 So in a case in the name of the scientific committee, I would like to, and the local organizers, I would like to thank you all for being here today and to have accepted to participate. So without further ado, let me introduce Peter Crampton. I'm not going to introduce Peter Crampton as usual, you know, as those things go, you know, it doesn't need any introduction. He's from the University of Cologne, half time University of Milan. He's going to talk about renewable energy and electricity market design. You all know his work, you know, in areas like auction, for example, and market design, where he's done pioneering work. But I still remember little Peter Crampton when he was a student at Stanford working on bargaining. He has done lots of things, not only auction theory and market design, but when he was young, for example, he was working on bargaining, he was working on dissolving partnerships, he was working on things like that, which was also fascinating. So he has a, I'm not going to go through his CV because I think it's much more interesting to listen to him. And Peter, for your keynote. Thank you. Thank you very much, John. It's a great pleasure and honor to be here today. And I am going to talk about electricity market design and especially focusing on the, whether the electricity market design that we have today, at least the best designs, are robust to large shares of renewable energy. And if not, what needs to be done as these markets evolve, as they will. As you all know, the electricity landscaping is in a transition. It will transition, I'm sure. The only question is how long it will take. But we already see it. Some countries are much more, much farther along than others. But the whole world is moving towards large shares of renewables and the market design needs to work well in that environment. So when talking about market design, let's see. I always start with what's the goal of the market? And electricity, the goal is straightforward. Reliability, reliable electricity at least cost. And I split it into two forms of efficiency, short run efficiency, making the best use of the existing resources and long run efficiency, getting the right mix and quantity of resources. And both are very important. I'm gonna focus first on short run efficiency and then on the more difficult task of long run efficiency. But the reason I do that is that short run efficiency is a necessary condition for long run efficiency. That is the place to start. Without short run efficiency sending the right price signals in the spot markets, one can't have long run efficiency. So electricity is a very interesting environment to work in. It's also a very challenging environment to work in. We have to balance supply and demand at every instant. We have literally thousands of transmission and resource constraints that have to be managed. And we have shocks in supply. The transmission lines can fail, the generators can fail. We have an increasing share of renewables which the sun might not shine, the wind might not blow. And we have to accommodate all those things. We also have to recognize, at least historically, the demand side has not been responsive. The demand side has generally not seen or felt the spot price. And so we've treated demand as completely inelastic. And all of the adjustments have been done on the supply side. In the new world, and we're already moving well along in that, we're going to have much more robust demand side. So we'll have demand response. We already have it with industrial consumers. And we have it with some retail consumers. But we're going to have to get the demand side much more involved in order to have proper price formation and efficient markets going forward. And so once we move to more of a two-sided market, things will work much better and make it a lot easier to withstand a very high share of intermittent renewables. The final wrinkle that we're having to deal with is climate policy. Climate policy has been less than optimal in, I think, every country in the world and certainly globally it's been a disaster. And this has made the long-run investment opportunities problematic in the electricity sector. And I'll talk a bit about that later on. But certainly, and I'll talk more about climate policy at the end. So what is a successful market design? And I'm going to be a little bit US focused here and perhaps US biased in favor of the market design we've evolved to there. And in fact, I will, as my lead example, will be the Texas market, ERCOT, because I'm very familiar with it. I serve as an independent director on the board of ERCOT. And because it's going through a lot of adaptation that is quite relevant for the rest of the world. So as I said, the foundation of the electricity market is the spot market. You have to get the right prices and the right resources generating. In real time, but this is supported in the US by a day head market for scheduling and unit commitment followed by a bid based security constrained economic dispatch. And that foundation then provides a good landscape for extensive forward trading, which is essential for managing risk and improving the performance of the electricity market. So let me go into a bit more detail. The day head market is, as I said, we schedule all the resources, make the unit commitments and determine the prices on a day head basis. The day head market is purely financial. So the resources can do different things in the real time market and often do, but the day head market sets the right incentives for people to perform in real time, largely