Despite increasing fuel cost volatility, regulatory uncertainty, and imminent shifts to industry dynamics, utility managers are forced to make tough decisions in regards to installing long-life generation assets. This study seeks to identify and quantify determinants of fuel choice in new electric power plants given vast uncertainties in the electricity generation sector. Using a probit functional form to estimate marginal effects on the likelihood of choosing wind versus natural gas powered generation, I find positive effects of natural gas prices in the period three years prior to initial operation of the new facility, positive effects of static-level standard score of mix, and positive effects of wind-power density. Additional feedstock choice sets and parameters are considered. All models suggest that (a) feedstock costs are significant predictors of fuel choice, (b) state-level regulatory learning enhances likelihood of choosing relatively young technologies, (c) Renewable Portfolio Standards result in artificial substitution between wind and solar technologies, and (d) population density, more so than political influence, predicts choices to install wind-powered capacity. Public policy and managerial implications are discussed.

Air pollution—both indoor and outdoor—results in more deaths and diseases in India than in any other country in the world. The first chapter in this dissertation explores why despite profoundly negative health consequences of indoor air pollution, most rural Indian households cook using traditional biomass fuel. Among many factors that contribute to households’ continued use of solid fuels, we focus on one: women’s intra-household status. We exploit Indian son preference: having a girl first child lowers women’s status relative to having a boy first child, and is therefore associated with lower likelihood of using clean fuel. This effect is found throughout the wealth distribution, and is not concentrated among households in states with a high child sex ratio or households where women have some education. The second chapter focuses on outdoor air pollution in India. We use a general equilibrium model of Indian economy to quantify the spillovers from a carbon tax on fossil fuels to local air quality and the health outcomes in urban India. We estimate that a $10/ton of Carbon tax on all fossil fuels will reduce CO2 emission by 10.7% from business-as-usual and save nearly 0.3 million urban lives from pollution related deaths while adding 0.2 percent to the GDP over the three decades from 2003 to 2030. We get this double dividend from carbon tax if the tax revenue is used to reduce existing distortionary taxes. Carbon tax is more progressive if the revenue is repatriated to households, but the GDP is slightly smaller than the base case under this regime. In the third chapter, we present the first VSL estimates from India using hedonic wage method with worker and job characteristics data from Employment and Unemployment Survey of India (EUS)—a large nationally representative survey that has not been used in this literature before. We estimate VSL of an average low-skilled urban Indian worker to be about $85,000 in 2004-05 (about 65 times the annual wage) at 2010 constant prices. Our estimates of VSL and VSL-to-income ratio are much lower than all previous estimates from India. Comparisons with estimates from other developing countries like China and Taiwan, however, suggest that our estimates are more reasonable. Our VSL estimate, if reliable, sets a lower threshold for investment in environment and public safety projects that can be justified using cost-benefit criteria.

The importance of access to modern energy has been well understood by governments and donor agencies in many developing countries, and significant effort has been made in recent years to address energy access challenges. However, despite these efforts, the International Energy Agency (IEA) has predicted that the energy access problem will remain unresolved by 2030. Therefore, adequate and appropriate action is needed to resolve this problem more quickly. This dissertation analyses policies and their impacts and will help researchers and policy makers in developing countries to (i) understand the impact of policies in the formation of a renewable energy (RE) market, (ii) consider the determinants of technological choices when promoting access to energy services and, (iii) better appreciate the sustainability performance of rural energy. For the purpose of analysis, several country cases from Asia and Sub-Saharan Africa region were carried out as these are the two main regions where the energy access problem are most acute. To understand the impact of policies in the formation of RE based rural electrification market, a case study was conducted in Nepal. The study has shown that rural electrification has been expanding as a consequence of market-oriented policies. When it comes to selection of electrification path-ways, different technological alternatives are analysed in Afghanistan and Nepal, taking levelized cost of electricity (LCOE) as the means to select cost effective options. The analysis has presented best-fit conditions for these various technological pathways in the two countries and verified whether they are following the appropriate and cost effective course in their efforts to expand rural electrification. For understanding the determinants of cooking fuel choices and to analyse policy implications in the transition of large populations from traditional to modern fuels, fuel choices are modelled in the case of China. Choices are modelled (using MESSAGE–ACCESS mod-el) with standard economic variables such as income, technology costs and fuel prices, along with some unique variable such as inconvenience costs. Future access scenarios are designed considering different policy options to accelerate the transition. Sustainability is one of the key concerns in terms of energy access. This dissertation introduces methods for evaluating (i) the sustainability performance of energy technologies and (ii) the status and progress of developing countries in providing sustainable energy access. Different sets of sustainability indicators are considered for the rural energy sector and aggregated to form a single composite index. The energy technology sustainability index (ETSI) is used for assessing the performance of different energy technological systems in the case of India. The analysis reveals that mature technologies such as biomass gasifiers, biogas and micro hydro have relatively better sustainability performance among the options considered, while solar and wind, though showing fairly good improvement in sustainability performance, still have difficulties competing with more mature and conventional technologies without policy support. The Energy Sustainability Index (ESI) has been applied to China, India, South Africa, Sri-Lanka, Bangladesh and Ghana between 1990 and 2010 to evaluate the status and progress made by these countries in rural energy sustainability. The analysis suggests that South Africa’s rural energy sustainability index is highest followed by China, Sri Lanka, India, Bangladesh and Ghana respectively. The rural energy sustainability has improved relatively over time in all countries except Ghana. The dissertation shows that policies are helping the rapid expansion of the RE market though with uneven penetration in rural Nepal. Access to credit and cumbersome subsidy delivery mechanism are perceived as the major factors affecting the expansion of rural electrification, requiring innovation. The electrification pathways taken by Nepal seem functional and moving in the right direction but some flaws in the delivery mechanisms require attention. Meanwhile in Afghanistan, pathways are not well defined and the country lacks a clear-cut national policy framework for the expansion of rural electrification. The analysis on fuel transition shows that even a fast developing country such as China will continue to have serious problems guaranteeing the access to solid fuels for cooking for one third of its rural population by 2030. The problem could be more severe in poorer nations. There-fore, further policy intervention addressing the high implicit discount rate of the poorer section of the population, reducing the upfront cost of more efficient technology (stoves) or the costs of cleaner fuels with subsidies must be considered to promote energy transition. Overall, this dissertation has analysed key issues in the global discussion about sustainable energy access. The methods for sustainability assessment suggested have been specially designed for rural settings in developing countries and are instrumental to assess the performance of rural energy technologies and track the progress of sustainable energy access efforts among rural households. / <p>QC 20140210</p>