Intermittency and the Value of Renewable Energy

• Main Authors: Gowrisankaran, Gautam, Reynolds, Stanley, Samano, Mario
• Other Authors: Univ Arizona
• Language: en
• Published: UNIV CHICAGO PRESS 2016
• Online Access: http://hdl.handle.net/10150/621533; http://arizona.openrepository.com/arizona/handle/10150/621533

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.