consistent with what happens in the day head. But of course, stuff happens and the real time provides the opportunity for all the adjustments, which is really great. The market includes the possibility of three-part bids where resources can express their startup costs, their minimum energy costs, and then their marginal costs, their energy offer curve. And we'd allow, as in pretty much all the markets, virtual offers and bids, which are very important for arbitraging between day head and real time. So that's proved to be quite important. The objective is to maximize social welfare subject to all the constraints. We co-optimize energy and reserves in the day head market, and then in the best markets, this is also done in real time. Texas is actually just introducing real time co-optimization of energy and reserves. So the market's re-optimized throughout the day. And what's produced is competitive equilibrium prices, the locational marginal prices that represent the marginal contribution of each resource at each location at every time. The handling of the non-convexities is important for certain types of units. Certainly it's not important for the renewables, but it's important for the combined cycle and the other gas units and certainly coal units. And it's not so important for nuclear because you've made your decision long ago about whether you're gonna be on. But it is handled well. One of the nice things about allowing the three-part bids is then the resource can offer its true economics, if it's, say, a combined cycle or a coal plant, and that's helpful in automatic market mitigation in the event that there isn't competition because of transmission constraints, for example. That information is needed in order to optimally schedule the resources in any event to the extent that they're bidding consistent with their true economics. It's pro-competitive in that a small generator with just a few resources would have difficulty optimally scheduling those resources. They wouldn't have the information. A large dominant incumbent has a large enough fleet they probably can do pretty well scheduling on their own. But the small guy actually needs the system operator with much better information to optimally schedule the resource. And then it also creates an ability to hedge the real-time price volatility for the small guy, which is very important. In Texas, the day ahead market is voluntary, so not everybody participates in it. About a bit over half of the market does. The system operator still needs to know what the plans are in order to manage the system. And so all the resources submit their plans and can adjust those plans throughout the day up to one hour before the beginning of the day. And the system operator might find that they have to, on actually rare occasions, have to commit some additional resources for reliability. And so that is done very close to the last minute. And when that is done, so as not to interfere with the market, that those resources are offered at a very high floor price of $1,500. I've already mentioned the need for reserves to handle flexibility. And these reserves are in Texas are two forms of regulation up and down. And then responsive reserves that are online and the non-spin reserves that are offline. These, the quantities that are needed change from time to time as the system changes and the resources change. And this is an area where when you introduce lots of renewables, you're gonna need more changes because you need more flexibility. And in fact, in the extreme, you may need to introduce new products. For example, right now there's a large surplus of inertia. So inertia isn't something that is valued today, but if we had an enormous amount of renewables that did not have inertia, then inertia might be an ancillary service that needs to be introduced. In terms of cost, these reserves are actually a very important part of the economics of certain units that have these capabilities. So it's very important that the pricing for the reserves reflects their marginal contribution to the system. In terms of overall cost to the consumer, it's actually fairly small. So for the resource providing these reserves, the reserves are priced at, no, no fuels involved and they're priced around $10. So that's significant, but for the consumer, the reserves are maybe in this last year, they were $1.60. So it's a fairly modest cost for having these reserves, which are essential to keep the lights on. The real time market, as I said, security constrained economic dispatch. So we, it's run determining prices on a five minute basis. And now we're both financial and physical. But one of the wonderful things of the electricity market done in this way is we have this great device for settling forward positions in a perfectly efficient way. There is lots of liquidity in both the day ahead and the real time market. Everything goes through the real time market. The day ahead market is, as I said, it's between 50 and 60% of the energy is bid through the day ahead market. So it certainly has, even when it's voluntary, it plays a very big role. And we do get the price convergence between day ahead and real time that of course you would expect. Day ahead prices might be slightly higher because of loads desire in reducing real time risk. When looking at market performance, it's always good to look at the system under a bit of stress. And in Texas, that stress comes in the summertime. It's very hot. There's lots of air conditioning. And so this is actually the summer of 2017. The load is the gray at the top and I display