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Interfuel substitution in US electricity generation

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  • James Ko
  • Carol Dahl

Abstract

Ongoing changes in the US electricity market include restructuring and increased competition. With this unfettering of the market, the fuel choice in generation is expected to become more flexible and responsive. To investigate this hypothesis, studies of US electricity fuel choices over the last three decades are summarized and the most recent analysis is provided on a market very different from the one on which earlier studies were done. Modern data handling techniques allow the consideration of the most comprehensive database including 185 utilities on monthly data for 1993. This paper finds fuel choice to show a considerable amount of price responsiveness, the amount of responsiveness is sensitive to the fuel substitution possibilities within the utility, and the amount of responsiveness seems to have increased recently for oil and natural gas.

Suggested Citation

  • James Ko & Carol Dahl, 2001. "Interfuel substitution in US electricity generation," Applied Economics, Taylor & Francis Journals, vol. 33(14), pages 1833-1843.
  • Handle: RePEc:taf:applec:v:33:y:2001:i:14:p:1833-1843
    DOI: 10.1080/00036840010021122
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    References listed on IDEAS

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    1. C. Dahl, 1995. "Modelling U.S. Energy Demand: a Survey of Econometric Demand Elasticities," Economics Discussion / Working Papers 95-02, The University of Western Australia, Department of Economics.
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    Cited by:

    1. Gerlagh, Reyer, 2007. "Measuring the value of induced technological change," Energy Policy, Elsevier, vol. 35(11), pages 5287-5297, November.
    2. Zachlod-Jelec, Magdalena & Boratynski, Jakub, 2016. "How large and uncertain are costs of 2030 GHG emissions reduction target for the European countries? Sensitivity analysis in a global CGE model," MF Working Papers 26, Ministry of Finance in Poland.
    3. Cai, Yiyong & Newth, David & Finnigan, John & Gunasekera, Don, 2015. "A hybrid energy-economy model for global integrated assessment of climate change, carbon mitigation and energy transformation," Applied Energy, Elsevier, vol. 148(C), pages 381-395.
    4. Valentina Bosetti & Emanuele Massetti & Massimo Tavoni, 2007. "The WITCH Model. Structure, Baseline, Solutions," Working Papers 2007.10, Fondazione Eni Enrico Mattei.
    5. Michielsen, Thomas O., 2014. "Brown backstops versus the green paradox," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 87-110.
    6. Pettersson, Fredrik & Söderholm, Patrik & Lundmark, Robert, 2012. "Fuel switching and climate and energy policies in the European power generation sector: A generalized Leontief model," Energy Economics, Elsevier, vol. 34(4), pages 1064-1073.
    7. Gao, Jing & Nelson, Robert & Zhang, Lei, 2013. "Substitution in the electric power industry: An interregional comparison in the eastern US," Energy Economics, Elsevier, vol. 40(C), pages 316-325.
    8. Johannes Truby and Moritz Paulus, 2012. "Market Structure Scenarios in International Steam Coal Trade," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    9. Elena Verdolini & Nick Johnstone & Ivan Hašcic, 2011. "Technological Change, Fuel Efficiency and Carbon Intensity in Electricity Generation: A Cross-Country Empirical Study," Working Papers 2011.92, Fondazione Eni Enrico Mattei.
    10. Cai, Yiyong & Arora, Vipin, 2015. "Disaggregating electricity generation technologies in CGE models: A revised technology bundle approach with an application to the U.S. Clean Power Plan," Applied Energy, Elsevier, vol. 154(C), pages 543-555.
    11. repec:eee:eneeco:v:68:y:2017:i:c:p:466-477 is not listed on IDEAS
    12. Bartocci, Anna & Pisani, Massimiliano, 2013. "“Green” fuel tax on private transportation services and subsidies to electric energy. A model-based assessment for the main European countries," Energy Economics, Elsevier, vol. 40(S1), pages 32-57.
    13. Lafrancois, Becky A., 2012. "A lot left over: Reducing CO2 emissions in the United States’ electric power sector through the use of natural gas," Energy Policy, Elsevier, vol. 50(C), pages 428-435.
    14. Shahiduzzaman, Md. & Layton, Allan, 2015. "Changes in CO2 emissions over business cycle recessions and expansions in the United States: A decomposition analysis," Applied Energy, Elsevier, vol. 150(C), pages 25-35.

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