Cost Structures for Fossil Fuel-Fired Electric Power Generation

Considine, Timothy J.
April 2000
Energy Journal;2000, Vol. 21 Issue 2, p83
Academic Journal
This paper estimates short- and long-run marginal production costs and returns to scale in electric power generation in the United States. We find substantial short-run diseconomies of scale at high output levels. A relatively large number of small and mid-sized firms have optimal capital stocks below actual levels. In contrast, several large firms have optimal capital stock targets substantially above current levels. These disparities in actual and optimal capital suggest a possible consolidation in the industry.


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