Carbon Tax and Renewable Energy Diffusion in the Deregulated Texas Electricity Market: An Agent-Based Analysis

Joshua D. Halperin, I-Tsung Tsai

Department of Engineering Systems and Management, Masdar Institute of Science and Technology, Abu Dhabi, United Arab Emirates.

DOI: 10.4236/jpee.2015.34052                

Abstract

In the United States, emission regulations are enacted at a state level; individual states are allowed to define what methods they will use to mitigate their carbon emissions. The consequence of this is especially interesting in the state of Texas where new legislation has created a “deregulated” electricity market in which end-users are capable of choosing their electricity provider and subsequently the type of electricity they wish to consume (generated by fossil fuels or renewable sources). In this paper we analyze the effects of carbon tax on the development of renewable generation capacity at the utility level while taking into account expected adoption of rooftop PV systems by individual consumers using agent based modeling techniques. Monte Carlo simulations show carbon abatement trends and proffer updated renewable portfolio standards at various levels of likelihood.

Keywords

Deregulated Electricity Market, Rebewable Adoption, Agent-Based Modeling, Monte Carlo Simulation

Conflicts of Interest

The authors declare no conflicts of interest.

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