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Substitution in the electric power industry: An interregional comparison in the eastern US

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  • Gao, Jing
  • Nelson, Robert
  • Zhang, Lei

Abstract

The electric power industry is restructuring as regulations move from states to regional and national levels. Estimates of regional fuel and input substitution are essential for practitioners and policy makers. This paper estimates substitution under static and dynamic scenarios, examining changes in technology and total factor productivity from 2001 to 2008. Two-stage estimation reveals regional characteristics and underlying elements in fuel and factor choice processes. Substitution varies widely depending on the region, coal technology, capital investment, and R&D activities.

Suggested Citation

  • Gao, Jing & Nelson, Robert & Zhang, Lei, 2013. "Substitution in the electric power industry: An interregional comparison in the eastern US," Energy Economics, Elsevier, vol. 40(C), pages 316-325.
    • Handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:316-325
    DOI: 10.1016/j.eneco.2013.07.011
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    6. Elbakidze, Levan & Zaynutdinova, Gulnara, 2016. "Substitution in electricity generation: A state level analysis of structural change from hydraulic fracturing technology," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235780, Agricultural and Applied Economics Association.
    7. Xie, Chunping & Hawkes, Adam D., 2015. "Estimation of inter-fuel substitution possibilities in China's transport industry using ridge regression," Energy, Elsevier, vol. 88(C), pages 260-267.

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    More about this item

    Keywords

    Electricity generation; Interfactor substitution; Interfuel substitution; Technological change; Total factor productivity;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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