EconPapers    
Economics at your fingertips  
 

Costs and benefits of saving unprofitable generators: A simulation case study for US coal and nuclear power plants

Daniel L. Shawhan and Paul D. Picciano

Energy Policy, 2019, vol. 124, issue C, 383-400

Abstract: We use a detailed power sector model, E4ST, to project multi-decade effects of preventing a set of unprofitable generators from retiring. We simulate the “Grid Resiliency Pricing Rule” proposed by the US Department of Energy in 2017, and several variations, as an illustrative case study for similar national, regional, or state policies in the US or elsewhere. In the proposed policy, eligible coal and nuclear generators would be guaranteed revenues sufficient to ensure profitability. The simulation results show that, in 2025, $7.6 billion in subsidy is required to guarantee coal and nuclear generator profits. If in effect from 2020 to 2045, the policy delays the retirement of 25 GW of coal capacity and 21 GW of nuclear capacity, causes 27,000 premature deaths, increases carbon dioxide emissions by 420 million short tons, and has costs with a net present value of $263 billion during that period. The policy's net non-environmental cost for electricity end-users is $72 billion and net benefit for generation owners is $28 billion. In alternative scenarios, preventing retirement of only nuclear capacity produces positive total net benefit, while guaranteeing recovery of only going-forward costs shifts $77 billion of costs from customers to generators, but does not reduce emissions or total net cost.

Keywords: Simulation modeling; Electric power sector; Coal and nuclear subsidy; Cost-benefit analysis; Premature mortality; Environmental damage (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421518304865
Full text for ScienceDirect subscribers only

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:eee:enepol:v:124:y:2019:i:c:p:383-400

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-01-19
Handle: RePEc:eee:enepol:v:124:y:2019:i:c:p:383-400