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Hayek and the Texas blackout

Author

Listed:
  • Stephen Littlechild

    (EPRG, CJBS, University of Cambridge)

  • Lynne Kiesling

    (University of Colorado-Denver)

Abstract

Was the Texas blackout a market failure or regulatory failure? The economist Hayek has been adduced in support of both views. Hayek would have approved the competitive Texas system, including ERCOT. His likely view on the scarcity pricing framework is less clear, and the recent regulatory implementation of the "circuit breaker" was problematic. There is now a need to revise the scarcity pricing framework in the light of recent events, and to reflect ever-changing market conditions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Stephen Littlechild & Lynne Kiesling, 2021. "Hayek and the Texas blackout," Working Papers EPRG2118, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg2118
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    File URL: https://www.jbs.cam.ac.uk/wp-content/uploads/2023/12/eprg-wp2118.pdf
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    Citations

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    Cited by:

    1. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    2. Kazi Sifatul Islam & Samiul Hasan & Tamal Chowdhury & Hemal Chowdhury & Sadiq M. Sait, 2022. "Outage Survivability Investigation of a PV/Battery/CHP System in a Hospital Building in Texas," Sustainability, MDPI, vol. 14(22), pages 1-14, November.
    3. Tomasz Sieńko & Jerzy Szczepanik, 2025. "EU Energy Markets and Renewable Energy Sources—Are We Waiting for a Crisis?," Energies, MDPI, vol. 18(15), pages 1-19, August.
    4. Nan, Lu & Hu, Siduo & Chen, Yuhang & He, Chuan, 2025. "Critical transmission cut-sets identification within power grids," Reliability Engineering and System Safety, Elsevier, vol. 264(PA).
    5. Prakash, Abhijith & Bruce, Anna & MacGill, Iain, 2025. "The scheduling role of future pricing information in electricity markets with rising deployments of energy storage: An Australian National Electricity Market case study," Energy Economics, Elsevier, vol. 142(C).
    6. Danielian, Armen, 2025. "Regulating electricity spot markets during extreme events: The 2021 Texas case," Utilities Policy, Elsevier, vol. 93(C).
    7. Biggar, Darryl R. & Hesamzadeh, Mohammad Reza, 2024. "Crises in Texas and Australia: Failures of energy-only markets or unforeseen consequences of price caps?," Energy Economics, Elsevier, vol. 137(C).

    More about this item

    Keywords

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    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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