Elasticity of substitution and technical efficiency: evidence from the US electricity generation

Mugabe, Douglas; Elbakidze, Levan; Zaynutdinova, Gulnara R.

doi:10.1080/00036846.2019.1678733

Cited by 10 publications

(9 citation statements)

References 65 publications

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“…All other squares of input variables and interaction between them are insignificant for half-normal and truncated normal distribution of the trans-log production model. Mugabe et al [23] showed that state-level elasticity of substitution between natural gas and coal has a positive effect on technical efficiency and a negative effect on CO 2 emissions using state-level data. See and Coelli [24] showed ownership, plant size, and fuel type have a significant influence on technical efficiency levels.…”

Section: Resultsmentioning

confidence: 99%

The Measures of Efficiency of Power Generation Plants in Sylhet of Bangladesh

Ferdushi

Kamil

Ahmed

et al. 2020

International Journal of Mathematics and Mathematical Sciences

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This study measures the performance of power generation plants in Sylhet region of Bangladesh considering twenty-four-month monthly dataset during 2013-14. To measure the performance of those plants, gross electricity generation was considered as output for the stochastic frontier model, whereas fuel consumption, lube oil consumption, auxiliary consumption, cost, heat rate, and hours of run were considered as input variables. Based on the log-likelihood hypothesis test, trans-log production model is preferred over Cobb–Douglas (C-D) production model for this study. The average efficiency of the selected plants is above 90 percent, and there is Sylhet Combined Cycle Power Plant (CCPP) which has an efficiency of about 78.6 percent for truncated normal distribution. In the time-variant inefficiency effects model, fuel consumption, cost, square product of lube oil consumption, interaction between fuel consumption and lube oil consumption as well as auxiliary consumption, and hours of run have a significant positive influence on power generation. On the other hand, some input variables such as hours of run and interaction between cost and heat rate have a significant negative influence on power generation. The estimated values of the time-varying inefficiency parameter η are positive for both the truncated and the half-normal distribution. This result indicates that technical efficiency has declined over the reference period of the study.

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Section: Resultsmentioning

confidence: 99%

The Measures of Efficiency of Power Generation Plants in Sylhet of Bangladesh

Ferdushi

Kamil

Ahmed

et al. 2020

International Journal of Mathematics and Mathematical Sciences

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“…In a relatively recent study, Mugabe et al 32 examined the relative technical efficiency and fuels substitution potentials in the U.S electricity generation sector. Employing a panel of annual state-level data that covers the period 2001 to 2017, the study observed different state level substitution elasticities from the pre-2009 to post-2009 periods which was attributed to spatial heterogenous of the continuous availability of relatively cheaper natural gas for electricity production.…”

Section: Literature Reviewmentioning

confidence: 99%

Searching for sustainable electricity generation: The possibility of substituting coal and natural gas with clean energy

Bello

Solarin

2021

Energy & Environment

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It is now a common consensus that there is a need to lessen the consumption of fossil fuels as they are the main cause of greenhouse gases. Electricity is one of the chief determinants of greenhouse gases emission as its generation is dominated by fossil fuels. Thus, it is imperative to decarbonize the electric power sector. The main objective of this work is, therefore, to examine the potentials to switch from fossil fuels to clean energy which comprises of nuclear power and the various renewable energy sources of solar energy, hydropower, wind energy, biofuels, and geothermal. Due to the unsuitability of the ordinary least squares (OLS) procedure in the face of severe multicollinearity, the ridge regression procedure was adopted to obtain the parameter estimates using the U.S. annual electricity sector data for the period 1985 to 2018. The results show that substantial substitution exists between clean energy and the fossil fuels of coal and natural gas in the U.S. electricity sector. The results also underscore the importance of energy resource in the process of economic growth and development of U.S. To fully harness the potentials of clean energy, the study recommends increased investment in each of the components of clean energy. This should be complemented with various policy instruments such as provisions of tax credits and feed-in tariffs for clean energy and imposition of tax on carbon consumption.

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“…There are even studies that have concentrated on the feasibility of substituting electricity generation from one source of nonrenewable energy with another source of nonrenewable energy. For instance, Mugabe et al ( 2020 ) illustrated that it is possible to substitute coal with natural gas in the USA.…”

Section: Introductionmentioning

confidence: 99%

Wind energy and sustainable electricity generation: evidence from Germany

Solarin

Bello

2021

Environ Dev Sustain

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Wind energy is one of the renewable energy sources that has been touted to address the challenges of energy security and environmental degradation. This is only attainable if countries with substantial wind energy potential use it in significant proportion to satisfy their energy needs. One promising sector where wind energy can be employed to actualize this potential is the electricity sector. However, the current reality is that fossil fuels still dominate the energy profiles of most economies of the world, including the advanced economies, with wind renewable energy source accounting for a very small proportion of the energy mix. Germany is one of the few countries that offers promising opportunities in deploying wind energy to its full potentials. This study therefore explores the feasibility of substituting wind energy for nuclear energy and other fossil fuels using Germany as a country of focus. We use the ridge regression procedure to analyse yearly time series data for the German power sector that spans the period 1986 to 2018. With respect to output elasticities of the energy inputs, the results reveal that wind and natural gas have positive output elasticity estimates while the estimates for nuclear and coal are negative. We also found that all the inputs pairs have positive substitution elasticity estimates between them. With respect to wind energy, the highest substitutability estimate occurred with nuclear power which is followed by natural gas and then coal. The study recommended that policies such as granting of tax credit for wind energy technology, reduction in property taxes for wind power facilities, and allocation of fund for research and development (R&D) in wind energy technology are recommended to promote the use of wind energy in the economy.

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Elasticity of substitution and technical efficiency: evidence from the US electricity generation

Cited by 10 publications

References 65 publications

The Measures of Efficiency of Power Generation Plants in Sylhet of Bangladesh

The Measures of Efficiency of Power Generation Plants in Sylhet of Bangladesh

Searching for sustainable electricity generation: The possibility of substituting coal and natural gas with clean energy

Wind energy and sustainable electricity generation: evidence from Germany

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