The ESRI’s Dr Muireann Lynch researches ways to improve Ireland’s much-talked-about and under-pressure energy sector.
Currently on a research trip to John Hopkins University in the US, energy economist Dr Muireann Lynch is engaging with electricity market modellers, with the aim of bringing insights back to the Economic and Social Research Institute (ESRI), where she works as a senior research officer.
The ESRI is an independent Irish institution that produces research to inform public policies to “support a healthy economy and promote social progress”.
After completing a primary degree in maths and economics at Trinity College Dublin, Lynch undertook a PhD in engineering at University College Dublin where she applied economics principles to engineering modelling techniques.
Tell us about your current research.
As an energy economist, there are lots of areas that I contribute to. Economics research can be thought of under many different lenses, but one way of categorising economic research is as ex ante or ex post.
Ex ante research asks what will happen or what should happen, before the fact. Examples include asking what will happen to investment and employment if a new trade deal were to be signed between two countries, or what will happen to equality if a new tax is introduced.
Ex post research asks what happened, after the fact. Examples include asking what the impact of minimum alcohol pricing was on alcohol consumption or what the impact of new grading schemes was on university course choice.
My research is primarily in the ex ante category. I started out using mathematical models to examine the impact of interconnection on investment in renewable generation.
I use similar methodologies now to examine long-run investment in the power system: what do data centres do to emissions or what does renewable subsidisation do to hydrogen production?
Broader suites of models can be used to examine optimal market design: how do we operate our electricity market to accommodate high levels of renewable generation or mitigate high fossil-fuel prices or reduce variability and risk?
All of these questions use historical data to parameterise the model, but they are all projecting into the future: what will happen, what should happen or what should we do now if we want something to happen in the future? As such, they use ex ante modelling.
In your opinion, why is your research important?
Investment in renewable energy is exploding, and the Ukrainian war and subsequent energy price spikes have shown us how important electricity market design is.
Renewable generation is not going away any time soon, and yet it poses technical and economic challenges. Designing markets to accommodate this generation at least cost to the consumer is an unsolved problem.
I would love to see policymakers and market modellers take some of the technical challenges more seriously and incorporate findings from market modelling into their market design policies.
The issue of energy supply is highly topical with growing numbers of data centres and concerns about increased pressures on the grid. Is this concern warranted?
It’s important not to conflate supply and demand. Ireland has had problems ensuring sufficient power plants to meet our demand (although we did not face blackouts, as we had feared).
The key question though is whether the demand was predicted – I argue that it was. Power systems should be able to secure enough supply to meet predicted demand (we can’t be expected to meet unpredictable demand) and the fact that this was in doubt is of concern.
On the other hand, data centres are making up a rapidly growing portion of electricity demand. This means higher power system costs.
The key question here is whether the data centres themselves are paying their way, and whether the system operators and regulators can keep up.
Increased demand from any source makes decarbonisation more challenging as long as low-carbon energy is more expensive and/or technically challenging compared to the alternatives, but data centres owners can be made to cover extra costs they impose on the grid if the regulation is correct.
It’s important also not to single out one sector just because it’s big – if we’re going to differentiate between electricity users, it should be on the basis of the costs and benefits of using electricity for each set of users, not on the quantity of electricity used.
What inspired you to become a researcher?
I’ve always been interested in energy, and a summer research project made me realise how important energy economics and policy really was.
For most of my research career, my outputs didn’t generate much interest, which was fine – energy wasn’t a hot topic, but the methodologies being used were so clearly inadequate and so fun to grapple with.
When I was offered the PhD position, I wasn’t sure if it was the right move, but I figured it was better to do a PhD now than to go into the labour market and lose the opportunity. Little did I know that I was entering a field about to explode with change: the renewable energy transition, and the challenges around pricing and security in recent years, mean there is no shortage of interesting research questions, but there is also no shortage of opinions on what we should do.
Sorting fiction from fact can be challenging but it motivates me to keep producing evidence where I can – we need it more than ever.
What are some of the biggest challenges or misconceptions you face as a researcher in your field?
It is often quite difficult to separate ideology and opinion out from the established facts. The idea of a just transition is very important, but for me determining whether the energy transition is just should be based on the outcomes, not on the processes.
For example, there are ways of implementing carbon taxation in a fair manner, by using revenue recycling mechanisms, and there are ways of implementing carbon taxation in an unfair manner, by ignoring the impacts on lower-income households. However, all too often there is an assumption that carbon taxes can never be made fair, and furthermore that they don’t actually work and that subsidisation or regulation is superior. These misconceptions are simply untrue, and can be easily debunked based on the economic literature, and yet the myths still circulate.
Another challenge is trying to solve the problems associated with the energy transition while responding to irrelevant challenges that have been long solved.
For example, the fact that renewable power is variable is really not an issue – we know how to deal with that, from both a physical and a financial perspective – and yet I am told on a weekly basis that the fact that the wind doesn’t always blow is a huge problem.
There are so many challenges that renewable power is throwing up that we’re trying to solve: problems around stability, adequacy, regulation and market power. The fact that the wind doesn’t always blow is not one of them!
How do you encourage public engagement with your work?
I try to make my research as accessible as possible – the Irish people commission my research, whether they like it or not, so I think I have a duty to explain to them what I’m doing.
Furthermore, I have benefitted from academics in other fields explaining their research to me, and I am happy to do the same if possible.
There is always a fine line between making research accessible and making research simplistic – the former presents all the information necessary to get the full picture without distortion, whereas the latter can leave facts out or leave things to open to interpretation.
It’s not an easy job, but I’d rather try and fail than not try at all. I’m always happy to admit when I’m wrong, which is key for any academic researcher.
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