the day ahead price in orange and the real time price in blue. And you can see the real time place much more volatile. And one of the things that's interesting is right over here where the load drops off at the end of August. What's going on there? Well, it turns out that's hurricane Harvey. And you see there's a blip in the day ahead price. And that's because a very bad thing happened. This nasty hurricane arrived and created some real risk that there would be serious disruption in the electricity market. And there was a fair amount of disruption. But nonetheless, the market worked out just fine. You can see the real time prices never spiked. And in fact, the wholesale market worked perfectly throughout this event, which was a extreme event. Texas received 52 inches of rain over a five day period, over a meter and a half of rain. Incredible winds, 42,000 lightning strikes, transmission lines down, as you can see, there's lots of distribution that was down and substations under several meters of water. So this was a big event. But throughout this event, the wholesale market just kept chugging along, doing what it does, setting the prices, establishing the prices based on the bids in order to operate the system and keep as many lights on as possible. Now, certainly many people did lose electricity, but as you saw from that drop in load, it wasn't everybody, it was just some, and then they were brought back online fairly quickly. So that's a good outcome. One element that I think is very important in the Texas market, and I believe should be an element of all markets, until there's robust demand participation, is shortage pricing. So the shortage pricing is an administrative construct which recognizes that reserves have significant value in times of shortages. That's what it will keep the lights on. So it's this ability to avoid load shedding that is valued, and the marginal value of reserves then is going to depend on the value of lost load and the probability of lost load. And of course the probability of lost load as you start to run out of reserves approaches one and you start shedding load. And that is what we use in Texas as the means to send the right price signal during times of extreme scarcity. The way I think of it is it's the system operator, the regulators representation of the consumer's preference for reliability, because right now consumers can't express their preference for reliability. Eventually we'll have robust demand side bidding, which and participation, and there will be no possibility of shortage because the consumers will simply say that at this price I don't want as much, but we're not there yet. So this is what the curve looks like, and the value of lost load in Texas for many, many years has been $9,000. So it's a big number, but perhaps maybe not high enough, but it kicks in at higher reserve levels, begins to kick in because of a increasingly significant probability of lost load. Now in most of the recent years, actually this operating reserve demand curve hasn't played a very big role in terms of the economics. It has played a big role behind the scenes because it's that possibility of those very high prices that has motivated a lot of forward contracting. So that's been a very positive thing. So having that, it's basically this extremely useful device that when it's working perfectly, it's actually rarely utilized, but when the market gets tighter, when the reserve margin falls, as it did in 2018, it starts to become significant. So here's the revenues coming from the operating reserve demand curve in green there. And it's gonna be significant in 2019. You'll see our reserve margins are even lower. So the importance of these forward contracting, it's really is essential to have the market work well, especially in times of stress. The California energy crisis in 2000, you'll recall, was largely caused by the absence of forward contracting on the part of the utilities, which had them go bankrupt then very quickly when there was a period of scarcity because of a lack of water and heat in California. And so the market failed when one side of the market can't pay their bills. Forward contracting avoids that, reduces risk, the generators have the generating, the generators and the fuel contracts to provide a physical hedge. And then for the consumers, it provides a hedge against the high prices during real time. And as I said, the shortage pricing really does motivate extensive forward contracting, which we see a great deal in all the well-functioning markets, Texas included. And the forward contracting also greatly improves the bidding incentives, which is very nice. So the exercise of market power becomes much less of a problem when parties are in balanced positions. They have no incentive to exercise market power. This indicates actually a lower bound of the amount of forward contracting hedging by load from the real time price. It's just based on the contracts that are run through ERCOT. And you can see that only about 10% in those summer months is unhedged for load. So very, very small quantity unhedged. And it's probably much less than that, given bilaterals that they hold. The forward contracting also provides a very good price signal, which motivates good incentives for behavior. So if we look at right before last spring, before the 2018 summer, you can see in green here, the August forward peak forward going very high. And what that does is it basically gives people the expectation that prices may be very high in August. And so the folks plan ahead. And so what they're doing here, so