Program on Energy and Sustainable Development (PESD) Director Frank Wolak, Associate DIrector Mark Thurber, and doctoral candidate Trevor Davis led an Electricity Market Simulation Workshop as part of the 2018 Western Electricity Market Forum September 20-21 in Boise, Idaho. The audience was comprised of regulators and regulatory staff as well as policy makers representing states from across the western U.S.
The workshop used the PESD-developed Energy Market Game to explore timely questions about how electricity markets with a high share of renewable resources might function. “The Energy Market Game allows people of diverse backgrounds to understand market dynamics,” Thurber explained. “It can help policy makers and regulators set up incentives for market participants which naturally align with desired outcomes.”
The PESD team ran games with two contrasting policy approaches aimed at ensuring resource adequacy, with workshop participants playing the role of generating companies (“gencos”). In a high-renewable world, the specific resource adequacy concern is that thermal power plants won’t run enough to be profitable, and gencos therefore won’t build or keep enough thermal power plants to back up renewables when wind and sun aren’t available.
In the first game scenario, capacity markets were used to spur gencos to build enough gas-fired power plants to meet demand. Capacity markets straight-out pay gencos for holding generation capacity. They are used in a number of real-world electricity markets, but the games suggested they may not result in the cheapest power for consumers.
PESD Director Frank Wolak helps a workshop participant set up an Energy Market Game scenario.
PESD Director Frank Wolak helps a workshop participant set up an Energy Market Game scenario.
Photo Credit: Maury Galbraith, Western Energy Board
In the second game scenario, forward contracts for electricity created the incentive for gencos to build power plants. If a genco doesn’t produce enough electricity to cover its forward contract, it risks having to buy the shortfall out of the spot market at high prices. Forward contracts therefore encourage gencos not only to build adequate generation capacity, but also to bid that capacity into the market at competitive prices. As this second game scenario showed, that can mean cheaper power for consumers.
Abstract
As an increasing number of California households install solar panels, the current approach to retail electricity pricing makes it harder for the state’s utilities to recover their costs. Unless policymakers change how they price grid-supplied electricity, a regulatory crisis where a declining number of less affluent customers will be asked to pay for a growing share of the costs is likely to occur.
Women empowerment (WE) is increasingly viewed as an important strategy to reduce maternal and child undernutrition,1–3 which continues to be a major health burden in low- and middle-income countries causing 3.5 million preventable maternal and child deaths, 35% of the disease burden in children younger than 5 years, and 11% of total global disability-adjusted life years.4,5Global data show that one of the worst affected regions is sub-Saharan Africa (SSA), where about 20% of children are malnourished.6,7 Benin is no exception, as the prevalence of stunting, wasting, and underweight was 37%, 5%, and 17%, respectively, among children aged 6 to 59 months in the 2006 Benin Demographic and Health Survey (DHS),8 while 9% of women had chronic energy deficiency in the 2012 DHS.9 Greater rates were observed in rural areas where stunting was found in 40% of children, underweight in 19%, and wasting in 5%, while 10% of women had chronic energy deficiency.8,9 Additionally, Beninese women and children have a limited dietary diversity score (DDS), with diets predominately composed of starchy staples with little or no animal products and few fresh fruits and vegetables.10,11 Government, United Nation agencies, and nongovernmental organizations in Benin recognize that the state of maternal and child undernutrition requires multiple types of interventions.12
However, women’s low empowerment status in Benin can hinder the improvement in women’s and children’s undernutrition. Indeed, although females accounted for 47% of the economically active population in 2014,13 social and civil legislation is strongly influenced by tradition and customs, as women continue to be required to seek their husband’s authorization in certain areas such as family planning or health services.14 Rural women provided labor to the families’ commercial plots, were responsible for household food production and processing, and also had to work in the cooperative structures set up by the state in addition to their household tasks.14 In a more recent study of productivity differences by gender in central Benin, researchers noted that female rice farmers are particularly discriminated against with regard to access to land and equipment, resulting in significant negative impacts on their productivity and income.15 As in other areas of West Africa, women also have the responsibility of caring for children and preparing food for the household,16 but they may be vulnerable to food insecurity owing to unequal intrahousehold food distribution and their willingness to forego meals in favor of children during times of scarcity.17 Finally, no study to date has examined links between women’s empowerment and nutrition in Benin.
In addition, the evidence backing the effect of women’s empowerment on maternal and child undernutrition is inconsistent.18 Using the Women’s Empowerment in Agriculture Index (WEAI), Malapit et al19 reported positive and significant association between women’s group (WG) membership, control over income, overall empowerment, and women’s health (as measured by body mass index [BMI] and DDS) in Nepal. However, in Ghana, women’s aggregate empowerment and participation in credit decisions were positively correlated with women’s DDS, but not BMI.20 Mixed findings were also observed between women’s empowerment and child anthropometry. Moestue et al21 found a positive association between maternal involvement in social groups and length-for-age z score of 1-year-old children, but De Silva and Harpham22showed a negative association in 6- to 18-month-old children. Shroff et al23 found positive association between decision-making and child weight-for-age z score (WAZ), but Begum and Sen’s24 analysis of Bangladesh DHS data did not reveal any significant associations. Therefore, information about which domains of WE are associated with nutritional status is limited,20 and this lack of knowledge constrains the set of policy options that can be used to empower women and improve nutrition.
