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Supply Curves for Conserved Electricity

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  • Paul, Anthony

    ()
    (Resources for the Future)

  • Palmer, Karen

    ()
    (Resources for the Future)

  • Woerman, Matt

    ()
    (Resources for the Future)

Abstract

In this paper, we introduce a new top-down approach to modeling the effects of publicly financed energy-efficiency programs on electricity consumption and carbon dioxide emissions. The approach draws on a partial-adjustment econometric model of electricity demand and represents the results of a reverse auction for electricity savings from different levels of public investment. The model is calibrated to recent estimates of the cost-effectiveness of rate payer–funded efficiency programs at reducing electricity consumption. The results suggest that supply curves for conserved electricity are upward sloping, convex, and dependent on policy design and electricity prices. Under the scenarios modeled, electricity savings of between 1 and 3 percent are achievable at a marginal cost of $50 per megawatt hour (MWh) and a corresponding average cost of $25–$35/MWh.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-11-11.

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Date of creation: 07 Apr 2011
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Handle: RePEc:rff:dpaper:dp-11-11

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Keywords: energy efficiency; climate change;

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  1. Toshi H. Arimura & Shanjun Li & Richard G. Newell & Karen Palmer, 2011. "Cost-Effectiveness of Electricity Energy Efficiency Programs," NBER Working Papers 17556, National Bureau of Economic Research, Inc.
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