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On the Dynamics of Competing Energy Sources AgEcon
Tsur, Yacov; Zemel, Amos.
We characterize the dynamics of energy markets in which energy is derived from polluting (fossil) and clean (solar) resources. The analysis is based on geometric optimal control considerations. An important feature of solar energy technologies is that their cost of supply is predominantly due to upfront investment in capital infrastructure (rather than to actual supply rate) and this feature has important implications for the market allocation outcome. In particular, it gives rise to a threshold behavior in that solar energy is adopted only when the price of fossil energy exceeds a certain threshold. Under this condition solar technologies will (eventually) dominate energy supply by driving fossil energy altogether out of the energy sector. A tax on fossil...
Tipo: Working or Discussion Paper Palavras-chave: Fossil and solar energy; Optimal processes; Characteristic curves; Price thresholds; Environmental regulation.; Resource /Energy Economics and Policy.
Ano: 2009 URL: http://purl.umn.edu/55265
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