Electric Utilities: Scale Economies and Diseconomies

Huettner, David A.; Landon, John H.

doi:10.2307/1057736

Cited by 70 publications

(25 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This contrasts with the approach taken in econometrics where generation costs, or more typically plant costs, are broken down using a regression model [30,42,7,4,26,49,40,23,27,35,25].…”

Section: Introductionmentioning

confidence: 99%

Historical costs of coal-fired electricity and implications for the future

2011

View full text Add to dashboard Cite

We study the costs of coal-fired electricity in the United States between 1882 and 2006 by decomposing it in terms of the price of coal, transportation costs, energy density, thermal efficiency, plant construction cost, interest rate, capacity factor, and operations and maintenance cost. The dominant determinants of costs have been the price of coal and plant construction cost. The price of coal appears to fluctuate more or less randomly while the construction cost follows long-term trends, decreasing from 1902 -1970, increasing from 1970 -1990, and leveling off since then. Our analysis emphasizes the importance of using long time series and comparing electricity generation technologies using decomposed total costs, rather than costs of single components like capital. By taking this approach we find that the history of coal-fired electricity costs suggests there is a fluctuating floor to its future costs, which is determined by coal prices. Even if construction costs resumed a decreasing trend, the cost of coal-based electricity would drop for a while but eventually be determined by the price of coal, which fluctuates while showing no long-term trend.

show abstract

“…This contrasts with the approach taken in econometrics where generation costs, or more typically plant costs, are broken down using a regression model [30,42,7,4,26,49,40,23,27,35,25].…”

Section: Introductionmentioning

confidence: 99%

Historical costs of coal-fired electricity and implications for the future

2011

View full text Add to dashboard Cite

show abstract

“…Primeaux (1975), Weiss (1975), Meyer (1975), and Roberts (1986) do not take any urban, geographic or socio-economic variables into account, but only the inputs and outputs of the industry. Huettner and Landon (1978), Kaserman and Mayo (1991) and Kwoka (1996) use regional dummies; while Nelson and Primeaux (1988) and Thompson (1997) use service territory area, and Gilsdorf (1995), Kwoka (2002) and Fraquelli et al (2005) consider density variable in addition to market characteristics.…”

Section: Literature On the Cost Structure Of Electricity Systemsmentioning

confidence: 99%

“…Wells (1977), Huettner and Landon (1978), Guldmann (1985aGuldmann ( , 1988, Filippini and Wild (2001), Folloni and Caldera (2001), Kwoka (2002), andFraquelli et al (2005) consider the impact on distribution costs of different measures of density, such as number of customers per network unit length, total population over the service area, etc. There are a few studies that include more detailed geographic and environmental variables, such as land use (Guldmann, 1988;Filippini and Wild, 2001;Kwoka, 2002),housing characteristics (Guldmann, 1988), and weather (Jamasb et al 2012).…”

Section: Literature On the Cost Structure Of Electricity Systemsmentioning

confidence: 99%

Geography And The Capital Investment Costs Of Urban Energy Infrastructure: The Case Of Electricity And Natural Gas Networks

Senyel

Guldmann

2016

METU JFA

View full text Add to dashboard Cite

“…In support Färe et al (1985) find IRS and decreasing returns-to-scale (DRS), depending on firm ownership. Similarly, Atkinson and Halvorsen (1984) and Huettner and Landon (1978) obtain both IRS and DRS, whereas Sueyoshi and Goto (2013) and Kumbhakar and Tsionas (2016) only find DRS. Outside the United States, there is limited empirical evidence of the scale characteristics of electricity generation.…”

mentioning

confidence: 92%

“…Confirming this finding, Betancourt and Edwards (1987) and Maloney (2001) compare different model specifications in standard regression settings, Kopp and Smith (1980) and Goto and Tsutsui (2008) account for potential inefficiency using SFA, and Hisnanick and Kymn (1999) analyze the interplay of technical change and RTS in productivity growth. Huettner and Landon (1978) and Schmalensee and Joskow (1986) instead argue that increasing unit size reduces reliability, leading in reverse to a smaller optimal unit size with fewer outages. In support Färe et al (1985) find IRS and decreasing returns-to-scale (DRS), depending on firm ownership.…”

mentioning

confidence: 99%

Semi-Parametric Measures of Scale Characteristics of German Natural Gas-Fired Electricity Generation

Seifert

2016

SSRN Journal

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Scale characteristics are key properties of production functions that determine optimal firm sizes, and have considerable policy implications for sectors undergoing restructuring. However, estimates of scale characteristics typically vary with the assumptions of the underlying empirical model. This paper derives estimators of scale efficiency and scale elasticity for semi-parametric stochastic nonsmooth envelopment of data (StoNED) that are based on few assumptions and rely neither on a functional form nor on distributional assumptions, but satisfy basic microeconomic properties. The estimators are applied to a unique sample covering 124 natural gas-fired power plants operating in Germany in 2011. Terms of use: Documents inResults indicate that on average plants operate under constant to slightly decreasing returns-to-scale, and scale inefficiency is found to be overall rather low. However, considerable improvement potential exists due to technical inefficiency. The results allow the strong fragmentation of gas-fired electricity generation in Germany, but emphasize the importance of using best practices on plant level.JEL-Codes: D24,C14,O13,L94

show abstract

Electric Utilities: Scale Economies and Diseconomies

Cited by 70 publications

References 14 publications

Historical costs of coal-fired electricity and implications for the future

Historical costs of coal-fired electricity and implications for the future

Geography And The Capital Investment Costs Of Urban Energy Infrastructure: The Case Of Electricity And Natural Gas Networks

Semi-Parametric Measures of Scale Characteristics of German Natural Gas-Fired Electricity Generation

Contact Info

Product

Resources

About