How Can Renewable Portfolio Standards Lower Electricity Prices?
Some studies of renewable portfolio standards find that regulations increase generation costs; others find that reduced demand for nonrenewable energy sources lowers natural gas prices and that electricity prices follow. This paper presents reasoning for why these predictions can vary in the direction as well as in the magnitude of their effects. The driving factors are the relative elasticities of electricity supply from both fossil and renewable energy sources. The availability of other baseload generation is another factor, whereas demand elasticity influences only the magnitude of the price effects, not the direction of those effects.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krichene, Noureddine, 2002. "World crude oil and natural gas: a demand and supply model," Energy Economics, Elsevier, vol. 24(6), pages 557-576, November.
- Fischer, Carolyn & Newell, Richard, 2004.
"Environmental and Technology Policies for Climate Mitigation,"
dp-04-05, Resources For the Future.
- Fischer, Carolyn & Newell, Richard G., 2008. "Environmental and technology policies for climate mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 142-162, March.
- Palmer, Karen & Burtraw, Dallas, 2005.
"Cost-effectiveness of renewable electricity policies,"
Elsevier, vol. 27(6), pages 873-894, November.
- Burtraw, Dallas & Palmer, Karen, 2005. "Cost-Effectiveness of Renewable Electricity Policies," Discussion Papers dp-05-01, Resources For the Future.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-06-20. 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: (Webmaster)
If references are entirely missing, you can add them using this form.