IDEAS home Printed from https://ideas.repec.org/a/ucp/jaerec/doi10.1086-730158.html
   My bibliography  Save this article

Backup Power: Public Implications of Private Substitutes for Electric Grid Reliability

Author

Listed:
  • Paul A. Brehm
  • Sarah Johnston
  • Ross Milton

Abstract

Private substitutes for electric grid reliability are common. We study their adoption and distributional implications. We first show that US households buy substitutes in response to a perceived decrease in grid reliability and that higher-income households are more likely to adopt them. We then develop a theoretical model of public provision of grid reliability in the presence of private substitutes that is consistent with these facts. The existence of substitutes increases aggregate welfare and reduces the efficient level of reliability spending. Using a calibrated version of the model, we find that, even though only a few households adopt batteries, most nonadopting households benefit from their availability. Battery adoption reduces utilities’ reliability spending, resulting in lower electricity bills for all customers. Most nonadopting households value these bill savings more than the reduced grid reliability.

Suggested Citation

  • Paul A. Brehm & Sarah Johnston & Ross Milton, 2024. "Backup Power: Public Implications of Private Substitutes for Electric Grid Reliability," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 11(6), pages 1419-1445.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/730158
    DOI: 10.1086/730158
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/730158
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/730158
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/730158?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.

    Citations

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


    Cited by:

    1. Brown, David P. & Muehlenbachs, Lucija, 2023. "The Value of Electricity Reliability: Evidence from Battery Adoption," Working Papers 2023-5, University of Alberta, Department of Economics, revised 26 Jul 2024.

    More about this item

    Statistics

    Access and download statistics

    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:ucp:jaerec:doi:10.1086/730158. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JAERE .

    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.