In addition to a limited set of studies in SSA, examinations of the effects of WE on nutrition outcomes are constrained due to interstudy differences in population characteristics, settings, or methods/conceptualizations of WE.25–27 For example, despite recognition of the complex, multidimensional, and culturally defined nature and influence of empowerment on nutrition,20,26,28,29 only a few studies considered the multidimensional structure of empowerment domains in Africa or examined the varied relationships between each measure of WE and maternal and child nutrition status.30,31 Furthermore, in 2012, the International Food Policy Research Institute developed WEAI constructed from 5 prespecified domains of empowerment,32which may not be equally relevant in all areas. In contrast, in 2015, the United Nations adopted the Sustainable Development Goals (SDG), but the specific indicators for the SDG empowerment targets are largely equality metrics.33 To address the need for multidimensional and contextual examinations of WE and its influence on maternal and child health outcomes, we draw from the concepts put forward in the WEAI and the SDGs but took an approach more along the lines of the World Bank which gathers indicators, both equity and empowerment related, that can be used in contextually appropriate ways.34 The aims of this study were therefore to first explore the structure and domains of WE in Kalalé district of northern Benin and then to examine the effects of these constructs on nutritional status of women and their children in the region.
The format of this presentation is each of the three speakers will have approximately 15 minutes to present their research. This will be followed by a short period of 5-10 minutes for any questions or comments from the audience.
In this session of the Corporate Affiliates Research Presentations, the following will be presented:
Hirotaka Ishii, Ministry of Economy, Trade & Industry, Japan
Japan's Electricity Crisis? - What Japan Should Learn from the California Electricity Crisis
Hui Liu, PetroChina
Shared Services (Center) Model and Best Practices
Rui Minowa, Development Bank of Japan
Measures to Retain Talent in Large or Medium-Sized Companies
Silicon Valley is one of the fastest-moving, most competitive economies in the world. Minowa studied some cases of successful Silicon Valley companies – comparing differences in labor customs and environment between Japan and the U.S. As a result, Minowa shares suggestions on how to retain talent for large or medium-sized companies.
Zhuoyan Wang, PetroChina
Transformation Opportunities of Oil Companies
In a recent television interview with the Korean Broadcasting System (KBS), SK Center Fellow Yong Suk Lee said that tougher economic sanctions on North Korea are not achieving their intended effects and may actually be exacerbating inequality instead. Analyzing satellite night lights data, Lee found that the North Korean regime has avoided the impact of sanctions by reallocating electricity from poor, rural areas to urban areas where privileged elites reside. To view the episode (in Korean), click here.
Lee published the research in a working paper, “Countering Sanctions: The Unequal Geographic Impact of Economic Sanctions in North Korea,” which was highlighted in a Stanford News Service article in Oct. 2014. Lee also presented his preliminary findings at a public seminar at Stanford.
Solar energy installations in arid and semi-arid regions are rapidly increasing due to technological advances and policy support. Although solar energy provides several benefits such as reduction of greenhouse gases, reclamation of degraded land, and improved quality of life in developing countries, the deployment of large-scale renewable energy infrastructure may negatively impact land and water resources. Meeting the ever-expanding energy demand with limited land and water resources in the context of increasing demand for alternative uses such as agricultural and domestic consumption is a major challenge. The goal of this study was to explore opportunities to colocate solar infrastructures and agricultural crops to maximize the efficiency of land and water use. We investigated the energy inputs/outputs, water use, greenhouse gas emissions, and economics of solar installations in northwestern India in comparison to aloe vera cultivation, another widely promoted and economically important land use in these systems. The life cycle analyses show that the colocated systems are economically viable in some rural areas and may provide opportunities for rural electrification and stimulate economic growth. The water inputs for cleaning solar panels are similar to amounts required for annual aloe productivity, suggesting the possibility of integrating the two systems to maximize land and water use efficiency. A life cycle analysis of a hypothetical colocation indicated higher returns per m3 of water used than either system alone. The northwestern region of India has experienced high population growth in the past decade, creating additional demand for land and water resources. In these water-limited areas, coupled solar infrastructure and agriculture could be established in marginal lands with low water use, thus minimizing the socioeconomic and environmental issues resulting from cultivation of economically important non-food crops (e.g., aloe) in prime agricultural lands.
Pilot program was designed to first ground students in the basics of empirical research, then provide an opportunity to apply that knowledge while conducting fieldwork in an international setting.
