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Studies in the economics of electricity and heating

Technical Report:

Abstract

This study deals with problems of pricing and capacity planning of electricity and to some extent, heat, as well as with the evalution of research and development projects. A critical review is given of the discussion in the economic literature concerning whether the price for public utilities should be based on short-run (SRMC) or long-run marginal costs (LRMC). We find it advisable to dispense with the LRMC concept altogether and rely on pricing based on SRMC. We deal with the design of such prices, how they depend on peak and off-peak loads, locational differences in production, transmission and distribution costs etc., particularly when both demand and supply are random. Then follows a critical analysis of the high-voltage as well as low-voltage electricity tariffs used in Sweden. The coordinated pricing system used among power producers in the Nordic countries is found to be an almost ideal application of the theory. The problem of deriving an optimal price structure for cogenerated electricity and heat used for district heating in local communities is analyzed together with an attempt to measure short-run welfare gains of switching from the existing price structure in a stylized local community to the optimal price structure. A critical review  More>>
Authors:
Andersson, Roland; Bohman, M; Taylor, L [1] 
  1. Stockholm Univ. (Sweden). Dept. of Economics
Publication Date:
Dec 31, 1992
Product Type:
Technical Report
Report Number:
BFR-D-8-92
Reference Number:
SCA: 296000; 240700; PA: SWD-92:007284; SN: 93000918369
Resource Relation:
Other Information: PBD: 1992
Subject:
29 ENERGY PLANNING, POLICY AND ECONOMY; 24 POWER TRANSMISSION AND DISTRIBUTION; COGENERATION; RATE STRUCTURE; ELECTRIC UTILITIES; PLANNING; MARGINAL-COST PRICING; SOCIO-ECONOMIC FACTORS; CAPACITY; ECONOMY; EVALUATION; 296000; 240700; ELECTRIC POWER; ECONOMIC, INDUSTRIAL, AND BUSINESS ASPECTS
OSTI ID:
10113762
Research Organizations:
Swedish Council for Building Research, Stockholm (Sweden)
Country of Origin:
Sweden
Language:
English
Other Identifying Numbers:
Other: ON: DE93753058; TRN: SE9207284
Availability:
OSTI; NTIS; INIS
Submitting Site:
SWD
Size:
223 p.
Announcement Date:
Jun 30, 2005

Technical Report:

Citation Formats

Andersson, Roland, Bohman, M, and Taylor, L. Studies in the economics of electricity and heating. Sweden: N. p., 1992. Web.
Andersson, Roland, Bohman, M, & Taylor, L. Studies in the economics of electricity and heating. Sweden.
Andersson, Roland, Bohman, M, and Taylor, L. 1992. "Studies in the economics of electricity and heating." Sweden.
@misc{etde_10113762,
title = {Studies in the economics of electricity and heating}
author = {Andersson, Roland, Bohman, M, and Taylor, L}
abstractNote = {This study deals with problems of pricing and capacity planning of electricity and to some extent, heat, as well as with the evalution of research and development projects. A critical review is given of the discussion in the economic literature concerning whether the price for public utilities should be based on short-run (SRMC) or long-run marginal costs (LRMC). We find it advisable to dispense with the LRMC concept altogether and rely on pricing based on SRMC. We deal with the design of such prices, how they depend on peak and off-peak loads, locational differences in production, transmission and distribution costs etc., particularly when both demand and supply are random. Then follows a critical analysis of the high-voltage as well as low-voltage electricity tariffs used in Sweden. The coordinated pricing system used among power producers in the Nordic countries is found to be an almost ideal application of the theory. The problem of deriving an optimal price structure for cogenerated electricity and heat used for district heating in local communities is analyzed together with an attempt to measure short-run welfare gains of switching from the existing price structure in a stylized local community to the optimal price structure. A critical review presents concepts and methods used to assess the social costs of unsupplied electricity. Methods for dimensioning production capacity for electricity energy in an efficient way, and the problems of dimensioning production capacity for electricity in a socially optimal way are discussed. We then go on to examine the investment criteria used by the Swedish power industry. We also analyze criteria for appraisal of energy R and D projects from a governments perspective and present a model based on sequential decision making for evaluating uncertain energy R and D projects. (au) (138 refs., 45 figs. 18 tabs.).}
place = {Sweden}
year = {1992}
month = {Dec}
}