How Can Renewable Portfolio Standards Lower Electricity Prices?
AbstractSome studies of renewable portfolio standards find that regulations increase generation costs; others find that reduced demand for nonrenewable energy sources lowers natural gas prices and that electricity prices follow. This paper presents reasoning for why these predictions can vary in the direction as well as in the magnitude of their effects. The driving factors are the relative elasticities of electricity supply from both fossil and renewable energy sources. The availability of other baseload generation is another factor, whereas demand elasticity influences only the magnitude of the price effects, not the direction of those effects.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-06-20.
Date of creation: 05 May 2006
Date of revision:
portfolio standards; natural gas; renewable energy; climate change;
Find related papers by JEL classification:
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-13 (All new papers)
- NEP-ENE-2006-05-13 (Energy Economics)
- NEP-PBE-2006-05-13 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krichene, Noureddine, 2002. "World crude oil and natural gas: a demand and supply model," Energy Economics, Elsevier, vol. 24(6), pages 557-576, November.
- Burtraw, Dallas & Palmer, Karen, 2005.
"Cost-Effectiveness of Renewable Electricity Policies,"
dp-05-01, Resources For the Future.
- Palmer, Karen & Burtraw, Dallas, 2005. "Cost-effectiveness of renewable electricity policies," Energy Economics, Elsevier, vol. 27(6), pages 873-894, November.
- Fischer, Carolyn & Newell, Richard, 2004.
"Environmental and Technology Policies for Climate Mitigation,"
dp-04-05, Resources For the Future.
- Fischer, Carolyn & Newell, Richard G., 2008. "Environmental and technology policies for climate mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 142-162, March.
- Liliana Gelabert & Xavier Labandeira & Pedro Linares, 2011. "Renewable Energy and Electricity Prices in Spain," Working Papers 01-2011, Economics for Energy.
- Vajjhala, Shalini & Paul, Anthony & Sweeney, Richard & Palmer, Karen, 2008. "Green Corridors: Linking Interregional Transmission Expansion and Renewable Energy Policies," Discussion Papers dp-08-06, Resources For the Future.
- Bhattacharya, Suparna & Giannakas, Konstantinos & Schoengold, Karina, 2013. "Market and Welfare Effects of Renewable Portfolio Standard in the Vertically Differentiated U.S. Energy Markets," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151216, Agricultural and Applied Economics Association.
- Christoph Böhringer & Knut Rosendahl, 2010. "Green promotes the dirtiest: on the interaction between black and green quotas in energy markets," Journal of Regulatory Economics, Springer, vol. 37(3), pages 316-325, June.
- Constant Tra, 2009. "Have Renewable Portfolio Standards Raised Electricity Rates? Evidence from U.S. Electric Utilities," Working Papers 0923, University of Nevada, Las Vegas , Department of Economics.
- Rüdiger Pethig & Christian Wittlich, 2009.
"Interaction of Carbon Reduction and Green Energy Promotion in a Small Fossil-Fuel Importing Economy,"
CESifo Working Paper Series
2749, CESifo Group Munich.
- Rüdiger Pethig & Christian Wittlich, 2009. "Interaction of carbon reduction and green energy promotion in a small fossil-fuel importing economy," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 131-09, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
- Moreno, Fermín & Martínez-Val, José M., 2011. "Collateral effects of renewable energies deployment in Spain: Impact on thermal power plants performance and management," Energy Policy, Elsevier, vol. 39(10), pages 6561-6574, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster).
If references are entirely missing, you can add them using this form.