these are outages, planned outages, in orange and green, where they're getting their resources all tuned up so that they're going to be available in the summer months. And this is exactly what we had happen and there were no problems last summer, despite the fact that there was a very low reserve margin under 10% last summer, which was the lowest it's ever been until this year. And this is the low, this is, I'm sorry, the resources available to serve load. This is the unavailable wind. And so you can see how spiky once you add, this is, and at this time we have 19% wind. So you can see how spiky load is in a world with even 19% renewables. And you increase that by a factor of four and it's gonna look much more spiky. And you're gonna need a lot of other resources that are gonna step in. So let me turn to investment. That was a broad brush of the spot market which supports the forward contracting and then the forward contracting supports long run investment. Well, if we look at the Texas market over the last many years and look at the energy, I'm sorry, the net revenues that a combustion turbine would get from the market, you can see compared to the estimated cost of new entry, which is about $90, there was just one year, 2011, where the market would support entry by a new combustion turbine. And this was an unusual event. 2011 was the worst summer in history. So 150 years of data collection, there was no summer like this and in fact the winter was really bad too. So it was a nightmare year for electricity and through this period, there was actually a very high reserve margin. And so no, it's not surprising, this is sort of the market working that the energy price is low and they're not making a return and now things are starting to move upward but they've got a way to go if we wanna have entry from combustion turbines. There isn't actually many combustion turbines being built in Texas except at particular locations where they might be especially valuable because of our locational pricing. So here's the net revenues for a combined cycle unit and you get a similar picture. They're making more money, yes, but they're also more expensive to build. More like $110 and so they're also losing money. And if we look then at other locations, other technologies, solar and wind, everything's pretty much the same. Certainly if you're building a gas unit in the West, a combined cycle actually is doing really well in the West in this last year and that's because the West, the gas price is incredibly low. In fact, this spring we went multiple weeks with a negative gas price. So that's really heaven, running your combined cycle with a negative gas price. And but still it's extremely low in the West because of the difficulties in transporting all the gas that's derived as a byproduct from in the fracking for oil. So when more transmission is built, gas pipelines are built then that'll turn around. Solar and wind, their economics seems to be similar and but their costs are coming down as I will show and as you know. And so this is the situation in Texas now and looking forward. What we have is a reserve margin in this year, 7.4%, which is historically low. It's never been this low and we will see how we do this summer. Fortunately, the weather this summer does not look to be like 2011. It's going to be a much more temperate summer and all likelihood. So there's some chance that will avoid too many emergency events but that certainly is a possibility. In terms of what's being built, it's basically the same in the future years. It's the same as what we've had for the last several years. Wind and solar is being built and a little bit of gas. And that's what's been happening in Texas for the last many years. We haven't built coal in a long, long time and in fact it's coal retirements that we're seeing and quite a bit of them. So last year over five gigawatts of coal retired. That's about 8% of the system and this year we're having more large coal retirements. So the solar and wind is replacing the coal units and that's a great thing. It is and it's happening fairly quickly but still as you'll see it's taking a while. Now one thing the Texas market doesn't have is capacity market. These cost markets in the US because of the bad economics of entry they also have a similar picture to Texas. They're not getting the investment. Texas is getting pretty robust investment and it's really the departure of these large coal units that's leading to the low reserve margin. But on the East Coast where the investment incentives, investment challenges are perhaps greater. They found it necessary to introduce the capacity market to maintain adequate resources and it's taken them a long time to get the capacity market right. And I think that they've moved fairly close. I think the big challenge for long run investment actually in the US is this chaotic climate policy which is really messing things up. But the elements of a good capacity market that we see in these East Coast markets are that first it's conducted many years in advance so that new entry can compete. The product is defined as the ability to deliver energy during shortage. There's very strong performance incentives. Your selling capacity leads to a financial obligation to provide energy during shortage hours. And that provides a nice hedge for load and it also provides nice motivation for the generators to be there that are offering capacity. So the early markets got all of those things wrong but the current markets have them right. And the benefit of the capacity market is this coordinated