Open AccessIntermittency and the Value of Renewable Energy
Author(s) -
Gautam Gowrisankaran,
Stanley S. Reynolds,
Mario Samano
Publication year - 2016
Publication title -
journal of political economy
Language(s) - English
Resource type - Journals
eISSN - 1537-534X
pISSN - 0022-3808
DOI - 10.1086/686733
Subject(s) - intermittency , renewable energy , offset (computer science) , solar energy , electricity , environmental economics , economics , environmental science , natural resource economics , meteorology , computer science , physics , engineering , electrical engineering , turbulence , programming language
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