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Cost Structures for Fossil Fuel-Fired Electric Power Generation

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  • Timothy J. Considine

Abstract

This paper estimates short- and long-run marginal production costs and returns to scale in electric power generation in the United States. We find substantial short-run diseconomies of scale at high output levels. A relatively large number of small and mid-sized firms have optimal capital stocks below actual levels. In contrast, several large firms have optimal capital stock targets, substantially above current levels. These disparities in actual and optimal capital' suggest a possible consolidation in the industry.

Suggested Citation

  • Timothy J. Considine, 2000. "Cost Structures for Fossil Fuel-Fired Electric Power Generation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 83-104.
  • Handle: RePEc:aen:journl:2000v21-02-a04
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    Citations

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    Cited by:

    1. Supawat Rungsuriyawiboon & Spiro Stefanou, 2008. "The dynamics of efficiency and productivity growth in U.S. electric utilities," Journal of Productivity Analysis, Springer, vol. 30(3), pages 177-190, December.
    2. repec:eee:eneeco:v:65:y:2017:i:c:p:283-291 is not listed on IDEAS
    3. Supawat Rungsuriyawiboon, 2004. "An Analysis of Cost Structures in the Electricity Generation Industry," CEPA Working Papers Series WP052004, School of Economics, University of Queensland, Australia.
    4. Rungsuriyawiboon, Supawat & Stefanou, Spiro E., 2007. "Dynamic Efficiency Estimation: An Application to U.S. Electric Utilities," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 226-238, April.
    5. Kumbhakar, Subal C. & Wang, Hung-Jen, 2006. "Estimation of technical and allocative inefficiency: A primal system approach," Journal of Econometrics, Elsevier, vol. 134(2), pages 419-440, October.
    6. Harald Tauchmann, 2004. "Firing the Furnace? – An Econometric Analysis of Utilities’ Fuel Choice," RWI Discussion Papers 0017, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    7. repec:eee:jbfina:v:85:y:2017:i:c:p:1-14 is not listed on IDEAS
    8. Kemppi, Heikki & Perrels, Adriaan, 2003. "Liberalised Electricity Markets - Strengths and Weaknesses in Finland and Nordpool," Research Reports 97, VATT Institute for Economic Research.
    9. Supawat Rungsuriyawiboon & Tim Coelli, 2004. "Regulatory Reform and Economic Performance in US Electricity Generation," CEPA Working Papers Series WP062004, School of Economics, University of Queensland, Australia.
    10. Tauchmann, H., 2006. "Firing the furnace? An econometric analysis of utilities' fuel choice," Energy Policy, Elsevier, vol. 34(18), pages 3898-3909, December.
    11. Supawat Rungsuriyawiboon & Chris O'Donnell, 2004. "Curvature-Constrained Estimates of Technical Efficiency and Returns to Scale for U.S. Electric Utilities," CEPA Working Papers Series WP072004, School of Economics, University of Queensland, Australia.
    12. repec:zbw:rwidps:0017 is not listed on IDEAS
    13. Verde, Stefano, 2008. "Everybody merges with somebody--The wave of M&As in the energy industry and the EU merger policy," Energy Policy, Elsevier, vol. 36(3), pages 1125-1133, March.
    14. repec:aen:journl:ej38-si1-argentiero is not listed on IDEAS
    15. Evgenii Monastyrenko, 2016. "Cross-Border M&As and Eco-Environmental Performance of European Energy Utilities," FIW Working Paper series 169, FIW.
    16. Supawat Rungsuriyawiboon, 2004. "A Dynamic Approach to Estimate the Efficiency of U.S. Electric Utilities," Econometric Society 2004 Australasian Meetings 91, Econometric Society.

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    JEL classification:

    • F0 - International Economics - - General

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