Christian Kaps

In this study, we investigate households’ investments in behind-the-meter battery storage alongside rooftop solar and examine the effects of these batteries on consumers, the power market, and environmental emissions. We develop a structural estimation model of residential electricity usage that separates observed demand and consumption preferences and lets us estimate a nonfinancial utility that households may have for using self-generated solar power over grid-procured electricity. We call this utility nonmarket valuation, provide evidence that it is driven by sustainability and autarky desires, and relate it to the early adoption of residential storage. Applying this model to a novel data set of German households, we find that the median household has a nonmarket valuation of 0.29€ per kilowatt hour (kWh). We then show that owning storage increases a household’s electricity demand (storage rebound) and marginally increases the emissions by 57 kg CO2/year/kWh of battery capacity. However, batteries may reduce emissions if solar penetration in the grid is sufficiently high. Lastly, we estimate that, at future technology costs, 2023 European electricity prices, and without subsidies, investing in storage is optimal for 54% of households, which would reduce the residential grid load by 38%, but, counterintuitively, also make it more variable.

Globally, 1.5 billion people live off the grid, their only access to electricity often limited to operationally-expensive fossil fuel generators. Solar power has risen as a sustainable and less expensive option, but its generation is variable during the day and non-existent at night. Thanks to recent technological advances, which have made large-scale electricity storage economically viable, a combination of solar generation and storage holds the promise of cheaper, greener, and more reliable off-grid power in the future. Still, it is not yet well-understood how to jointly determine optimal capacity levels for renewable generation and storage. Our work aims to shed light on this question by developing a model of strategic capacity investment in both renewable generation and storage to match demand with supply in off-grid use-cases, while relying on fossil fuel as backup. Since the exact model is intractable, we develop two newsvendor-like approximations that are analytically tractable, yield precise values for the optimal investment decisions and profit in some cases, and provide bounds to the optimal investment decisions and profits in all other cases. We use these approximations to obtain additional insights into the problem. First, we find that solar generation and storage capacity levels are strategic complements, except in cases with very high penetration of either technology, when they surprisingly turn into strategic substitutes, with implications for long-term investment decisions. Second, we develop a simple heuristic to determine which technology, within a given portfolio, can turn a profit in the broadest set of market conditions, and thus is likely to be adopted first. We find that currently, low-efficiency, cheap technologies such as thermal can more easily turn a profit in off-grid applications than high-efficiency, expensive ones such as lithium-ion batteries. To conclude, we calibrate our models to measure the accuracy of our solutions utilizing real-life data from three geographically-diverse islands, and then use our approximations to provide high-level insights on the role that large-scale storage will play in the years ahead as technology improves, carbon taxes are levied, and solar becomes cheaper.

In this paper method and practice of cross-efficiency calculation is discussed. The main methods proposed in the literature are tested not on a set of artificial data but on a realistic sample of input-output data of European warehouses. The empirical results show the limited role which increasing automation investment and larger warehouse size have in increasing productive performance. The reason is the existence of decreasing returns to scale in the industry, resulting in sub-optimal scales and inefficiencies, regardless of the operational performance of the facilities. From the methodological perspective, and based on a multidimensional metric which considers the capability of the various methods to rank warehouses, their ease of implementation, and their robustness to sensitivity analyses, we conclude to the superiority of the classic Sexton et al. (1986) method over recently proposed, more sophisticated methods.

In 2025, Southern Company faced an inflection point as electricity demand in Georgia surged at its fastest pace in decades, driven by hyperscale data centers, manufacturing growth, and electrification. CEO Chris Womack and his leadership team had to determine how to meet projected load growth equivalent to adding ten nuclear reactors—while balancing cost, reliability, speed, emissions, and regulatory scrutiny. Following the costly and delayed completion of the Vogtle nuclear expansion, the company confronted difficult trade-offs: expand natural gas capacity to meet near-term demand, pursue additional nuclear investment despite construction risk, or adopt a diversified "all-of-the-above" strategy. As Georgia Power prepared its updated Integrated Resource Plan for state regulators, Southern had to decide which technologies to prioritize, how to allocate $70+ billion in capital, and which risks—financial, political, operational, and reputational—it was willing to bear in powering the region's future.

Hurtigruten was deciding whether the next ship they built should be fully electric. But such a vessel's battery, the size of electric cars, needed to be charged on the ship's multi-day voyage along the Norwegian coast. Before making such a $250 million investment, the company needed to understand where en route it needed charging infrastructure and how it could access sufficient power at ports. These considerations had to be balanced against the uncertainty around the government's emissions targets for Hurtigruten's fleet, and customers' desire for sustainable tourism.