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Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model

Year 2012, Volume: 2 Issue: 4, 250 - 262, 01.12.2012

Abstract

Subsidizing energy in Iran has imposed high costs on country's economy. Thus revising energy prices, on the basis of a subsidy reform plan, is a vital remedy to boost up the economy. While the direct consequence of cutting subsidies on electricity generation costs can be determined in a simple way, identifying indirect effects, which reflect higher costs for input factors such as labor, is a challenging problem. In this paper, variables such as compensation of employees and private consumption are endogenized by using extended Input-Output (I-O) price model to evaluate direct and indirect effects of electricity and fuel prices increase on economic subsectors. The determination of the short-run marginal generation cost of electricity using I-O technique with taken into account the Iranian targeted subsidy plan's influences is the main goal of this paper. Marginal cost of electricity, in various scenarios of price adjustment of energy, is estimated for three conventional categories of thermal power plants. Our results show that the raising the price of energy leads to an increase in the electricity production costs. Accordingly, the production costs will be higher than 1000 Rials per kWh until 2014 as predicted in the beginning of the reform plan by electricity suppliers.

Year 2012, Volume: 2 Issue: 4, 250 - 262, 01.12.2012

Abstract

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Details

Other ID JA27KA63EZ
Journal Section Research Article
Authors

Zohreh Salimian This is me

Marjan Kordbacheh This is me

Mehdi Sadeghi Shahdani This is me

Vahab Mokarizadeh This is me

Publication Date December 1, 2012
Published in Issue Year 2012 Volume: 2 Issue: 4

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APA Salimian, Z., Kordbacheh, M., Shahdani, M. S., Mokarizadeh, V. (2012). Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model. International Journal of Energy Economics and Policy, 2(4), 250-262.
AMA Salimian Z, Kordbacheh M, Shahdani MS, Mokarizadeh V. Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model. IJEEP. December 2012;2(4):250-262.
Chicago Salimian, Zohreh, Marjan Kordbacheh, Mehdi Sadeghi Shahdani, and Vahab Mokarizadeh. “Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model”. International Journal of Energy Economics and Policy 2, no. 4 (December 2012): 250-62.
EndNote Salimian Z, Kordbacheh M, Shahdani MS, Mokarizadeh V (December 1, 2012) Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model. International Journal of Energy Economics and Policy 2 4 250–262.
IEEE Z. Salimian, M. Kordbacheh, M. S. Shahdani, and V. Mokarizadeh, “Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model”, IJEEP, vol. 2, no. 4, pp. 250–262, 2012.
ISNAD Salimian, Zohreh et al. “Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model”. International Journal of Energy Economics and Policy 2/4 (December 2012), 250-262.
JAMA Salimian Z, Kordbacheh M, Shahdani MS, Mokarizadeh V. Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model. IJEEP. 2012;2:250–262.
MLA Salimian, Zohreh et al. “Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model”. International Journal of Energy Economics and Policy, vol. 2, no. 4, 2012, pp. 250-62.
Vancouver Salimian Z, Kordbacheh M, Shahdani MS, Mokarizadeh V. Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short- Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model. IJEEP. 2012;2(4):250-62.