To complete this assignment, you will need the excel file ESGPortfolios.xls which describes the variable operating costs, fuel efficiencies, and
CO2 emissions rates of the set of power plants.
The generation capacities of the portfolios ranges from around
2000 MW to almost 4000 MW. Each portfolio contains differing generation technologies with varying operating costs.
In each hourly market, the supply bids of each generator will be used to construct an aggregate supply curve and intersected with a demand
curve.
(i) Suppose all firms bid competitively into the spot market in an hour when demand is 18,200 MWh. What is the market clearing wholesale price?
(ii) Compute the carbon emissions associated with electricity production in this hour.
(iii) Compute the short run profits (i.e. revenues less variable operating costs) earned by ‘Big Coal’ and ‘Fossil Light’ in this hour.
(iv) Now suppose that this market was subject to a carbon tax of $10 per ton of CO2. How would the introduction of this tax a↵ect the market
clearing price, firm profits (at Big Coal and Fossil Light), and total emissions? Please be specific (i.e. compute the new price, profits, and
associated
emissions) as part of your answer.
Capacity Heat Rate Fuel Price Fuel Cost Var O&M Total Var Cost Carbon Fixed
UNIT NAME MW (MMBTU/ $/MMBTU $/MWh $/MWH $/MWH tons/MWH O&M/Day ($)
MWh)
Big Coal
FOUR CORNERS 1900 11.67 3.00 35.00 1.50 36.50 1.10 $8,000
ALAMITOS 7 250 16.05 4.50 72.22 1.50 73.72 0.85 $0
HUNTINGTON BEACH 1&2 300 8.67 4.50 39.00 1.50 40.50 0.46 $2,000
HUNTINGTON BEACH 5 150 14.44 4.50 65.00 1.50 66.50 0.77 $2,000
REDONDO 5&6 350 8.99 4.50 40.44 1.50 41.94 0.48 $3,000
REDONDO 7&8 950 8.99 4.50 40.44 1.50 41.94 0.48 $5,000
Totals 3900 $20,000
Big Gas
EL SEGUNDO 1&2 400 9.63 4.50 43.33 1.50 44.83 0.51 $1,000
EL SEGUNDO 3&4 650 8.83 4.50 39.72 1.50 41.22 0.47 $1,000
LONG BEACH 550 11.56 4.50 52.00 0.50 52.50 0.61 $2,000
NORTH ISLAND 150 14.44 4.50 65.00 0.50 65.50 0.77 $0
ENCINA 950 9.15 4.50 41.17 0.50 41.67 0.49 $2,000
KEARNY 200 19.90 4.50 89.56 0.50 90.06 1.06 $0
SOUTH BAY 700 9.63 4.50 43.33 0.50 43.83 0.51 $2,000
Totals 3600 $8,000
Bay Views
MORRO BAY 1&2 335 8.51 4.50 38.28 0.50 38.78 0.45 $2,000
MORRO BAY 3&4 665 8.02 4.50 36.11 0.50 36.61 0.43 $4,000
MOSS LANDING 6 750 6.90 4.50 31.06 1.50 32.56 0.37 $8,000
MOSS LANDING 7 750 6.90 4.50 31.06 1.50 32.56 0.37 $8,000
OAKLAND 150 13.48 4.50 60.67 0.50 61.17 0.72 $0
Totals 2650 $22,000
Beachfront
COOLWATER 650 9.31 4.50 41.89 0.50 42.39 0.49 $2,000
ETIWANDA 1-4 850 9.15 4.50 41.17 1.50 42.67 0.49 $8,000
ETIWANDA 5 150 13.64 4.50 61.39 1.50 62.89 0.72 $1,000
ELLWOOD 300 16.69 4.50 75.11 0.50 75.61 0.89 $0
MANDALAY 1&2 300 8.35 4.50 37.56 1.50 39.06 0.44 $1,000
MANDALAY 3 150 11.23 4.50 50.56 1.50 52.06 0.60 $1,000
ORMOND BEACH 1 700 8.35 4.50 37.56 0.50 38.06 0.44 $7,000
ORMOND BEACH 2 700 8.35 4.50 37.56 0.50 38.06 0.44 $7,000
Totals 3800 $27,000
East Bay
PITTSBURGH 1-4 650 8.99 4.50 40.44 0.50 40.94 0.48 $2,500
PITTSBURGH 5&6 650 8.02 4.50 36.11 0.50 36.61 0.43 $2,500
PITTSBURGH 7 700 13.16 4.50 59.22 0.50 59.72 0.70 $4,000
CONTRA COSTA 4&5 150 12.84 4.50 57.78 0.50 58.28 0.68 $1,000
CONTRA COSTA 6&7 700 8.67 4.50 39.00 0.50 39.50 0.46 $6,000
POTRERO HILL 150 15.41 4.50 69.33 0.50 69.83 0.82 $0
Totals 3000 $16,000
Old Timers
BIG CREEK 1000 N/A 0.00 0.00 0.00 0.00 0.00 $15,000
MOHAVE 1 750 10.00 3.00 30.00 4.50 34.50 0.94 $15,000
MOHAVE 2 750 10.00 3.00 30.00 4.50 34.50 0.94 $15,000
HIGHGROVE 150 10.91 4.50 49.11 0.50 49.61 0.58 $0
SAN BERNADINO 100 11.88 4.50 53.44 0.50 53.94 0.63 $0
Totals 2750 $45,000
Fossil Light
HUMBOLDT 150 10.43 4.50 46.94 0.50 47.44 0.55 $0
HELMS 800 N/A 0.00 0.00 0.50 0.50 0.00 $15,000
HUNTERS POINT 1&2 150 10.59 4.50 47.67 1.50 49.17 0.56 $1,000
HUNTERS POINT 4 250 16.53 4.50 74.39 1.50 75.89 0.88 $1,000
DIABLO CANYON 1 1000 1.00 7.50 7.50 4.00 11.50 0.00 $20,000
Totals 2350 $37,000
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