Proposed Coal Power Plants and Coal-to-Liquids Plants in the US: Which Ones Survive and Why?

Energy Strategy Reviews, Forthcoming

32 Pages Posted: 1 Dec 2014 Last revised: 10 Sep 2015

See all articles by Dean Fantazzini

Dean Fantazzini

Moscow School of Economics, Moscow State University; National Research University Higher School of Economics

Date Written: November 30, 2014

Abstract

The increase of oil and natural gas prices since the year 2000 stimulated the planning and construction of new coal-fired electricity generating plants and coal-to-liquids (CTL) plants in the US. However, many of these projects have been canceled or abandoned since 2007. Using a set of 145 proposed coal power plants and 25 CTL plants, the determinants that influence the decision to abandon a project or to proceed with it are examined using binary data models and 20 regressors. In the case of coal power plants, the number of searches performed on Google relating to coal power plants, the project duration and the prices of alternative fuels for electricity generation are the main factors. As for CTL plants, the political affiliation of the state governor is the only significant variable across several model specifications. An out-of-sample exercise confirms these findings. These results also hold with robustness checks considering alternative Google search keywords, the potential effects of the recession between 2008 and 2009 and the inclusion of the two dimensions of the Dynamic-Weighted Nominate (DWN) database.

Keywords: Coal, Coal plants, Coal-to-Liquids, Logit, Probit, Training, Validation, Forecasting, Model Confidence Set, Google, Google Trends, Second Great Contraction, Global Financial Crisis

JEL Classification: C25, C52, C53, L94, Q40, Q41

Suggested Citation

Fantazzini, Dean, Proposed Coal Power Plants and Coal-to-Liquids Plants in the US: Which Ones Survive and Why? (November 30, 2014). Energy Strategy Reviews, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2532123

Dean Fantazzini (Contact Author)

Moscow School of Economics, Moscow State University ( email )

GSP-2, Leninskie Gory
Moscow, 119992
Russia
+7 495 5105256 (Phone)
+7 495 5105267 (Fax)

HOME PAGE: https://sites.google.com/site/deanfantazzini/

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

HOME PAGE: http://www.hse.ru/org/persons/11532644

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