IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v62y2013icp1078-1091.html
   My bibliography  Save this article

Reliability in the U.S. electricity industry under new environmental regulations

Author

Listed:
  • Burtraw, Dallas
  • Palmer, Karen
  • Paul, Anthony
  • Beasley, Blair
  • Woerman, Matt

Abstract

Implementation of new environmental regulations of sulfur dioxide, nitrogen oxides and mercury in the U.S. electricity industry has triggered concerns about system reliability. Results from a national electricity market simulation model suggest that these regulations lead to little change in generation capacity and are unlikely to create the shock to the system that some anticipate. Large costs of investments in pollution controls are partially offset by a lower cost burden for tradable emissions allowances. The combined effects result in a 1 percent increase in national average retail electricity prices. In 2020 producers pay approximately 30 percent and consumers pay approximately 70 percent of the total costs of the regulations, which equal between $6.6 and $7.1 billion in 2020 (real 2009$). The regulation leads to substantial reductions in emissions of mercury and sulfur dioxide from the electricity sector.

Suggested Citation

  • Burtraw, Dallas & Palmer, Karen & Paul, Anthony & Beasley, Blair & Woerman, Matt, 2013. "Reliability in the U.S. electricity industry under new environmental regulations," Energy Policy, Elsevier, vol. 62(C), pages 1078-1091.
    • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:1078-1091
    DOI: 10.1016/j.enpol.2013.06.070
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421513005776
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2013.06.070?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Burtraw, Dallas & Palmer, Karen & Bharvirkar, Ranjit & Paul, Anthony, 2001. "The Effect of Allowance Allocation on the Cost of Carbon Emission Trading," RFF Working Paper Series dp-01-30-, Resources for the Future.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kantamneni, Abhilash & Winkler, Richelle & Gauchia, Lucia & Pearce, Joshua M., 2016. "Emerging economic viability of grid defection in a northern climate using solar hybrid systems," Energy Policy, Elsevier, vol. 95(C), pages 378-389.
    2. Beasley, Blair & Morris, Daniel, 2012. "Modeling the Electricity Sector: A Summary of Recent Analyses of New EPA Regulations," RFF Working Paper Series dp-12-52, Resources for the Future.
    3. Gençer, Emre & Agrawal, Rakesh, 2016. "A commentary on the US policies for efficient large scale renewable energy storage systems: Focus on carbon storage cycles," Energy Policy, Elsevier, vol. 88(C), pages 477-484.
    4. Beasley, Blair & Woerman, Matt & Paul, Anthony & Burtraw, Dallas & Palmer, Karen, 2013. "Mercury and Air Toxics Standards Analysis Deconstructed: Changing Assumptions, Changing Results," RFF Working Paper Series dp-13-10, Resources for the Future.
    5. Burtraw, Dallas & Palmer, Karen & Paul, Anthony & Woerman, Matt, 2012. "Secular Trends, Environmental Regulation, and Electricity Markets," RFF Working Paper Series dp-12-15, Resources for the Future.
    6. Burtraw, Dallas & Woerman, Matt, 2013. "Economic ideas for a complex climate policy regime," Energy Economics, Elsevier, vol. 40(S1), pages 24-31.
    7. Anthony Paul & Karen Palmer & Matthew Woerman, 2015. "Incentives, Margins, And Cost Effectiveness In Comprehensive Climate Policy For The Power Sector," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-27, November.
    8. Hayibo, Koami Soulemane & Pearce, Joshua M., 2021. "A review of the value of solar methodology with a case study of the U.S. VOS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    9. Bielen, David A., 2018. "Do differentiated performance standards help coal? CO2 policy in the U.S. electricity sector," Resource and Energy Economics, Elsevier, vol. 53(C), pages 79-100.
    10. Harker Steele, Amanda J. & Burnett, J. Wesley & Bergstrom, John C., 2021. "The impact of variable renewable energy resources on power system reliability," Energy Policy, Elsevier, vol. 151(C).
