The Fall of Coal: Joint Impacts of Fuel Prices and Renewables on Generation and Emissions


American Economic Journal: Economic Policy
2018 10(2), 90-116

Abstract:

Since 2007, US coal-fired electricity generation has declined by a stunning 25 percent. Detailed daily unit-level data is used to examine the joint impact of natural gas prices and wind generation on coal-fired generation and emissions, with a focus on the interaction between gas prices and wind. This interaction is found to be significant. Marginal responses of coal-fired generation to natural gas prices (wind) in 2013 were larger, sometimes much larger, than the counterfactual with 2008 wind generation (gas prices). Additionally, these factors jointly account for the vast majority of the observed decline in generation and emissions.