ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The government introduces a subsidy scheme where renewable generators receive a subsidy payment for each MWh unit of their generation output (subsidy is in the form of $/MWh). This policy may have consequences for the prices, the producer surplus, and the energy-mix at the wholesale market in Australia. Everything else being equal, which outcomes are possible for a given trading (dispatch) period as a result of the introduction of the renewable energy subsidy?

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It may not change the electricity wholesale price being set at the NEM in a given trading interval.
It may increase the proportion of renewable energy being generated in a given trading interval.
It may decrease the proportion of renewable energy being generated in a given trading interval.
It may not change the proportion of renewable energy being generated in a given trading interval.
It may increase the producers’ surplus for coal generators in a given trading interval.
It will increase the producers’ surplus for all renewable generators in all trading intervals.
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