Is Real-Time Pricing Green? The Environmental Impacts of Electricity Demand Variance
- UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
- Stephen P. Holland, Associate Professor (Creator)
- Institution
- The University of North Carolina at Greensboro (UNCG )
- Web Site: http://library.uncg.edu/
Abstract: Real-time pricing (RTP) of electricity would improve allocative efficiency and limit wholesalers’ market power. Conventional wisdom claims that RTP provides additional environmental benefits. This paper argues that RTP will reduce the variance, both within- and across-days, in the quantity of electricity demanded. We estimate the short-run impacts of this reduction on SO2, NOx, and CO2 emissions. Reducing variance decreases emissions in regions where peak demand is met more by oil-fired capacity than by hydropower, such as the Mid-Atlantic. However, reducing variance increases emissions in more U.S. regions, namely those with more hydropower like the West. The effects are relatively small.
Is Real-Time Pricing Green? The Environmental Impacts of Electricity Demand Variance
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Created on 9/10/2010
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Additional Information
- Publication
- Review of Economics and Statistics (2008) 90(3): 550-561.
- Language: English
- Date: 2008
- Keywords
- Real time pricing, Electricity, Economic impact, Environmental impact