RT Journal Article
T1 Electric utility mergers in the presence of distributed renewable energy.
A1 Fikru, Mahelet G.
A1 Gautier, Luis
K1 Impuestos ambientales
K1 Recursos energéticos renovables
K1 Oligopolios
AB Firm consolidation through mergers and acquisitions could be a strategic option for theelectricity industry which has recently witnessed several transformations such as renewableintegration and regulatory changes. This study uses a Cournot oligopoly model to examinethe profitability of electric utility mergers in the presence of distributed renewable energysources. We introduce two sector specific parameters that influence merger profitability: therate at which renewable energy raises the marginal grid integration cost and the extent towhich renewable energy reduces pollution intensity. Our model predicts that an increase inthe first parameter reduces the profitability of profitable mergers while an increase in thelatter increases the profitability of profitable mergers. We find that due to the strategicsubstitutability between renewable and non-renewable energy, an increase in energy producedfrom distributed sources reduces the profitability of profitable mergers and reduceslosses from unprofitable mergers. Furthermore, we show that the variability in electricityproduced from renewable sources induces utilities to produce more exacerbating the extentthat extra renewable energy affects merger profitability. Results from the theoretical modelare illustrated by simulating a hypothetical merger among investor-owned utilities in thePJM market.
PB Elsevier
YR 2021
FD 2021
LK https://hdl.handle.net/10630/31838
UL https://hdl.handle.net/10630/31838
LA eng
NO Mahelet G. Fikru, Luis Gautier, Electric utility mergers in the presence of distributed renewable energy, Energy Economics, Volume 101, 2021, 105436, ISSN 0140-9883, https://doi.org/10.1016/j.eneco.2021.105436
NO Política de acceso abierto tomada de: https://v2.sherpa.ac.uk/id/publication/15558
DS RIUMA. Repositorio Institucional de la Universidad de Málaga
RD 20 ene 2026