investment to ensure adequate resources. When we look across the markets in the United States, you can see ERCOT's there on the left, the East Coast markets with capacity markets it's 2017 and 2018 are on the right. And you can see the capacity market is a significant portion of the economics. You can also see that in all the markets we're actually still below the cost of a turbine except potentially in New England. So now let me focus on the transformation to renewables. And this actually, the next picture I'll show is one that Paul Joskow showed four years ago in 2015 in this very room. And it looked very much like this except we hadn't had this uptick here. So he presented a fairly gloomy picture. He gave the world an F on its accomplishments and climate policy and explained how we had to turn the corner and start moving down substantially and that remains true. So the world is doing a terrible job overall. This is the world, this is not the US or Texas, this is the world. And it's, something's gotta change. But we are making, you know, at this stage I think we can, there is some cause for hope but it's not gonna be easy. One of the causes for hope is the substantial reduction in cost of renewables, especially solar photovoltaic has dropped enormously and onshore wind has dropped enormously. The, now if this would keep going that this would be amazing but it won't keep going. These are fairly mature technologies and that have been developed a great deal and so we can have very modest improvements but unless we shift to some radical new technology it's very unlikely that they're gonna be able to have the kind of price reductions or cost reductions that we've seen over the last 10 years as we flew down the learning curve for wind and photovoltaic. So, you know, those are the technologies of now and they are relatively inexpensive and they are being built. So in the US, this is the picture, for 2019 you can see in yellow we're building a lot of solar in places where the sun shines, which is actually very nice and we're building a lot of wind where the wind blows and we've got some gas, almost all of it very nice combined cycle units being built as well. And that's replacing the retiring coal and some retiring nuclear and there's some old gas plants too but it's mostly the coal and the nuclear that's vanishing. So this and another piece of good news is the capability of these new resources that are being built. The solar and wind are both improving in terms of capacity factors. The gas is, the new combined cycle units are incredibly efficient and incredibly flexible. They start more quickly, they can ramp. So we're building units now, 1200 megawatt plant that can ramp 100 megawatts a minute. So that's pretty good. In 10 minutes it can go up a gigawatt. And that's the kind of flexibility that's gonna be enormously valuable in this future world with a very large share of renewables. So throughout the US, despite the fact that we have no, I mean, what's our climate policy in the US? Trump is subsidizing coal. He's doing everything he can to make dirty, ugly coal big again. He uses some other words, I can't remember what they are. But that's our policy. And what's happening in Texas? Texas is not the environmental state of the union. It is, in fact, but what's it doing? It's a leader in wind and eventually California is the leader in solar, but solar is being introduced in a big way in California. So despite our climate policy, the economics are driving everything. And the economics are exactly what you see here. This is all driven by economics. Granted, there's still some remaining subsidies for wind and solar, but it's basically the economics of these resources which are now very nice. And so that's good. The challenge is these resources are intermittent. So there's a lot more uncertainty. There's, if we think of wind and solar, they have zero marginal cost. And so you have to be a little concerned about price formation if you're gonna rely heavily on the supply side for the price formation. Now, in fact, the supply side will help with price formation. In particular, the storage units will be bidding opportunity cost of their limited storage capability. And so that's going to help. And of course, the gas units also will have a significant marginal cost that will contribute to price formation. But we're going to have to have the demand side involved in price formation down the road. Certainly when we get up to 80% renewables, absolutely. This is some good news about wind. This is back to Texas. And you can see all the wind that's come in and the capacity factors this year of the, or the past year, 2018, of the wind resources. And you can see their capacity factors going up, up, up. This coastal wind actually is especially interesting because the coastal wind is most valuable to the system. The wind tends to blow on the coast during the summer peak. And so that's very nice. And so that's displayed here. So this is the summer peak, a day in the summer peak. And so we experienced the peak here in these hours. And so you can see that the coastal wind in red here is just ideal. It follows the peak nearly perfectly and solar is tremendously valuable too. So Texas is actually very well suited to accommodate a large share of renewables. Plus the fact another feature of renewables like wind and solar is they require a lot of real estate. And Texas has a lot of real estate, so cheap real estate. Lots of land and that helps a great deal too. So a place like Texas is really, should be leading the charge. If these, and of course if there