Economics of Power Generation

Manfred Hafner () and Giacomo Luciani ()
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Manfred Hafner: SciencesPo—Paris School of International Affairs
Giacomo Luciani: SciencesPo—Paris School of International Affairs

Chapter Chapter 5 in The Palgrave Handbook of International Energy Economics, 2022, pp 103-109 from Springer

Abstract: Abstract This chapter provides an introduction to the economics of electricity generation, presenting the major economic differences between the multiple power generation solutions and highlighting the comparative advantages and disadvantages of each. In order to provide a satisfactory treatment of power generation technology and economics, a single chapter would have expanded beyond a practical dimension: accordingly the discussion has been divided into a general introduction and a sequence of specific chapters each devoted to a different generation solution: thermal power based on fossil fuels (coal, oil, and gas), thermal power based on nuclear fission, hydroelectricity chapter, solar power, wind power, geothermal power, and power from tides and waves. The present introductory chapter explains where on the load curve the different power generation options should be placed depending on costs, the issue of dispatchability, as well as the difference in the economic cost approach between dispatching and future capacity planning. Also flexibility mechanisms to integrate a large share of non-dispatchable renewable energy sources are discussed. Finally, issues related to space occupation and locational constraints are addressed.

Keywords: Power plants; Power generation; Electricity; Economic analysis; Dispatchability; Dispatching; Capacity planning; Space occupation; Long-run marginal cost; Short-run marginal cost; Merit order; Transmission System Operator (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-86884-0_5

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DOI: 10.1007/978-3-030-86884-0_5

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