Forecasting the market for SO sub 2 emission allowances under uncertainty
This paper deals with the effects of uncertainty and risk aversion on market outcomes for SO{sub 2} emission allowance prices and on electric utility compliance choices. The 1990 Clean Air Act Amendments (CAAA), which are briefly reviewed here, provide for about twice as many SO{sub 2} allowances to be issued per year in Phase 1 (1995--1999) than in Phase 2. Considering the scrubber incentives in Phase 1, there is likely to be substantial emission banking for use in Phase 2. Allowance prices are expected to increase over time at a rate less than the return on alternative investments, so utilities which are risk neutral, or potential speculators in the allowance market, are not expected to bank allowances. The allowances will be banked by utilities that are risk averse. The Argonne Utility Simulation Model (ARGUS2) is being revised to incorporate the provisions of the CAAA acid rain title and to simulate SO{sub 2} allowance prices, compliance choices, capacity expansion, system dispatch, fuel use, and emissions using a unit level data base and alternative scenario assumptions. 1 fig.
- Research Organization:
- Argonne National Lab., IL (United States)
- Sponsoring Organization:
- USDOE; USDOE, Washington, DC (United States)
- DOE Contract Number:
- W-31109-ENG-38
- OSTI ID:
- 5135815
- Report Number(s):
- ANL/CP-74369; CONF-9110144-1; ON: DE92000261
- Resource Relation:
- Conference: 8. electric utility forecasting symposium, Baltimore, MD (United States), 23-25 Oct 1991
- Country of Publication:
- United States
- Language:
- English
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29 ENERGY PLANNING
POLICY AND ECONOMY
99 GENERAL AND MISCELLANEOUS//MATHEMATICS, COMPUTING, AND INFORMATION SCIENCE
AIR POLLUTION CONTROL
COST ESTIMATION
ENERGY CONSUMPTION
MATHEMATICAL MODELS
FOSSIL-FUEL POWER PLANTS
EMISSION
ACID RAIN
COMPLIANCE
COMPUTERIZED SIMULATION
COST RECOVERY
ELECTRIC UTILITIES
RISK ASSESSMENT
SCRUBBERS
SULFUR DIOXIDE
US CLEAN AIR ACT
ATMOSPHERIC PRECIPITATIONS
CHALCOGENIDES
CONTROL
EQUIPMENT
LAWS
OXIDES
OXYGEN COMPOUNDS
POLLUTION CONTROL
POLLUTION CONTROL EQUIPMENT
POLLUTION LAWS
POWER PLANTS
PUBLIC UTILITIES
RAIN
SIMULATION
SULFUR COMPOUNDS
SULFUR OXIDES
THERMAL POWER PLANTS
200600* - Fossil-Fueled Power Plants- Economic
Industrial
& Business Aspects- (1990-)
290300 - Energy Planning & Policy- Environment
Health
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296000 - Energy Planning & Policy- Electric Power
990200 - Mathematics & Computers