was a carbon price, then this transition would happen much, much faster. But you can see that the rest of the wind outside of this coastal and red, the rest of the wind is negatively correlated with peak. And so it's not doing so well, but it does have a higher capacity factor than it used to, so that's good. In terms of the energy mix, overall you see 19% coming from wind now and that's going up. Coal, we've been dropping coal plants right and left. Coal is still producing 25%. And this is sort of the problem if we look at the next 20 years. These plants have lives of 20 to 30 years or more and it's hard, without a significant carbon price, it's hard to drive them off the system. So coal is dying in the US and especially in Texas with a low gas price, but if you're in a place where the gas price isn't so low then like Germany, then you need something more to push coal away. And that would be a carbon price. The other thing you notice is, things don't change very quickly. Even though all we've been doing is introducing wind and solar, solar doesn't even appear on the, I mean it's in this other category, it's less than 1%. And wind has come up enormously, but it's still, it's gonna take a while for us to get to 80% renewables. So what are we gonna need? My view is actually the core design works still quite well and that given that we're not gonna jump to 80% renewables we're actually gonna have some time to make the improvements needed to make the market design work. And what we need is we need to have a lot more flexibility to reward that flexibility based on its contribution. So that's the task and the best markets actually do a pretty good job of that. But we're going to have to get the demand side more involved with, for example, smart homes. And we're going to have to have more storage. In the US the economic storage is lithium ion batteries today. Hopefully some day storage will be less expensive but and I'm sure it will be. That's still, that's lithium ion is fairly mature but we can still expect some modest price reductions there. Whatever we do it's gonna be done better if it's done with efficient price signals. Price is an incredibly powerful instrument which will to affect investors decision making which is what this is all about and consumers choices as well. So we need to send efficient price signals. We are going to have more and more locational issues so the benefits of nodal pricing are going to be stronger than ever. As soon as you have this intermindency it can happen in fairly strange ways and that's why I can say with certainty that there's going to be more benefits from nodal pricing. Nodal pricing works, it works quite well and someday perhaps even in my lifetime Europe will have nodal pricing. It probably is a 30 year project so it's unclear whether I'll be around but we'll see. I can be optimistic. My view is that pretending there's no congestion just doesn't work. Germany is a very good example of that. There's one German price and no matter what and what that has led to given the large introduction of wind in the north and load in the south and insufficient transmission is re-dispatch costs of 1.5 billion euros last year. That's a lot of money, that's serious money. I remember many years ago when Texas was debating nodal they had a zonal system and they said that well when the re-dispatch cost gets up to 25 million then we'll switch to nodal. So this is dramatically higher than that. Texas is about the same size as Germany electrically although much smaller in population. Shortage pricing is going to be increasingly important as well. That's what's going to give the storage units the reward that they need and other units that can bring that flexibility. That's what's going to motivate that 100 megawatt ramping rate of the combined cycle plants. So very important. Just an example to get the demand side involved. One thing you can do, some markets have in fact most markets pretty much all markets where they have retail competition will have a default contract for those that don't decide on a provider. And one can make the default contract that right now the default contract is a fixed rate. You pay the same fixed rate regardless of what the spot price is. An alternative which would be far superior is one which exposes the consumer to the spot price on the margin. That doesn't mean we have to expose them to the spot price, expose them to enormous risk from the spot price because the system operator can buy forward on their behalf their expected consumption. And so we can actually have a device like this that lets the consumer see and feel the spot price or at least the consumer's devices and algorithms and that can be a very positive force. Of course the consumer can opt out of it and get the flat rate if that's what they want but this would be a big step forward. And but it is a big step. In Texas we do actually have a retail contract that is the spot price which is kind of neat. I don't know what percentage select that but it's perfectly reasonable for consumers to pay prices. And of course we're gonna have to get the locational pricing on the demand side as well. So even in our nodal markets, the demand side there's still lots of aggregation and with distributed energy resources and the like we're gonna have to do more of that. Now coming back to climate policy and the challenges for long run investment our climate policy in the US and throughout the world really is characterized as incoherent and unstable I think and we need to do better. If you're thinking about building a power plant anywhere