July 20, 2018

Energy Initiative Doctoral Student Fellow receives prestigious NBER Fellowship for work on battery storage

Nicholas Institute for Environmental Policy Solutions

Justin Kirkpatrick, a Duke University Energy Initiative Doctoral Student Fellow, has been awarded a prestigious Pre-Doctoral Fellowship in Energy Economics from the National Bureau of Economic Research (NBER). Kirkpatrick is a rising fourth-year PhD candidate in the University Program in Environmental Policy (UPEP), a joint degree program of the Nicholas School of the Environment and Sanford School of Public Policy. His research focuses on how energy storage affects peak prices in the California electricity market.

Energy Initiative graduate student assistant Caitlin Bonney (MEM'19) sat down with Kirkpatrick to learn more about his research, the NBER Pre-Doctoral Fellowship, and how the Energy Initiative has been influential in his time at Duke.

Bonney: How did you decide to get your PhD and why did you choose Duke?
I earned my master's degree in environmental management (MEM) at the Nicholas School of the Environment in 2012, so I was familiar with the program and the professors. After I took a course on program evaluation with Nicholas School professor Lori Bennear, she served as my advisor for my  master's project on PACE financing for residential solar installations. As I wrapped up my degree, she brought up the idea of doing a PhD, which was in line with what I was thinking for my future plans. In the meantime, I went and worked for two years at NOAA Northeast Fisheries Science Center. Being able to add something quantitative to a policy discussion was neat and it led me to want to get better at the tools so I could make more of a difference. The opportunity to work with and learn from Bennear and everyone else here was what made me choose Duke.

Bonney: What is the NBER Pre-Doctoral Fellowship on Energy Economics?
The NBER Pre-Doctoral Fellowship on Energy Economics is targeted to people that are in their third and fourth year that have completed their coursework and are developing or have an idea of their thesis. NBER has always been on my radar—you don't make it too far in economics without at least reading NBER working papers. The people affiliated with their organization are writing some of the most interesting papers that I've found for the most part. They do a lot with energy and environment.

Bonney: What will you do in your year-long NBER Fellowship?
NBER has a summer institute for two or three days where all of the NBER faculty members, including Billy Pizer (Sanford School of Public Policy) and Chris Timmins (Economics), get together and share what they are excited about working on and get feedback. They also invite faculty members that want to present to become members of NBER. I will be going to that this summer (2018). It is attended by people whose papers you read the first day of economics class, and the people working on the cutting edge of the field. I look forward to how that will inform my research throughout the year. 

Bonney: What is the focus of your research proposal for the fellowship?
The paper that I submitted for the research proposal, which will be my job market paper, is on energy storage. It is an empirical look at battery energy storage which really has not been done at all because energy storage is fairly new. In the California ISO grid, there is a substantial amount of energy storage that has come online since 2009 or so. California has thousands of pricing nodes and the price is set based on congestion and the cost of electricity. I figured out which nodes were most likely to have energy storage and then I could look at the effect of energy storage on prices. There is a public benefit to reducing peak prices and a public cost at night when you are charging because it raises demand. If we look at how energy storage affects the peak price, then we can start talking about how energy storage affects the grid in the long run.

Bonney: What does your analysis to date suggest about the effect of storage on pricing?
I have preliminary results that are promising and interesting. In the summertime peak, at about five in the afternoon, there is about a third of a percent decrease of the price of electricity because of energy storage. There is a very good argument to say this is a causal effect. A third of a percent during a time when demand is the highest is a lot—it's worth millions of dollars.

Bonney: What role do fellowships from external organizations play in a PhD?
External fellowships are important because they provide funding and help to signal ability when you're on the job market. The NBER one is pretty darn prestigious. I can't think of one I would have rather won.

Bonney: What role has the Energy Initiative played in your time at Duke?
The people and resources at the Energy Initiative were what attracted me to come back to Duke.

Bonney: Name names!
Lori Bennear (Nicholas School of the Environment), who is the associate director of educational programs at the Energy Initiative, has been extremely helpful in identifying what was interesting. Energy Initiative faculty fellow Steve Sexton (Sanford School of Public Policy) assisted with my thinking about the questions and directions to go and he helped point out that congestion was missing from my early estimates. Bryan Bollinger (Fuqua School of Business), who is on my committee and is part of the larger Energy Initiative community, has been really influential on the progress of my research as well.

The other Energy Initiative doctoral student fellows have been supportive, too. As fellows, we have offices together in the Energy Initiative suite for collaboration. It has been great to be able to walk over to another cubicle and run an idea by a peer.  

Bonney: You mentioned resources—tell me more.
One part of what has helped develop my research is funding support through the Energy Initiative for a couple things I got to attend last year. I spent a week at Colorado School of Mines's 2017 Colorado Technology Primer for Economists and Social Scientists, a workshop that was run by a Duke PhD alum. It was a five-day workshop that brought in engineering professors and people that do policy and engineering. It was great because it let me take economic tools and connect it to physical engineering—things like node prices and congestion. That was really helpful, and the Energy Initiative helped me get into that and funded it. They also helped me get into a UC Berkeley workshop that focused on energy and environmental economics, and supported my travel.  

The Energy Initiative has also helped with data acquisition and computing. The Energy Data Analytics Lab has a robust server that I can run data intensive things on. It gives me the ability to process five-minute interval pricing data from 5,000 nodes over 8 years. I've worked pretty closely with Kyle Bradbury (managing director, Energy Data Analytics Lab) on a couple things including computing management. He's been a great resource.  

Bonney: What do you plan to do after you finish your PhD at Duke?
Academia is definitely where I am headed—that was the intent all along. I enjoy teaching—I taught ENVIRON 710 (Applied Data Analysis for Environmental Sciences) last year. I really enjoy research and coming up with questions that are meaningful and answering them.

To see more of Kirkpatrick's work, visit his Scholars@Duke page