Korea offers a useful contrast. The country began restructuring in 2001 but never completed it. The wholesale market is a cost-based pool where dispatch is competitive but investment decisions are heavily influenced, and at times directly driven, by government planning. New standalone LNG combined-cycle permits are effectively frozen. The one exception: coal retirements. The government is deliberately shutting down coal on carbon and local opposition grounds, and grants new LNG permits only to match retiring coal capacity. Where market design is incomplete, the transition path defaults to administrative allocation. Your thesis holds from the opposite direction.
I’m wondering if this transition from coal to gas in marker based regions is not also strongly pushed by risk matters ? We know since Roques & Finon (2008, something like that) that gas plants have a natural hedge against power price volatility, and as a consequence are more likely to thrive in free markets. What do you think? Do you control for that?
Korea offers a useful contrast. The country began restructuring in 2001 but never completed it. The wholesale market is a cost-based pool where dispatch is competitive but investment decisions are heavily influenced, and at times directly driven, by government planning. New standalone LNG combined-cycle permits are effectively frozen. The one exception: coal retirements. The government is deliberately shutting down coal on carbon and local opposition grounds, and grants new LNG permits only to match retiring coal capacity. Where market design is incomplete, the transition path defaults to administrative allocation. Your thesis holds from the opposite direction.
That’s a really interesting observation, thank you.
A thoughtful work Lynne. Always enjoyable to read.
Energy is not simplistic and we're more effective studying reality - since it's socio economic physics.
Carbon is a function of technology adoption curve - combined cycle gas turbines. Next should come solar/battery impacting the evening peaker plants.
Very good work, thank you.
I’m wondering if this transition from coal to gas in marker based regions is not also strongly pushed by risk matters ? We know since Roques & Finon (2008, something like that) that gas plants have a natural hedge against power price volatility, and as a consequence are more likely to thrive in free markets. What do you think? Do you control for that?