A simple dynamic energy capacity model

James P. Gander

Energy Economics, 2012, vol. 34, issue 1, 78-81

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.

Keywords: Dynamic energy capacity model; Allocation of energy capacity; Shadow price of energy capacity; Energy data correspondence (search for similar items in EconPapers)
JEL-codes: C60 C61 Q40 Q43 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:34:y:2012:i:1:p:78-81

DOI: 10.1016/j.eneco.2011.08.011

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