Research & Applications
The effect of regulatory uncertainty in green certificate markets: Evidence from the Swedish-Norwegian market (Energy Policy, 2021)
In this project, I analyse the effects of regulatory uncertainty in markets for renewable energy certificates using data from the Swedish–Norwegian market. I find strong evidence that regulatory changes and political deliberations increase price volatility, thereby raising uncertainty about future revenues from renewable energy projects. Higher volatility, in turn, negatively affects the investment climate, delaying the development of Swedish wind power projects by 12%. These results suggest that regulatory uncertainty can weaken the cost-effectiveness of market-based climate policies by making conditions less predictable for investors.
Methods used: Data analysis & statistical modelling (ARMA/GARCH, structural breaks, hazard models) • Investment analysis (real options valuation, risk modelling)
Links: Published paper
Bidding behaviour in interdependent markets for electricity and green certificates (Energy Economics, 2025)
Understanding how subsidies for renewable energy affect pricing in electricity markets is important for evaluating their full costs and benefits. In this project, I use an economic model to study how tradable green certificate subsidies influence competition between dominant producers with market power. I find that when a subsidised producer has a higher generation cost than a conventional one, the subsidy improves competition and market efficiency. When they have similar costs, the subsidy instead gives the subsidised producer a strategic advantage, allowing higher profit margins. This weakens both competition and equity between producers and consumers, as consumer prices reflect both wholesale electricity and certificate prices.
Methods used: Applied auction & game theory • Economic modelling of trading strategies • Numerical analysis
Links: Published paper
Search frictions in competing sealed-bid auction markets
As more trade moves online, competing auctions have become increasingly common in decentralised markets. Despite empirical evidence of identical goods being sold at different prices in competing auctions, there is limited research on the role of search frictions in such markets. In this project, I use economic modelling and Monte Carlo simulations to show that search costs could explain these observed price differences: when it is costly for buyers to find alternative sellers, only buyers who value the good sufficiently highly choose to search, leading to an uneven distribution of buyer types across auctions. Price dispersion not only creates winners and losers, but also makes it harder for market participants to assess the true value of a good.
Methods used: Data analysis (simulation-based) • Applied auction theory • Economic modelling of search behaviour
Links: Working paper
In this project, I analyse the effects of regulatory uncertainty in markets for renewable energy certificates using data from the Swedish–Norwegian market. I find strong evidence that regulatory changes and political deliberations increase price volatility, thereby raising uncertainty about future revenues from renewable energy projects. Higher volatility, in turn, negatively affects the investment climate, delaying the development of Swedish wind power projects by 12%. These results suggest that regulatory uncertainty can weaken the cost-effectiveness of market-based climate policies by making conditions less predictable for investors.
Methods used: Data analysis & statistical modelling (ARMA/GARCH, structural breaks, hazard models) • Investment analysis (real options valuation, risk modelling)
Links: Published paper
