Intermittency and the value of renewable energy

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47 Scopus citations

Abstract

A key problem with solar energy is intermittency: solar generators produce only when the sun is shining, adding to social costs and requiring electricity system operators to reoptimize key decisions.We develop a method to quantify the economic value of large-scale renewable energy. We estimate the model for southeastern Arizona. Not accounting for offset carbon dioxide, we find social costs of $138.40 per megawatt hour for 20 percent solar generation, of which unforecastable intermittency accounts for $6.10 and intermittency overall for $46.00. With solar installation costs of $1.52 per watt and carbon dioxide social costs of $39.00 per ton, 20 percent solar would be welfare neutral.

Original languageEnglish (US)
Pages (from-to)1187-1234
Number of pages48
JournalJournal of Political Economy
Volume124
Issue number4
DOIs
StatePublished - Aug 2016

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ASJC Scopus subject areas

  • Economics and Econometrics

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