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Do Subsidies Extend Lifeline to Coal?

Author

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  • Nehan Naim

    (State University of New York - ESF)

Abstract

Emphasis on cleaner power sector and the need for maintaining system reliability often have contrasting influence on fossil fueled electricity generation. This paper contributes to the literature by evaluating the impact of capacity subsidies, which were introduced by the northeastern Regional Transmission Organizations to ensure resource adequacy, on the retirements of electricity generation in the US. Using state level data, I present evidence that states with capacity mechanisms have experienced decelerated retirements compared to states with no capacity markets overall, but not for coal-fired generation in particular. Findings also suggest that renewable energy policies like the Renewable Portfolio Standard are more effective in achieving sustainable energy goals.

Suggested Citation

  • Nehan Naim, 2022. "Do Subsidies Extend Lifeline to Coal?," Economics Bulletin, AccessEcon, vol. 42(2), pages 722-728.
    • Handle: RePEc:ebl:ecbull:eb-21-00408
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P60.pdf
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    References listed on IDEAS

    as
    1. Newbery, David, 2016. "Missing money and missing markets: Reliability, capacity auctions and interconnectors," Energy Policy, Elsevier, vol. 94(C), pages 401-410.
    2. Navarro, Peter, 2004. "On the Political Economy of Electricity Deregulation--California Style," The Electricity Journal, Elsevier, vol. 17(2), pages 47-54, March.
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    More about this item

    Keywords

    Regulations; Energy; Subsidies; Market Design;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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