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Technology choices in the U.S. electricity industry before and after market restructuring

Author

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  • Zsuzsanna Csereklyei

    (Crawford School of Public Policy, The Australian National University)

  • David I. Stern

Abstract

We study the drivers of the adoption of electricity generation technologies between 1970 and 2014 in the lower 48 U.S. states. Since the 1990s, major electricity market restructuring took place in some parts of the United States. We explore the implications of changing from a regulated “cost-of-service” or rate of return system to a partly and fully deregulated market on technology and fuel choices. We find that electricity market deregulation resulted in significant immediate investment in various natural gas technologies, and a reduction in coal investments. However, market deregulation impacted less negatively on high efficiency coal technologies. In states that adopted wholesale electricity markets, high natural gas prices resulted in more investment in coal and renewable technologies.

Suggested Citation

  • Zsuzsanna Csereklyei & David I. Stern, 2017. "Technology choices in the U.S. electricity industry before and after market restructuring," CCEP Working Papers 1703, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:ccepwp:1703
    as

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    File URL: https://ccep.crawford.anu.edu.au/files/uploads/ccep_crawford_anu_edu_au/2017-03/ccep_1703.pdf
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    References listed on IDEAS

    as
    1. 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).
    2. Kira R. Fabrizio & Nancy L. Rose & Catherine D. Wolfram, 2007. "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency," American Economic Review, American Economic Association, vol. 97(4), pages 1250-1277, September.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Two New Working Papers
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2017-03-23 06:25:00
    2. Annual Review 2017
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2017-12-28 02:26:00
    3. Annual Review 2018
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2018-12-23 02:35:00

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    Cited by:

    1. Csereklyei, Zsuzsanna & Anantharama, Nandini & Kallies, Anne, 2021. "Electricity market transitions in Australia: Evidence using model-based clustering," Energy Economics, Elsevier, vol. 103(C).
    2. Csereklyei, Zsuzsanna & Qu, Songze & Ancev, Tihomir, 2019. "The effect of wind and solar power generation on wholesale electricity prices in Australia," Energy Policy, Elsevier, vol. 131(C), pages 358-369.

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    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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