalized Electricity Markets
2017; 3rd Applied Financial Modelling Conference, Malaysia; Spodniak, P. and  Bertsch, V.
Journal Solar PV where the sun doesn't shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling
2017; Energy Policy; La Monaca, S. and Ryan, L.
Conference  Behavioural Aspects of Decision Making in Energy Systems - A Selection of Current Topics  
2017; 21st Conference of the International Federation of Operational Research Societies - IFORS 2017, Canada; Bertsch, V.
Conference  Designing retail tariffs to decarbonise the electricity system
2017; 2017 14th International Conference on the European Energy Market (EEM), Germany; Ryan, L., La Monaca, S. and Mastrandrea, L.


Dr Julie Byrne
Funded Investigator, Assistant Professor, School of Business, University College Dublin
01 716 8916
Dr Lisa Ryan
Assistant Professor, School of Economics, University College Dublin
+353 1 716 8212
Dr John Curtis
Associate Research Professor, ESRI, Dublin
+353 1 8632000
Prof Valentin Bertsch
Professor of Energy Systems Analysis, University of Stuttgart, Germany
Dr Petr Spodniak
Postdoc Researcher
Dr Hanyu Zhang
Postdoctoral Researcher
Guneet Kaur
Research Assistant
Martina Assereto
PhD Researcher
Linda Mastrandrea
PhD Researcher