What is the strategic value of investments in alternative local energy supply?
This paper studies strategic incentives to invest in electricity generation capacity using a local fuel like renewables or coal. It shows that investing in this capacity, even if not used, improves the bargaining position of a power producing firm that also imports another fuel such as gas. When several importers are considered, the paper finds that investment has a positive strategic effect on all other importers’ bargaining position. A government energy policy that forces utilities to invest in capacity based on particular fuels can be justified not only for environmental but also for strategic reasons.
|Date of creation:||Feb 2010|
|Contact details of provider:|| Web page: http://feb.kuleuven.be/Economics/|
When requesting a correction, please mention this item's handle: RePEc:ete:ceswps:ces10.04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library EBIB)
If references are entirely missing, you can add them using this form.