EconPapers    
Economics at your fingertips  
 

The impact of energy market mergers on “green†producers' cost efficiency incentives: some preliminary results

Kevin Currier and Susanne Rassouli-Currier ()
Additional contact information
Susanne Rassouli-Currier: University of Central Oklahoma

Economics Bulletin, 2016, vol. 36, issue 4, 2474-2481

Abstract: Employing a highly stylized model of an energy oligopoly, we examine the cost efficiency incentives facing renewable energy (RE) (i.e., green) producers under a RE quota implemented via a Feed-in Tariff. In addition, we examine some implications of these incentives. We show that under Cournot competition, green producers have limited incentives to exploit learning-by-doing cost savings, but that a merger between the green producer and a fossil-fuel based (“black†) producer can fully restore these incentives. As expected, the merger leads to higher consumer prices ceteris paribus. However, the enhanced post-merger incentives to exploit cost reduction potential in the green technology leads to lower consumer prices. Policy makers should consider these potential impacts when assessing the potential costs and benefits of mergers between green and black energy producers.

Keywords: Renewable Energy; Cost Incentives; Mergers; Feed-in Tariff; Green Quota (search for similar items in EconPapers)
JEL-codes: Q4 Q5 (search for similar items in EconPapers)
Date: 2016-12-21
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2016/Volume36/EB-16-V36-I4-P239.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-16-00613

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().

 
Page updated 2020-08-03
Handle: RePEc:ebl:ecbull:eb-16-00613