Peter Cramton, Accelerating the net zero transition with incentives for innovation

This project addresses the critical market failures that have hindered efficient electricity investment and stifled innovation: incomplete markets, market power, and uncertainty. This research, once adopted, will expedite decarbonization. It leverages robust market designs to foster innovation and competition, bringing essential flexibility for reliable and resilient electricity in a setting with high renewable penetration. The research identifies the need to involve demand, particularly during extreme weather. Such a market significantly enhances price incentives, enabling efficient investment and operation of participants' resources. Retail consumers benefit. The result is a net-zero economy that provides reliable and resilient electricity at the least cost.