DOI: 10.1016/j.enpol.2021.112371
论文题名: Paid to produce absolutely nothing? A Nash-Cournot analysis of a proposed power purchase agreement
作者: Chaiken B. ; Duggan J.E. ; Jr. ; Sioshansi R.
刊名: Energy Policy
ISSN: 03014215
出版年: 2021
卷: 156 语种: 英语
中文关键词: Energy subsidy
; Incentives
; Market design
; Nash-cournot equilibrium
; Power purchase agreement
; Regulation
英文关键词: Costs
; Power markets
; Profitability
; Energy subsidies
; Generating firms
; Incentive
; Market behaviours
; Market design
; Nash Cournot
; Nash cournot equilibrium
; Power purchase agreement
; Regulation
; Welfare effects
; Sales
英文摘要: We investigate the incentive, market-behavior, and welfare effects of a proposed profit guarantee and associated power purchase agreement (PPA), which was introduced to ensure that generating firms remain viable through periods of higher-than-normal costs. The PPA ensures a guaranteed profit level either by transferring excess revenues from the affected firms to consumers or levying a surcharge on consumers to fund a subsidy for the affected firms. We develop and analyze a stylized Nash-Cournot model of a wholesale electricity market to examine the incentive effects of the proposed PPA. We find that the proposed PPA has incentive impacts that are contrary to its stated aim. The PPA incentivizes uneconomic firms to remain in the market when otherwise they would exit and incentivizes the shutdown of otherwise economically viable firms to restrict output, increasing prices. We find that the effects are pronounced by the corporate-separation asset-ownership structure that is employed in many jurisdictions. The theoretical results of the Nash-Cournot analysis are illustrated with a numerical case study which shows the deleterious consumer- and social-welfare effects of this incentive scheme. We discuss practical implications for regulatory policy, namely, that the proposed mechanism is ill-conceived, inefficient, and creates perverse incentives. © 2021 Elsevier Ltd Citation statistics:
资源类型: 期刊论文
标识符: http://119.78.100.158/handle/2HF3EXSE/167716
Appears in Collections: 气候变化与战略
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作者单位: Department of Integrated Systems Engineering, The Ohio State University, 1971 Neil Avenue, Columbus, OH 43210, United States; Department of Economics and Finance, University of Dayton, 300 College Park, Dayton, OH 45469, United States; Hanley Sustainability Institute, University of Dayton, 300 College Park, Dayton, OH 45469, United States
Recommended Citation:
Chaiken B.,Duggan J.E.,Jr.,et al. Paid to produce absolutely nothing? A Nash-Cournot analysis of a proposed power purchase agreement[J]. Energy Policy,2021-01-01,156