A Mean-Field Game Model of Electricity Market Dynamics with Environmental Policies

Explore a long-term model of electricity market dynamics using a mean-field game approach in this 33-minute lecture from Institut Henri Poincaré. Delve into the global electricity sector's environmental transition, examining the growth of wind and solar capacity and the decline of coal-based generation. Analyze the impacts on baseload electricity prices, conventional producer profitability, and peakload price volatility. Investigate the proposed model's focus on gas as a substitute for coal, extending previous research to provide a more realistic description of energy transition's medium-term effects. Compare the mean-field game approach with a central planner counterpart using mean-field control, and understand their equivalence. Examine a case study calibrated on German data to assess the impact of environmental policies, including carbon taxes and renewable subsidies, on the electricity market's future landscape.