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Electricity Prices, River Temperatures, and Cooling Water Scarcity

Grant R. McDermott and Øivind A. Nilse
Authors registered in the RePEc Author Service: Øivind Anti Nilsen ()

Land Economics, 2014, vol. 90, issue 1, 131-148

Abstract: Thermal-based power stations rely on water for cooling purposes. These water sources may be subject to incidents of scarcity, environmental regulations, and competing economic concerns. This paper analyzes the effect of water scarcity and increased river temperatures on German electricity prices from 2002 to 2009. Having controlled for demand effects, the results indicate that the electricity price is significantly impacted by both a change in river temperatures and the relative abundance of river water. An implication is that future climate change will affect electricity prices not only through changes in demand, but also via increased water temperatures and scarcity.

JEL-codes: Q25 Q41 (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: Electricity Prices, River Temperatures and Cooling Water Scarcity (2012) Downloads
Working Paper: Electricity Prices, River Temperatures and Cooling Water Scarcity (2011) Downloads
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