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Efficiency and Environmental Impacts of Electricity Restructuring on Coal-Fired Power Plants

Hei Sing Chan (), Harrison Fell (), Ian Lange () and Shanjun Li ()

No 4160, CESifo Working Paper Series from CESifo

Abstract: We investigate the impacts of electricity market restructuring on fuel efficiency, utilization and, new to this area, cost of coal purchases among coal-fired power plants using a panel data set from 1991 to 2005. Our study focuses exclusively on coal-fired power plants and uses panel data covering several years after implementation of restructuring. The estimation compares how investor-owned (IOs) plants in states with restructuring changed their behavior relative to IOs in states without. Our analysis finds that restructuring led to: (1) a two percent improvement in fuel efficiency for IOs, (2) a ten percent decrease in unit cost of heat input, and (3) a lower capacity factor even after adjusting for cross-plant generation re-allocation due to cost reductions. Based on these estimates, back-of-the-envelope calculations find that restructuring has led to about 6.5 million dollars in annual cost savings or nearly 12 percent of operating expenses and up to a 7.6 percent emissions reduction per plant.

Keywords: restructuring; efficiency; cost; utilization; emissions (search for similar items in EconPapers)
JEL-codes: L50 Q40 Q50 (search for similar items in EconPapers)
Date: 2013
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Journal Article: Efficiency and environmental impacts of electricity restructuring on coal-fired power plants (2017) Downloads
Working Paper: Effciency and Environmental Impacts of Electricity Restructuring on Coal-Fired Power Plants (2013) Downloads
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