Supply Curves for Conserved Electricity

Anthony Paul (), Karen Palmer and Matt Woerman
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Anthony Paul: Resources for the Future

RFF Working Paper Series from Resources for the Future

Abstract: In this paper, we introduce a new top-down approach to modeling the effects of publicly financed energy-efficiency programs on electricity consumption and carbon dioxide emissions. The approach draws on a partial-adjustment econometric model of electricity demand and represents the results of a reverse auction for electricity savings from different levels of public investment. The model is calibrated to recent estimates of the cost-effectiveness of rate payer–funded efficiency programs at reducing electricity consumption. The results suggest that supply curves for conserved electricity are upward sloping, convex, and dependent on policy design and electricity prices. Under the scenarios modeled, electricity savings of between 1 and 3 percent are achievable at a marginal cost of $50 per megawatt hour (MWh) and a corresponding average cost of $25–$35/MWh.

Keywords: energy efficiency; climate change (search for similar items in EconPapers)
JEL-codes: Q41 Q48 Q58 (search for similar items in EconPapers)
Date: 2011-04-07
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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