The Freeman Spogli Institute for International Studies (FSI) and Office of International Affairs (OIA) launched a pilot collaboration last year to provide a rigorous, immersive teaching and training program for students interested in international fieldwork. The result was a program that included a quarter-long course in the spring of 2015 followed by three weeks in Mexico during the summer to design and conduct a field research study. OIA spoke with Frank Wolak, the Holbrook Working Professor of Commodity Price Studies in Economics and Senior Fellow at FSI, to learn more about the project, titled International Field Research Training: Energy Reform in Mexico.
While students at Stanford have many opportunities to pursue independent research projects, they rarely have the opportunity to receive first-hand training in conducting interviews, research design and field implementation. With that in mind, we set out to design a program that would carry the students through the basics of empirical research and then give them the opportunity to apply that knowledge under close faculty supervision. Taking students out of the classroom and giving them the opportunity to see textbook methods in action is invaluable.
Our hope is that this training equips the students with the academic and logistical skills they need to execute their own robust research, be that for an honors thesis, a capstone project or an advanced degree.
The Stanford course taught the basics of the design, implementation and interpretation of social science field research. Building on a basic knowledge of statistical methods and economics, the course first introduced observational field research and compared it with experimental field research. Significant attention was devoted to explaining what can and cannot be learned through each type of field research.
Topics covered included sample size selection, power and size of statistical hypothesis tests, sample selection bias and methods for accounting for it. Examples of best practice field research studies were presented as well as examples of commonly committed experimental design and implementation errors. Practical aspects of fieldwork were also covered, including efficient and cost-effective data collection, data analysis, teamwork and common ethical considerations.
After completing the quarter-long course on statistical research methods, the students, under the guidance of the Program on Energy and Sustainable Development's research team, adapted an education-based research intervention for the Mexican electricity sector. The purpose was to see if providing individuals with information about how their energy bill was calculated and simple ways to reduce household electricity consumption would cause household energy bills to go down.
Research was carried out in the city of Puebla, a city of 1.5 million people about 150 kilometers (93 miles) southeast of Mexico City. The Stanford students collaborated with students from the Universidad Popular Autónoma del Estado de Puebla (UPAEP). For the first few days, the students all met at an UPAEP classroom space to design and review the survey tool, making revisions and conducting practice interviews.
Once oriented in Puebla, the students set out daily in research teams to interview randomly selected households in middle-income neighborhoods in Puebla. The students branched out from a central meeting place in teams of three, pairing two Stanford students with one UPAEP student.
In the field, the students all wore nametags and UPAEP baseball caps to make themselves identifiable as surveyors to households. They worked in the field for eight to 10 hours a day, taking about an hour break for lunch. In the first few days, they were able to collect 15-20 surveys a day, but as they became more comfortable with their pitch and knocking on doors, they were able to increase their yield to a high of 44 surveys in one day. At the end of two weeks, they completed over 260 surveys in just 10 days of fieldwork.
The students were also active on social media documenting their daily activities. For more on the student perspective, their activities and impressions of the project, check out their blog on the FSI website.
There are a variety of situation-specific problems that are hard for any researcher to know fully without being immersed in the field. For example, one of the students' recommendations to improve energy efficiency was to switch household light bulbs from incandescent to compact fluorescents (CFL). This is a valid recommendation in the United States where most people still use incandescent bulbs in their homes, but – surprisingly to the team – most of the people interviewed had already converted to all CFLs in their home.
I was amazed with the students; the level of intellectual curiosity and engagement was impressive with ongoing discussions into the evening at times. The students were not only getting an in-country immersive experience while conducting research, but they were also developing critical thinking skills along the way.
Research aside, the in-country experience gave the students a keen understanding of how local residents live. The methodology employed for gathering data allowed the students to connect with many types of families, ranging from senior citizens living alone to multi-generational families living under one roof. Through direct contact with the community, the students developed an understanding of the local culture and learned local customs.
At FSI, we have a great wealth of experiential knowledge on conducting field research all over the world. In addition to consulting with faculty and research managers at FSI, OIA had been enormously helpful in connecting us with resources across campus and facilitating some of the trickier logistics, such as processing stipend payments to our international collaborators and navigating the human subjects approval process. OIA was also able to discern that Puebla was a viable option as a research site.
The pilot program exceeded our expectations in the best possible ways. Much of its success was due to the work of Elena Cryst ,'10, program manager for FSI's Global Student Fellows Program, who also accompanied us on our trip. She was an invaluable team leader and organizer and worked tirelessly to ensure that both the research and logistical aspects of the trip ran smoothly.
We will definitely be offering the field research course and research project again. We hope to go to another part of Latin America next, such as Chile or Colombia. We are also still active in Mexico, with three of the students that went on the trip working for us as research assistants this academic year, analyzing the data as it comes in and developing a self-administered online version of the survey instrument with which we hope to reach thousands of households in Puebla.
In addition, Elena will be using our experiences from the Mexico pilot to inform other FSI field research programs in China, Guatemala, India and potentially new sites for next year.
This article was originally published in The Stanford Report on October 27, 2015.