Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/222461 
Year of Publication: 
2020
Citation: 
[Journal:] Environmental and Resource Economics [ISSN:] 1573-1502 [Volume:] 75 [Issue:] 1 [Publisher:] Springer [Place:] Berlin [Year:] 2020 [Pages:] 183-213
Publisher: 
Springer, Berlin
Abstract: 
We analyze the gross welfare gains from real-time retail pricing in electricity markets where carbon taxation induces investment in variable renewable technologies. Applying a stylized numerical electricity market model, we find a U-shaped association between carbon taxation and gross welfare gains. The benefits of introducing real-time pricing can accordingly be relatively low at relatively high carbon taxes and vice versa. The non-monotonous change in welfare gains can be explained by corresponding changes in the inefficiency arising from “under-consumption” during low-price periods rather than by changes in wholesale price volatility. Our results may cast doubt on the efficiency of ongoing roll-outs of advanced meters in many electricity markets, since net benefits might only materialize at relatively high carbon tax levels and renewable supply shares.
Subjects: 
Real-time pricing
Variable renewable electricity
Carbon tax
Welfare analysis
Partial equilibrium modeling
JEL: 
D04
D10
D47
L10
L51
L94
Q41
Q42
Q47
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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