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We present a methodology to estimate fixed cost parameters relevant to the decision to operate, mothballor retire an open-cycle gas turbine (OCGT) using a dynamic discrete choice model, based on fuel andelectricity prices, as well as technical data and the operational status of OCGTs in the PJM market area.With operational and mothballed OCGTs, we find for both, age of the power plant and plant vintagestatistically significant positive correlations with the fixed operation and maintenance (O&M) costs. Wealso show a statistically significant negative relationship between the installed capacity and the fixed O&Mcosts, confirming that an increase in scale results in lower specific costs. The estimated fixed O&M costparameters for an operational OCGT vary from 15.3 USD/kW/yr for new, large, high-efficiency units, to 50.8USD/kW/yr for older, small, low-efficiency units. Mothballing a plant reduces these costs by 75% to 95%,depending on plant vintage and size. Decommissioning an OCGT was found to be cash flow negative, whichmeans that the associated cost exceeds any scrap value the equipment may have on secondary markets. Ourestimated cost parameters depend on operational status, capacity, vintage, and age of a generation unit. Thisdifferentiation is valuable for a better understanding of costs in the context of competition policy. It wouldalso allow for a more realistic parameterisation of power market models. Using the estimates and marketdata, we also compute the probabilities of operating, mothballing or retiring an OCGT. Sensitivity analysesregarding changes in prices of capacity, electricity, and natural gas reveal that the operating decisions forOCGTs are significantly affected by the profitability potential, most notably by electricity prices.

In face of increased efforts to mitigate climate change, biofuels may be included in reduction plans forgreenhouse gas emissions. Feedstock for first generation biofuels and food crops both use arable land andmay compete for it. Also, fuel is an input for the production and transport of food. The purpose of thispaper is to quantify with empirical data how these two aspects affect market outcomes and to introduce acounterfactual setting where the latter aspect dominates the former. The setting allows an expansion ofbiofuel production to increase food production by lowering costs of production and transport. Namely,lower costs increase market access, allowing a higher utilization of idle production capacities for foodcrops. For this quantification, I develop an open market, welfare maximizing, partial equilibrium modelfor three interdependent goods fuel, fuel feedstock, and food (these goods are represented by diesel/biodiesel,palm oil, and cassava/maize respectively). The model is calibrated to Zambia, which exhibits the necessaryunderlying conditions of underutilized agricultural capacity, high transport costs, and low exports offood. Compared to a baseline, model results show the counterfactual switch from fossil diesel to biodieselto reduce the diesel price by51%. This increases food supply (cassava and maize combined) by0.4%and decreases related prices by3%. Overall welfare increases by9.9%. If additionally, a higher worldmarket price of maize renders exports just profitable, overall welfare continues to gain9.9%, domesticfood supply rises by0.3%, and related prices drop by2%, but food supply including exports grows by32%. Furthermore, the introduction of a palm oil based biodiesel sector eliminates import dependency onfossil diesel and palm oil.