Date of Award

8-2009

Degree Name

Doctor of Philosophy

Department

Economics

First Advisor

Dr. Huizhong Zhou

Second Advisor

Dr. Debasri Mukherjee

Third Advisor

Dr. Bade Shrestha

Abstract

Renewable energy resources have become increasingly important in the effort to provide energy security and to fight global warming. In the last decade environmental policy has increased the support for renewable electricity. At the same time the electricity sector was often subject to antitrust investigation because of relevant market concentration and market power. This dissertation looks at the renewable electricity market to analyze the effect of environmental policy on competition.

The first chapter provides a short introduction to the regulatory schemes employed in electricity markets. The second chapter analyzes the demand side of the electricity market. The estimations show that there was no significant change in the income and price elasticity in the electricity consumption of US households between 1993 and 2001, although there were several policy initiatives designed to increase energy efficiency and decrease consumption.

The third chapter derives a theoretical model where the feed-in tariff and the tradable green certificates system can be analyzed under oligopolistic market structure. The results of this model suggest that the introduction of environmentally friendly regulatory schemes can decrease electricity prices compared to the case where there is no support for renewable energy. The other finding of this model is that the price of electricity rises when the requirement for the use of renewable energy increases.

The fourth chapter employs a simulation model of the UK electricity market to test the effect of mergers and acquisitions under the environmental support scheme. The results emphasize the importance of the capacity limit, because it can constrain the strategic action of electricity producers. The results of this simulation also suggest that increasing concentration can increase the production and lower the price of electricity and renewable energy certificates in the British Renewable Obligation system.

Access Setting

Dissertation-Open Access

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