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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, , vol. 21(2), pages 83-104, April.
    • Handle: RePEc:sae:enejou:v:21:y:2000:i:2:p:83-104
    DOI: 10.5547/ISSN0195-6574-EJ-Vol21-No2-4
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    References listed on IDEAS

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    1. Atkinson, Scott E & Halvorsen, Robert, 1984. "Parametric Efficiency Tests, Economies of Scale, and Input Demand in U.S. Electric Power Generation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(3), pages 647-662, October.
    2. Morrison, Catherine J, 1985. "Primal and Dual Capacity Utilization: An Application to Productivity Measurement in the U.S. Automobile Industry," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(4), pages 312-324, October.
    3. Berndt, Ernst R & Savin, N Eugene, 1975. "Estimation and Hypothesis Testing in Singular Equation Systems with Autoregressive Disturbances," Econometrica, Econometric Society, vol. 43(5-6), pages 937-957, Sept.-Nov.
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