A Simple Method for Evaluating the Marginal Cost of Unsupplied Electricity
Volume: Volume 13, No. 1
Issue: Spring 1982
Pages: pp. 249-253
Authors: Benjamin Bental and S. Abraham Ravid
Title: A Simple Method for Evaluating the Marginal Cost of Unsupplied Electricity
Abstract: A method for calculating the marginal cost of industrial power cuts is developed. Firms are assumed to hedge against outages by acquiring back-up generators. The marginal cost of back-up power enables us to infer the marginal cost of a power cut.
JEL Classification
Industry Studies Electrical, Gas, Communication, and Information Services (6352)