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A simple dynamic energy capacity model

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  • Gander, James P.

Abstract

I develop a simple dynamic model showing how total energy capacity is allocated to two different uses and how these uses and their corresponding energy flows are related and behave through time. The control variable of the model determines the allocation. All the variables of the model are in terms of a composite energy equivalent measured in BTU's. A key focus is on the shadow price of energy capacity and its behavior through time. Another key focus is on the behavior of the control variable that determines the allocation of overall energy capacity. The matching or linking of the model's variables to real world U.S. energy data is undertaken. In spite of some limitations of the data, the model and its behavior fit the data fairly well. Some energy policy implications are discussed.

Suggested Citation

  • Gander, James P., 2012. "A simple dynamic energy capacity model," Energy Economics, Elsevier, vol. 34(1), pages 78-81.
    • Handle: RePEc:eee:eneeco:v:34:y:2012:i:1:p:78-81
    DOI: 10.1016/j.eneco.2011.08.011
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    References listed on IDEAS

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    4. Lee, Chien-Chiang & Chien, Mei-Se, 2010. "Dynamic modelling of energy consumption, capital stock, and real income in G-7 countries," Energy Economics, Elsevier, vol. 32(3), pages 564-581, May.
    5. Beladi, Hamid & Zuberi, Habib A., 1988. "Environmental constraints and a dynamic model for energy development," Energy Economics, Elsevier, vol. 10(1), pages 18-28, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Dynamic energy capacity model; Allocation of energy capacity; Shadow price of energy capacity; Energy data correspondence;
    All these keywords.

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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