Essays on renewable electricity
Creators: name: D'Agosti Altesor, Natalia Lucia
Publisher: name: No Publisher Supplied
Year: 2023

description: My dissertation seeks to contribute to understanding the challenges and benefits of integrating renewable energy sources into the grid. It is structured into three chapters, each focusing on distinct aspects of renewable energy expansion. The first two chapters focus on expanding renewables at a large and small scale. The third chapter explores the intersection of gender and renewable energy. In Chapter 1, I study the transformation of Uruguay's electricity production mix as it transitions to renewables. Analyzing hourly production data and exploiting the exogeneity of wind and solar production, I study how an increase in wind and solar production first, displaces fossil fuel, hydro, and biomass electricity production. Second, I analyze how this transition reduces CO2 emissions in a context of large hydro production; third, how it affects spot prices. An increase in wind and solar production has several effects: (i) a displacement of fossil fuel production, especially in winter. 1 MWh increase in wind displaces fossil fuel and hydro production by 0.17 and 0.69 MWh, respectively. Solar only has a significant effect on hydro, a 1 MWh increase in solar decreases hydro production by 0.84 MWh; (ii) a reduction on emissions, a 1 MWh increase in wind reduces 17 kg of CO2 emissions from fossil fuel production; (iii) a spillover effect to the region due to an increase in exports to Argentina and Brazil, where 1 MWh increase in wind and solar increases exports by 0.13 and 0.22 MWh, respectively; (iv) a decrease in spot prices, a 1 MWh increase in wind and solar decreases spot prices by 0.22% and 0.17%, respectively. This decrease in spot prices is caused by the shutting off of the most (marginally) costly plants. However, the increase in wind and solar production is not enough to eradicate fossil fuels. These could be explained because wind and hydro are at their lowest in summer/spring. Since solar is not enough to satisfy consumption, fossil fuel is used. Chapter 2, a joint work with Facundo Danza, focuses on small-scale solar panel adoption by households and firms in Uruguay. Since 2010, the government has allowed agents with solar panels to inject any excess of electricity into the grid. Using a novel dataset on electricity extraction and injection into the grid at the household/firm level for the whole country, we find that first, solar panels decrease the electricity extracted from the grid. Second, the amount of electricity injected into the grid increases. Third, we find a reduction in CO2 emissions. Fourth, we find evidence of a rebound effect: consumption increases between 20% and 26% on average. Finally, we propose an alternative policy that allows agents to store the electricity in batteries instead of immediately injecting it into the grid. According to the model, the best time to inject electricity into the grid is around 9 PM. In Chapter 3, the investigation shifts toward the influence of gender diversity on the promotion of renewable energy production. Empirically, this is a challenging topic to study. Even if countries with more female legislators pass more environmental protection laws, we may ask: Do female legislators pass more laws related to environmental protection, or are countries more likely to elect female legislators intrinsically more progressive? To circumvent this issue, I create a panel data with country and year fixed effects and instrument the endogenous variable, the percentage of female legislators. I use the passing of a quota law and the number of years since women's suffrage in the country as instruments for the analysis. I find that a one percentage point increase in the proportion of women in the legislature increases renewable energy production between 0.74 and 1.64 percentage points. This study suggests that fostering policies that boost women's participation in policy-making positions benefits the environment, especially when considering the positive spillover to other countries. In conclusion, this dissertation sheds light on the challenges and benefits of renewable energy integration. It highlights the impact of renewables on different outcomes, considering both changes at the country and agent level. Finally, it also explores the role of gender diversity in increasing renewable energy production. These findings contribute to understanding how to improve sustainable energy transitions and inclusive policy-making.