Abstract
We investigate the efficiency and environmental impacts of electricity market restructuring by examining changes in fuel efficiency, cost of coal purchases, and utilization among coal-fired power plants based on a panel data set from 1991 to 2005. Our study focuses exclusively on coal-fired power plants and uses panel data covering several years after implementation of restructuring. The estimation compares how investor-owned (IOs) plants in states with restructuring changed their behavior relative to IOs in states without. Our analysis finds that restructuring led to: (1) a 1.4 percent improvement in fuel efficiency, (2) an 8 percent decrease in unit cost of heat input, and (3) a lower capacity factor even after adjusting for cross-plant generation re-allocation due to cost reductions. The estimates imply that restructuring has led to nearly 15 percent savings in operating expenses and up to 7.5 percent emissions reduction among these plants.
| Original language | English |
|---|---|
| Pages (from-to) | 1-18 |
| Number of pages | 18 |
| Journal | Journal of Environmental Economics and Management |
| Volume | 81 |
| Early online date | 30 Aug 2016 |
| DOIs | |
| Publication status | Published - 1 Jan 2017 |
Keywords
- Electricity restructuring
- Emissions
- Firm behavior