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Supply Curves for Conserved Electricity

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  • Paul, Anthony

    (Resources for the Future)

  • Palmer, Karen

    (Resources for the Future)

  • Woerman, Matt

    (Resources for the Future)

Abstract

In this paper, we introduce a new top-down approach to modeling the effects of publicly financed energy-efficiency programs on electricity consumption and carbon dioxide emissions. The approach draws on a partial-adjustment econometric model of electricity demand and represents the results of a reverse auction for electricity savings from different levels of public investment. The model is calibrated to recent estimates of the cost-effectiveness of rate payer–funded efficiency programs at reducing electricity consumption. The results suggest that supply curves for conserved electricity are upward sloping, convex, and dependent on policy design and electricity prices. Under the scenarios modeled, electricity savings of between 1 and 3 percent are achievable at a marginal cost of $50 per megawatt hour (MWh) and a corresponding average cost of $25–$35/MWh.

Suggested Citation

  • Paul, Anthony & Palmer, Karen & Woerman, Matt, 2011. "Supply Curves for Conserved Electricity," RFF Working Paper Series dp-11-11, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-11-11
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-11-11.pdf
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    References listed on IDEAS

    as
    1. Toshi H. Arimura, Shanjun Li, Richard G. Newell, and Karen Palmer, 2012. "Cost-Effectiveness of Electricity Energy Efficiency Programs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    2. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    3. Paul, Anthony & Myers, Erica & Palmer, Karen, 2009. "A Partial Adjustment Model of U.S. Electricity Demand by Region, Season, and Sector," RFF Working Paper Series dp-08-50, Resources for the Future.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ghaderi, A. & Parsa Moghaddam, M. & Sheikh-El-Eslami, M.K., 2014. "Energy efficiency resource modeling in generation expansion planning," Energy, Elsevier, vol. 68(C), pages 529-537.

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    More about this item

    Keywords

    energy efficiency; climate change;

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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