It’s really all about people!

People sit at the center of energy decisions, helping explain why energy economists often talk about affordability, transparency, vulnerability, and cleaner energy choices.

Energy economics gained much attention as a distinct subfield of economics after the 1970s energy crisis. The American Economic Association recognizes the field through their official subject classification system as JEL Q4 – Energy.

In this subfield, I am personally interested in greener energy sources, pollution-reducing technologies, and effective methods for controlling emissions from the energy sector.

The purpose of this post is to share with you what I learned from four energy economics experts, working in diverse sectors and different countries. I reached out to them with the following question:

Given the current prioritization of fossil fuel development and energy independence—alongside the rollback of climate and clean energy policies—what are the two most urgent questions energy economists should address in 2026?

This question is particularly interesting to me because electricity production is one of the main contributors to greenhouse gas emissions, estimated to have accounted for about one-fourth of U.S. greenhouse gas emissions in 2022.

My reflection

The main lesson I learned from their responses: everything is really about people.

Energy economists seek to understand what matters for society. How do we make energy affordable as demand grows? How do we ensure its reliability, so that electricity actually reaches households and communities? How do we protect households most exposed to energy price volatility? How do we provide cleaner energy options so that energy production decisions do not harm people through pollution and emissions?

Seen this way, energy economics is deeply human. It is about designing energy systems not based on ideology, but on what truly matters to people in their everyday lives.

I am grateful to Margarita Patria, Laura Malaguzzi Valeri, Nives Della Valle, and Peter Schwarz for taking the time to sit with me and thoughtfully share their insights. Below, I reflect on each response and the key areas that energy economists should examine going forward, as highlighted by the experts.

Meeting data centers + AI’s energy demand without compromising affordability

Margarita Patria, Principal at Charles River Associates, emphasized the rapid increase in electricity demand driven by large users, particularly data centers and AI-related activities. One of her central concerns is how power systems can integrate these very large loads “quickly and reliably without shifting costs onto the broader customer base.”

When large new energy users connect to the grid, someone must pay for the new infrastructure and system upgrades. Energy economists study pricing rules and cost allocation to understand whether those costs are absorbed by the large users themselves or passed on to households and small businesses.

She also raised a second important question: What mix of power generation can realistically meet this surge in demand? This includes asking how much new gas generation can actually be built, and which renewable resources (such as offshore wind) are promising but face development barriers. Her focus is not on ideology but on understanding limits and constraints, so electricity systems remain reliable and affordable as demand grows.

She notes that, “There is growing bipartisan agreement that the ability to connect large loads efficiently is a matter of national competitiveness and security.”

Building more power plants is not enough without coordination

Laura Malaguzzi Valeri, Global Director for Research Integrity at World Resources Institute, highlighted a less visible but fundamental issue: coordination. As she put it, a “big unresolved question is around the coordination of transmission and distribution investments with generation.”

In simple terms, electricity needs more than power plants generating additional power. It needs transmission lines and local distribution networks to deliver power to homes and businesses. When investments in generation and grid infrastructure are not aligned, electricity can become more expensive, delayed, or unreliable.

Her response reflects a core concern in energy economics: energy systems only function when all their components work together. She also noted that researchers should focus on questions that will remain relevant in the years to come, rather than those driven by current events.

Identifying and protecting households vulnerable to energy-related risks

Nives Della Valle, a Senior Expert at the Institute for European Energy and Climate Policy, focused on households and communities. She emphasized the importance of identifying and measuring energy vulnerability, especially for “households and communities exposed to price volatility, supply uncertainty, and climate-related risks”.

She emphasizes that energy economics is not just about infrastructure or markets, but about people’s ability to cope with change. Without careful measurement, vulnerable households can be overlooked, leaving them to absorb higher prices or unreliable supply.

Energy economists, in this sense, should work to understand who is at risk, why they are at risk, and how policy can be designed so households are not left to deal with uncertainty on their own.

Examining green growth and the consequences of abandoning emission concerns

Peter Schwarz, the author of Energy Economics - Routledge Textbooks in Environmental and Agricultural Economics, places current energy questions in a broader context. He pointed to the continued growth of solar energy in the United States, even “despite all the obstacles thrown in its path,” and raised questions about what is driving that growth and what its future looks like under changing political priorities.

He also highlighted a more sobering issue: the consequences of stepping away from concern about CO₂ emissions. This includes impacts on the global climate and the realities of living on a warmer planet. His response reflects the long-term perspective energy economists often bring—looking beyond immediate policy shifts to understand their lasting effects.

A question for you

As energy demand continues to grow, what do you think matters most?

• Keeping energy affordable?

• Keeping it reliable? or

• Making sure the transition to cleaner energy does not leave some households behind?

I would appreciate hearing your perspective. Feel free to share your thoughts in the comments.