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Market Restructuring, Competition and the Efficiency of Electricity Generation: Plant-level Evidence from the United States 1996 to 2006

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  • J. Dean Craig and Scott J. Savage

Abstract

This paper examines the effects of market restructuring initiatives that introduced competition into the United States electricity industry on the thermal efficiency of electricity generation. An empirical model is estimated on annual data for over 950 plants from 1996 to 2006. Model estimates show that access to wholesale electricity markets and retail choice together increased the efficiency of investor-owned plants by about nine percent and that these gains stem from organizational and technological changes within the plant. Although not directly targeted by restructuring initiatives, similar efficiency gains are also found for municipality-owned plants. This result suggests that the potential benefits from competition have spilled over to public electricity generation.

Suggested Citation

  • J. Dean Craig and Scott J. Savage, 2013. "Market Restructuring, Competition and the Efficiency of Electricity Generation: Plant-level Evidence from the United States 1996 to 2006," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
  • Handle: RePEc:aen:journl:ej34-1-01
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Seifert, Stefan, 2015. "Productivity Growth and its Sources - A StoNED Metafrontier Analyis of the German Electricity Generating Sector," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112975, Verein für Socialpolitik / German Economic Association.
    2. Craig, J. Dean, 2016. "Motivations for market restructuring: Evidence from U.S. electricity deregulation," Energy Economics, Elsevier, vol. 60(C), pages 162-167.
    3. repec:aen:journl:ej38-4-ros is not listed on IDEAS
    4. Machiel Mulder, 2015. "Competition in the Dutch Electricity Market: An Empirical Analysis over 2006-2011," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    5. Seifert, Stefan & Cullmann, Astrid & von Hirschhausen, Christian, 2016. "Technical efficiency and CO2 reduction potentials — An analysis of the German electricity and heat generating sector," Energy Economics, Elsevier, vol. 56(C), pages 9-19.
    6. repec:eee:resene:v:52:y:2018:i:c:p:153-172 is not listed on IDEAS
    7. Matthew Doyle & Harrison Fell, 2016. "Fuel Prices, Restructuring, and Natural Gas Plant Operations," Working Papers 2016-03, Colorado School of Mines, Division of Economics and Business.
    8. Christopher R. Knittel & Konstantinos Metaxoglou & Andre Trindade, 2015. "Natural Gas Prices and Coal Displacement: Evidence from Electricity Markets," NBER Working Papers 21627, National Bureau of Economic Research, Inc.
    9. Stefan Seifert, 2015. "Measuring Productivity When Technologies Are Heterogeneous: A Semi-Parametric Approach for Electricity Generation," Discussion Papers of DIW Berlin 1526, DIW Berlin, German Institute for Economic Research.
    10. repec:eee:enepol:v:123:y:2018:i:c:p:230-239 is not listed on IDEAS
    11. repec:eee:eneeco:v:63:y:2017:i:c:p:1-12 is not listed on IDEAS
    12. repec:aen:journl:ej38-3-lei is not listed on IDEAS
    13. Germeshausen, Robert, 2018. "The European Union emissions trading scheme and fuel efficiency of fossil fuel power plants in Germany," ZEW Discussion Papers 18-007, ZEW - Leibniz Centre for European Economic Research.
    14. Derya Eryilmaz, Timothy M. Smith, and Frances R. Homans, 2017. "Price Responsiveness in Electricity Markets: Implications for Demand Response in the Midwest," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    15. Mohammad Ali Motafakker Azad & Mohsen Pourebadollahan Covich & Sakineh Sojoodi, 2015. "The Impact of Electricity Competitive Market Establishment on Technical Efficiency of Thermal Power Plants in Iran," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 1010-1015.
    16. repec:bla:jindec:v:65:y:2017:i:1:p:73-104 is not listed on IDEAS
    17. Mou, Dunguo, 2014. "Understanding China’s electricity market reform from the perspective of the coal-fired power disparity," Energy Policy, Elsevier, vol. 74(C), pages 224-234.
    18. repec:eee:indorg:v:63:y:2019:i:c:p:511-550 is not listed on IDEAS

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    • F0 - International Economics - - General

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