TY - JOUR
T1 - Technology choices in the U.S. Electricity industry before and after market restructuring
AU - Csereklyei, Zsuzsanna
AU - Stern, David I.
N1 - Publisher Copyright:
Copyright © 2018 by the IAEE. All rights reserved.
PY - 2018
Y1 - 2018
N2 - We study the drivers of the adoption of electricity generation technologies between 1970 and 2014 in the lower 48 U.S. states. Since the 1990s, major electricity market restructuring took place in some parts of the United States. We explore the implications of changing from a regulated “cost-of-service”, or rate of return, system to liberalized wholesale electricity markets on technology and fuel choices. We find that wholesale market restructuring resulted in significant immediate investment in various natural gas technologies due to higher expected profits, and a reduction in coal investments. In states that adopted liberalized wholesale electricity markets, higher natural gas price expectations resulted in more investment in coal and renewable technologies, while higher coal price expectations resulted in lower coal-fired baseload power investments. Natural gas price expectations, therefore, have the potential to significantly shape the power generation landscape of the future.
AB - We study the drivers of the adoption of electricity generation technologies between 1970 and 2014 in the lower 48 U.S. states. Since the 1990s, major electricity market restructuring took place in some parts of the United States. We explore the implications of changing from a regulated “cost-of-service”, or rate of return, system to liberalized wholesale electricity markets on technology and fuel choices. We find that wholesale market restructuring resulted in significant immediate investment in various natural gas technologies due to higher expected profits, and a reduction in coal investments. In states that adopted liberalized wholesale electricity markets, higher natural gas price expectations resulted in more investment in coal and renewable technologies, while higher coal price expectations resulted in lower coal-fired baseload power investments. Natural gas price expectations, therefore, have the potential to significantly shape the power generation landscape of the future.
KW - Electricity industry
KW - Market restructuring
KW - Technology choices
UR - http://www.scopus.com/inward/record.url?scp=85056777615&partnerID=8YFLogxK
U2 - 10.5547/01956574.39.5.zcse
DO - 10.5547/01956574.39.5.zcse
M3 - Article
SN - 0195-6574
VL - 39
SP - 157
EP - 182
JO - Energy Journal
JF - Energy Journal
IS - 5
ER -