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Renewable Energy Policies for the Electricity, Transportation, and Agricultural Sectors: Complements or Substitutes

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  • Oliver, Anthony
  • Khanna, Madhu

Abstract

Renewable Portfolio Standards (RPSs) have been enacted in 29 states in the US, in part to encourage an increase in the amount of electricity generated from renewable sources. Biomass can be utilized in a dedicated bio-power plant to generate electricity, co-fired with coal at an existing power plant, or used to produce cellulosic ethanol that also yields co-product electricity. Considering these options along with a detailed national model of agricultural biomass production allows for the simulation of the effect of existing policies on electricity based biomass demand. Using a multi-period, multi-market, price endogenous model of the U.S. agricultural, electricity, and transportation sectors, the effect of existing state-level RPS is evaluated along with the implications for the agriculture sector. It is found that RPSs increase generation from both biomass and wind-based electricity generation, while decreasing the amount of generation from natural gas, and coal. Due to the co-product electricity generation a greater amount of electricity is generated from biomass under the RFS & RPS scenario than the RPS scenario even though biomass prices are higher.

Suggested Citation

  • Oliver, Anthony & Khanna, Madhu, 2013. "Renewable Energy Policies for the Electricity, Transportation, and Agricultural Sectors: Complements or Substitutes," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150406, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:150406
    DOI: 10.22004/ag.econ.150406
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    References listed on IDEAS

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    Keywords

    Environmental Economics and Policy; Resource/Energy Economics and Policy;

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