Reliable and affordable energy supplies are important to every modern economy. Energy economics studies the balance between supply and demand for energy and electric power, as well as the regulations and market institutions that influence energy availability, prices, and environmental impact.

The EMS Energy Institute’s Energy Economics Program focuses on two social challenges. The first is determining the mix of market and regulatory institutions that best serves society's energy demands. Historically, many governments have strictly regulated prices and quantities of energy commodities, as well as the firms supplying energy. Over the last thirty years; however, market forces have played an increasing role in supplying energy to society. The second is studying the balance between energy needs and adverse environmental impact, including air and water pollution as well as ecosystem impacts. The Institute focuses on assessing the consequences of these environmental externalities and determining the best ways for society to manage the potential environmental harms that energy utilization can cause.

Research

Electricity Markets Initiative [2]

• The Debate over Power Authorities: A View from Pennsylvania
• Penn State Uses Bargaining Power, Conservation, and Green upgrades to Save Money
• Are Competitive Markets Green?
• Non-Dispatchable Generation and Energy Storage in the PJM Market
• Restructuring and the Retail Market for Power in Pennsylvania

Rare Earth Elements Initiative [3]

Examines the impacts of China’s near monopoly on rare earth markets, green technology development and the environment, future scenarios in rare earth markets, and possible policy recommendations. Activities include economic and market data analysis, field and case studies with investigations of mining supply possibilities, and international political economy analysis.