Measuring Gains from Regional Dispatch: Coal-Fired Power Plant Utilization and Market Reforms
AbstractThis paper examines changes in the utilization rates (annual capacity factors) of coal-burning power plants in the eastern United States after 1996, when federal regulators opened the transmission system to wholesale power markets. This and other accompanying market-oriented reforms were intended to improve efficiency by encouraging regional dispatch by independent system operators. If the reforms made dispatch more efficient, then utilization rates of high-cost plants should have fallen relative to those of low-cost plants since 1996. A difference-in-difference model using plant-level panel data indicates that relative utilization rates of high-cost plants did indeed fall after 1996, but only in regions with independent system operators. Simulations indicate cost savings on the order of two to three percent.
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Bibliographic InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume 27 (2006)
Issue (Month): Number 1 ()
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- H. Ron Chan & Harrison Fell & Ian A. Lange & Shanjun Li, 2013.
"Efficiency and Environmental Impacts of Electricity Restructuring on Coal-Fired Power Plants,"
CESifo Working Paper Series
4160, CESifo Group Munich.
- H. Ron Chan & Harrison Fell & Ian Lange & Shanjun Li, 2013. "Effciency and Environmental Impacts of Electricity Restructuring on Coal-Fired Power Plants," Working Papers 2013-01, Colorado School of Mines, Division of Economics and Business.
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- Pollitt, M. J., 2011. "Lessons from the History of Independent System Operators in the Energy Sector, with applications to the Water Sector," Cambridge Working Papers in Economics 1153, Faculty of Economics, University of Cambridge.
- Nikandrova, Arina & Steinbuks, Jevgenijs, 2014. "Contracting for the second best in dysfunctional electricity markets," Policy Research Working Paper Series 6955, The World Bank.
- Ferrara, Andreas & Lange, Ian, 2011. "Voluntary Programs to Encourage Diffusion: The Case of the Combined Heat-and-Power Partnership," Stirling Economics Discussion Papers 2011-16, University of Stirling, Division of Economics.
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