    11. Paul, Anthony & Beasley, Blair & Palmer, Karen, 2013. "Taxing Electricity Sector Carbon Emissions at Social Cost," RFF Working Paper Series dp-13-23-rev, Resources for the Future.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chernyavs’ka, Liliya & Gullì, Francesco, 2007. "Interaction of carbon and electricity prices under imperfect competition," MPRA Paper 5866, University Library of Munich, Germany.
    2. Liu, Beibei & He, Pan & Zhang, Bing & Bi, Jun, 2012. "Impacts of alternative allowance allocation methods under a cap-and-trade program in power sector," Energy Policy, Elsevier, vol. 47(C), pages 405-415.
    3. Sterner, Thomas & Muller, Adrian, 2006. "Output and Abatement Effects of Allocation Readjustment in Permit Trade," RFF Working Paper Series dp-06-49, Resources for the Future.
    4. Bin Ye & Jingjing Jiang & Lixin Miao & Ji Li & Yang Peng, 2015. "Innovative Carbon Allowance Allocation Policy for the Shenzhen Emission Trading Scheme in China," Sustainability, MDPI, vol. 8(1), pages 1-23, December.
    5. Ian W.H. Parry, 2005. "Fiscal Interactions and the Costs of Controlling Pollution from Electricity," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 849-869, Winter.
    6. Kverndokk, Snorre & Rose, Adam, 2008. "Equity and Justice in Global Warming Policy," International Review of Environmental and Resource Economics, now publishers, vol. 2(2), pages 135-176, October.
    7. Bode, Sven, 2006. "Multi-period emissions trading in the electricity sector--winners and losers," Energy Policy, Elsevier, vol. 34(6), pages 680-691, April.
    8. Bohringer, Christoph & Lange, Andreas, 2005. "On the design of optimal grandfathering schemes for emission allowances," European Economic Review, Elsevier, vol. 49(8), pages 2041-2055, November.
    9. Steffen Hentrich & Patrick Matschoss & Peter Michaelis, 2009. "Emissions trading and competitiveness: lessons from Germany," Climate Policy, Taylor & Francis Journals, vol. 9(3), pages 316-329, May.
    10. Tang, Ling & Wu, Jiaqian & Yu, Lean & Bao, Qin, 2017. "Carbon allowance auction design of China's emissions trading scheme: A multi-agent-based approach," Energy Policy, Elsevier, vol. 102(C), pages 30-40.
    11. Salon, Deborah & Sperling, Daniel & Meier, Alan & Murphy, Sinnott & Gorham, Roger & Barrett, James, 2010. "City carbon budgets: A proposal to align incentives for climate-friendly communities," Energy Policy, Elsevier, vol. 38(4), pages 2032-2041, April.
    12. Lawrence H. Goulder & Ian W. H. Parry, 2008. "Instrument Choice in Environmental Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 152-174, Summer.
    13. Philippe Quirion, 2004. "Prices versus Quantities in a Second-Best Setting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 337-360, November.
    14. Philippe Quirion, 2009. "Historic versus output-based allocation of GHG tradable allowances: a comparison," Climate Policy, Taylor & Francis Journals, vol. 9(6), pages 575-592, November.
    15. Palmer, Karen & Burtraw, Dallas & Paul, Anthony, 2009. "Allowance Allocation in a CO2 Emissions Cap-and-Trade Program for the Electricity Sector in California," RFF Working Paper Series dp-09-41, Resources for the Future.
    16. William M. Shobe & Dallas Burtraw, 2012. "Rethinking Environmental Federalism In A Warming World," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-33.
    17. Palmer, Karen L. & Burtraw, Dallas, 2005. "The Environmental Impacts of Electricity Restructuring: Looking Back and Looking Forward," Discussion Papers 10656, Resources for the Future.
    18. Frédéric Branger & Oskar Lecuyer & Philippe Quirion, 2015. "The European Union Emissions Trading Scheme: should we throw the flagship out with the bathwater?," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 6(1), pages 9-16, January.
    19. Ahman, Markus & Burtraw, Dallas & Kruger, Joseph & Zetterberg, Lars, 2007. "A Ten-Year Rule to guide the allocation of EU emission allowances," Energy Policy, Elsevier, vol. 35(3), pages 1718-1730, March.
    20. Gillenwater, Michael & Breidenich, Clare, 2009. "Internalizing carbon costs in electricity markets: Using certificates in a load-based emissions trading scheme," Energy Policy, Elsevier, vol. 37(1), pages 290-299, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:1078-1091. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.