Séminaire Économie Ibrahim ABADA

Ibrahim ABADA

Professeur Associé, Grenoble École de Management
Ibrahim est économiste et mathématicien appliqué, spécialisé dans les marchés de l'énergie et la réglementation.
Ses recherches portent sur l'impact de la décentralisation et de la numérisation des secteurs énergétiques sur les marchés, sous l'angle économique et réglementaire.
Ses travaux actuels portent sur l'analyse des effets négatifs liés à l'utilisation croissante des algorithmes sur les marchés de l'électricité et sur les possibilités de régulations.

Ibrahim présentera un article intitulé : Mitigating Market Incompletness with Minor Market Distortions : The Case of Negative Spot Prices for Electricity"

Abstract : Risk-mitigation instruments are essential for fostering investments in renewable electricity-production assets and their role is all the more important in the case of market incompleteness. At the same time, such instruments may induce distortions of competition, thereby limiting the effectiveness of spot markets. An example of such an effect is the dramatic increase in negative prices observed in many power markets. Some mechanisms that protect investors from risk decouple operating incentives from spot prices, leading to inefficient trading. At the same time, those negative prices incentivize investments in storage. Such distortions have so far been overlooked in most quantitative research focused on market incompleteness. Using a bi-level programming approach, this paper proposes a framework within which to integrate market distortions when analyzing incompleteness. The lower level of the framework models the power economy via an equilibrium formulation of the two-stage investment problem under risk aversion, where agents invest in the first stage before operating in the stochastic second stage. A central planner offers a set of risk-mitigation schemes in the form of Contracts for Difference and price markups to foster investments, but these schemes can distort competitive bidding. On the upper level, the central planner tunes the design of contracts optimally so that social welfare is maximized. We provide an existence result and undertake a thorough numerical simulation inspired by the French power system, which demonstrates the potential for optimally adjusting the risk-mitigation instruments offered to electricity producers to enhance welfare and limit the prevalence of negative prices.