Three Essays on Renewable Energy Policy and its Effects on Fossil Fuel Generation in Electricity Markets

Abstract

In this dissertation, I investigate the effectiveness of renewable policies and consider their impact on electricity markets. The common thread of this research is to understand how renewable policy incentivizes renewable generation and how the increasing share of generation from renewables affects generation from fossil fuels. This type of research is crucial for understanding whether policies to promote renewables are meeting their stated goals and what the unintended effects might be. To this end, I use econometric methods to examine how electricity markets are responding to an influx of renewable energy. My dissertation is composed of three interrelated essays. In Chapter 1, I employ recent scholarship in spatial econometrics to assess the spatial dependence of Renewable Portfolio Standards (RPS), a prominent state-based renewable incentive. In Chapter 2, I explore the impact of the rapid rise in renewable generation on shortrun generation from fossil fuels. And in Chapter 3, I assess the impact of renewable penetration on coal plant retirement decisions. I would first like to thank my committee, which has been a source of inspiration during the process of writing this dissertation. Stratford Douglas has spent numerous hours shaping this project from the beginnings of an idea to fruition. Donald Lacombe has provided many suggestions for improvement. Wesley Burnett has been a source of wisdom throughout. John Deskins has been a great colleague, in addition to being a helpful committee member. Lastly, Brian Cushing has believed all along that I could make it. Several other people were instrumental in helping me along this road. Mark Witte helped spark a lifelong interest in economics. George Hammond helped me decide to go back to school to study economics. Randall Jackson gave me my first paying job as an economist, and Tom Witt gave me my second. Nancy McIntyre kept asking me if I was done yet. Zheng Tian and Christa Jensen Court were fantastic RRI office-mates and friends. Kirill Temlyakov played a mean game of chess. The Adams-Pellillo and Hofferhelped get me through my coursework. And to Annie Walker, who understood the difficulties of going back to school as a non-whippersnapper: I treasure our friendship. I also want to thank my many parents, Barbara and Steve Benjamin, Steve Bowen and Isa Fernandez, and Margo Brinton. In particular, mom, thank you for coming to my aid in the dark days toward the end when I was not sure I would ever get finished. I also thank Jan and Len Carpenter, who have put up with their moody son-in-law through many years of work. And I thank my sister, Kristine Bowen, who has been supportive during this time of transition. Thank you all for being great parents, grandparents, and siblings. Finally, this dissertation is dedicated above all to my wife, Cari Carpenter, and my daughter, Adalyn Carpenter-Bowen. Cari, I know you know how much I have relied on you to keep me going and sane through the times I thought about quitting. I hope you also know how much it has meant to me, and how ...