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Coordination of Non-Utility Generation Through Priority Purchase Contracts

Abstract:
This paper proposes the use of priority purchase contracts as a means to coordinate utility purchases from non-utility generators. It is shown that differentiated contracts should have the potential for attracting more diverse, NUG proposals (in terms of technical and economic characteristics). It is also argued that differentiated contracts should permit better integration and coordination of NUG capacity since they come closer to mimicking the utility's resource allocation problem. Several areas for future research are suggested.

Purchase ( $25 )

Energy Specializations: Electricity – Distributed Generation; Electricity – Markets and Prices

JEL Codes:
L94 - Electric Utilities
D42 - Market Structure, Pricing, and Design: Monopoly

Keywords: Electricity. Non-utility generation, Priority purchase contracts, policy

DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No1-11


Published in Volume15, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.