Marginal Cost Pricing and Social Investment Criteria for Electricity Undertakings
Marginal cost pricing—which for many years appeared to be something of a theoretician’s toy, with little application to reality—has been the subject of revived interest in recent years, largely as the result of the efforts by Electricité de France to put the precept into practice. In this paper, we will review the basic principles governing the marginal cost pricing of electricity, and shall attempt to elaborate upon them at a few critical points.
KeywordsElectricity Price Project Evaluation Load Curve Marginal Cost Price Economic Rent
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