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(Rescheduling of the FLM on March 21, 2025)
Speaker: Junnan He, Assistant professor at Sciences Po department of economics.
Title: Diversified Production and Market Power: Theory and Evidence from Renewables
English presentation.
Abstract: We study the Colombian energy market, where diversified energy firms strategically substitute thermal generation for hydropower before droughts. This withinfirm substitution, due to thermal generators internalizing the drop in hydropower supply during droughts, mitigates higher market prices. We show theoretically and empirically that these virtuous spillovers exist when thermal generators have market power but are severed when their residual demands are vertical or horizontal, which attenuates a firm’s business stealing incentives. We conclude that industry consolidation can reduce prices if it promotes diversified production portfolios. Diversification can keep the green transition affordable by reducing the cost of renewable intermittencies.
Practical informations : Our Friday Lunch Meeting will take place from 12.30 to 2.00 pm
FLMs are held in a face-to-face format in the seminar room on the 4th floor of the Palais Brongniart, 28 Place de la Bourse, 75002 Paris.
To participate we invite you to preregister here
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