An alternative would be have the pigouvian tax on power stations, but at a rate where it is cheaper to buy from the line than hook up an ICE to a generator. Tax

An alternative would be have the pigouvian tax on power stations, but at a rate where it is cheaper to buy from the line than hook up an ICE to a generator. Tax regimes should always take market effects and enforcement into account. Thermal efficiency of a good ICE: 38% Thermal efficiency of a good natural gas plant: 54% Average power line losses: 8-15% http://www.greencarreports.com/news/1091436_toyota-gasoline-engine-achieves-thermal-efficiency-of-38-percent http://www.greencarreports.com/news/1091436_toyota-gasoline-... https://en.wikipedia.org/wiki/Combined_cycle https://en.wikipedia.org/wiki/Combined_cycle http://blog.schneider-electric.com/energy-management-energy-efficiency/2013/03/25/how-big-are-power-line-losses/ http://blog.schneider-electric.com/energy-management-energy-...