The Environmental Impacts of Fuel Switching Power Plants

J Holladay and Steven Soloway ()
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Steven Soloway: School of Law, New York University

No 2015-05, Working Papers from University of Tennessee, Department of Economics

Abstract: We examine the environmental and policy impacts of switching from oil-fired to natural gas-fired generation in New York City (NYC). We create an hourly panel of the fuel use of NYC’s generators and use a semi-parametric approach to identify the fuel price spread that induces the switch from oil to gas. We find that NYC’s pollution emissions decrease significantly after switching to natural gas. Around two-thirds of these emission reductions come from reduced emission intensity within plants, while the remaining third comes from less intense dispatch of oil fired generators. To illustrate the policy impact, we simulate the introduction of a real time pricing (RTP) program in NYC. The results suggest that the environmental benefits of the RTP decreased by nearly 30% due largely to fuel switching. While we focus on RTP, these results can be used to evaluate any energy policy that has a heterogeneous impact across time or the demand profile.

JEL-codes: L9 Q4 Q5 (search for similar items in EconPapers)
Date: 2015-05-13
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 (2)

Forthcoming Energy Journal

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http://web.utk.edu/~jhollad3/Fuel_Switching.pdf First version, 2015 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ten:wpaper:2015-05

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