Technology choice in electricity generation under different market conditions

In this paper we present a multi-period, multi-region model of cost-minimizing new investment in electricity generation capacity, efficient plant dispatch subject to environmental constraints, and interregional power exchanges. We illustrate the model's use by applying it to a nine-state region in the eastern U.S. A key feature of the modeling framework is a detailed stochastic sensitivity analysis. The main conclusions from our application are that some ‘new’ generation technologies appear to have significant cost advantages over technologies now being widely used, and that expanded interregional power exchanges may convey significant cost savings if the requisite transmission capacity is available.