a first order concern for you, you're looking at the revenues that the resource is going to be able to receive over its lifetime which may be 30 years. A first order importance is what the carbon price is. So everybody that's investing in Texas or anywhere else is thinking about what the carbon price is in those future years. And what sort of information are we giving people about that carbon price? Well our politicians are giving them very poor information and in fact I still think that the best hope and the best path forward is to negotiate perhaps among just a few countries a significant carbon price, price path going forward. And that in fact is the most viable plan in the United States which is the carbon dividend plan which is pending legislation in the house with I think 45 congressional supporters in both parties. And this is very simple. We have a carbon price that starts out fairly low, goes up rather quickly. Each year until our goal is met, revenues are rebated back on a per capita basis. This is very nice. This makes about 70% of the population better off financially with the carbon dividend than without it. And at the same time we can replace many inefficient regulations, lots of inefficient subsidies that like our subsidies for coal and all sorts of things and various command and control provisions that are very inefficient. And finally and this is actually the very important element is a carbon border adjustment. And I say for reciprocity. And essentially the biggest reaction against carbon pricing is first people using the evil word tax. But second is that there's a big view as Trump has articulated why should we do something when China's not? So it's all about reciprocity is hugely important. And this is something that and so the carbon border adjustment addresses that. It basically says well you've got goods coming into the United States and if you're not gonna collect the carbon revenues we will. And that's a very strong motivator for them to collect the carbon revenues. And so I think that that will provide a good basis for negotiation but we will see. The challenges are great. For me this would be something that's very much actively talked about in the United States. Certainly the support among economists is universal. There's literally thousands of economists including every Nobel Prize Chairman of the Council of Economic Adviser, Treasury Secretary, everything supports it. In the United States the population does as well. Four to one, two to one among Republicans, four to one among Republicans under 40 which is good and seven to one or actually 16 to one among Democrats. So there is quite a bit of support. Something like this would help out investors in the electricity sector enormously. Now another idea that I have is that the electricity sector and this has been exploited before, that the electricity sector is actually relatively easy to do in terms of effective carbon climate policy because it's so well controlled and measured. Something that Jean has emphasized, the difficulties in measuring when using a carbon price approach but in this case measurement is fairly straightforward and so to get the ball rolling it might make sense at least to negotiate with respect to the electricity sector and then as we've seen in other market design applications that good idea, it's seen how powerful and effective it is, it leads to a snowball effect and expands into other sectors. But of course the first best would be to apply it to all sectors or nearly all sectors. So with that let me conclude early so that we'll have time for questions. I think that electricity market design is a very good example of market design. We've had a lot of development. It's a market where you have to get it right or the lights go out so you have to get it right eventually or either the lights go out or it's really expensive and we're actually seeing a bit of both taking place. But the best markets are running very well especially the spot markets, highly efficient. We do have lots of forward contracting which is wonderful and we have competitive retail markets which have been difficult as well but are getting better and better and will enable extensive demand response in time but it's very difficult to get these smart home technologies into the homes. One thing that's gonna be very important is good governance to make sure that the market rules do evolve in a way that is helpful. Lots of markets like financial markets you don't necessarily see markets evolving in ways that improve efficiency. The market is often capture or the regulators captured by the intermediaries that are making money from the inefficiencies of the status quo and that tends to perpetuate. We've done better in electricity I think. We've had really big advances and we certainly had a lot of problems, a lot of mistakes but we're getting better and better at it and good governance is incredibly helpful in making sure you move towards a better path rather than a worse path. And this now is, you know more hope this is actually is a solar plus battery in Florida that's being expanded to 490 megawatts of battery storage in the future. That first picture that I started with is South Australia which was the largest battery in the world way back in December of 2017 but now as you can see the batteries are getting much bigger and will be a very nice way to support lots of renewables as long as they are receiving the right price incentives in the spot market so that they can anticipate profitable returns in their long life. So with that I will stop. Thank you.