Economics

To complete this assignment, you will need the excel file ESGPortfolios.xls which describes the variable operating costs, fuel efficiencies, and CO2 emissions rates of the set of power plants.The generation capacities of the portfolios ranges from around2000 MW to almost 4000 MW. Each portfolio contains differing generation technologies with varying operating costs.In each hourly market, the supply bids of each generator will be used to construct an aggregate supply curve and intersected with a demand curve.(i) Suppose all firms bid competitively into the spot market in an hour when demand is 18,200 MWh. What is the market clearing wholesale price?(ii) Compute the carbon emissions associated with electricity production in this hour.(iii) Compute the short run profits (i.e. revenues less variable operating costs) earned by ‘Big Coal’ and ‘Fossil Light’ in this hour.(iv) Now suppose that this market was subject to a carbon tax of $10 per ton of CO2. How would the introduction of this tax a↵ect the market clearing price, firm profits (at Big Coal and Fossil Light), and total emissions? Please be specific (i.e. compute the new price, profits, and associatedemissions) as part of your answer.Capacity Heat Rate Fuel Price Fuel Cost Var O&M Total Var Cost Carbon FixedUNIT NAME MW (MMBTU/ $/MMBTU $/MWh $/MWH $/MWH tons/MWH O&M/Day ($)MWh)Big CoalFOUR CORNERS 1900 11.67 3.00 35.00 1.50 36.50 1.10 $8,000ALAMITOS 7 250 16.05 4.50 72.22 1.50 73.72 0.85 $0HUNTINGTON BEACH 1&2 300 8.67 4.50 39.00 1.50 40.50 0.46 $2,000HUNTINGTON BEACH 5 150 14.44 4.50 65.00 1.50 66.50 0.77 $2,000REDONDO 5&6 350 8.99 4.50 40.44 1.50 41.94 0.48 $3,000REDONDO 7&8 950 8.99 4.50 40.44 1.50 41.94 0.48 $5,000Totals 3900 $20,000Big GasEL SEGUNDO 1&2 400 9.63 4.50 43.33 1.50 44.83 0.51 $1,000EL SEGUNDO 3&4 650 8.83 4.50 39.72 1.50 41.22 0.47 $1,000LONG BEACH 550 11.56 4.50 52.00 0.50 52.50 0.61 $2,000NORTH ISLAND 150 14.44 4.50 65.00 0.50 65.50 0.77 $0ENCINA 950 9.15 4.50 41.17 0.50 41.67 0.49 $2,000KEARNY 200 19.90 4.50 89.56 0.50 90.06 1.06 $0SOUTH BAY 700 9.63 4.50 43.33 0.50 43.83 0.51 $2,000Totals 3600 $8,000Bay ViewsMORRO BAY 1&2 335 8.51 4.50 38.28 0.50 38.78 0.45 $2,000MORRO BAY 3&4 665 8.02 4.50 36.11 0.50 36.61 0.43 $4,000MOSS LANDING 6 750 6.90 4.50 31.06 1.50 32.56 0.37 $8,000MOSS LANDING 7 750 6.90 4.50 31.06 1.50 32.56 0.37 $8,000OAKLAND 150 13.48 4.50 60.67 0.50 61.17 0.72 $0Totals 2650 $22,000BeachfrontCOOLWATER 650 9.31 4.50 41.89 0.50 42.39 0.49 $2,000ETIWANDA 1-4 850 9.15 4.50 41.17 1.50 42.67 0.49 $8,000ETIWANDA 5 150 13.64 4.50 61.39 1.50 62.89 0.72 $1,000ELLWOOD 300 16.69 4.50 75.11 0.50 75.61 0.89 $0MANDALAY 1&2 300 8.35 4.50 37.56 1.50 39.06 0.44 $1,000MANDALAY 3 150 11.23 4.50 50.56 1.50 52.06 0.60 $1,000ORMOND BEACH 1 700 8.35 4.50 37.56 0.50 38.06 0.44 $7,000ORMOND BEACH 2 700 8.35 4.50 37.56 0.50 38.06 0.44 $7,000Totals 3800 $27,000East BayPITTSBURGH 1-4 650 8.99 4.50 40.44 0.50 40.94 0.48 $2,500PITTSBURGH 5&6 650 8.02 4.50 36.11 0.50 36.61 0.43 $2,500PITTSBURGH 7 700 13.16 4.50 59.22 0.50 59.72 0.70 $4,000CONTRA COSTA 4&5 150 12.84 4.50 57.78 0.50 58.28 0.68 $1,000CONTRA COSTA 6&7 700 8.67 4.50 39.00 0.50 39.50 0.46 $6,000POTRERO HILL 150 15.41 4.50 69.33 0.50 69.83 0.82 $0Totals 3000 $16,000Old TimersBIG CREEK 1000 N/A 0.00 0.00 0.00 0.00 0.00 $15,000MOHAVE 1 750 10.00 3.00 30.00 4.50 34.50 0.94 $15,000MOHAVE 2 750 10.00 3.00 30.00 4.50 34.50 0.94 $15,000HIGHGROVE 150 10.91 4.50 49.11 0.50 49.61 0.58 $0SAN BERNADINO 100 11.88 4.50 53.44 0.50 53.94 0.63 $0Totals 2750 $45,000Fossil LightHUMBOLDT 150 10.43 4.50 46.94 0.50 47.44 0.55 $0HELMS 800 N/A 0.00 0.00 0.50 0.50 0.00 $15,000HUNTERS POINT 1&2 150 10.59 4.50 47.67 1.50 49.17 0.56 $1,000HUNTERS POINT 4 250 16.53 4.50 74.39 1.50 75.89 0.88 $1,000DIABLO CANYON 1 1000 1.00 7.50 7.50 4.00 11.50 0.00 $20,000Totals 2350 $37,000