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| Author: | Fuller, D. A. |
| Title: | Alternative scale measures and the behaviour of average costs in steam electric generation. |
| Journal: | Energy Economics
1991 : JAN, VOL. 13:1, p. 61-68 |
| Index terms: | ELECTRICITY SUPPLY INDUSTRY ECONOMIES OF SCALE COST EFFECTIVENESS |
| Language: | eng |
| Abstract: | A lack of consensus exists in studies of electricity generation concerning the appropriate measure of scale: cumulative output or generation capacity. It is argued in the paper that the correct measure of scale is dictated by technical characteristics of the output and institutional constraints. While for many products cumulative output is appropriate, the inability to store electricity and the institutional requirement that instantaneous demand be satisfied suggests that generation capacity is the correct measure of scale. Two models of coal-fired plant technology under emissions constraints are estimated using alternative measures of scale. The result indicates that models which use cumulative output over-estimate the economy of scale. |
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