A key problem with solar energy is intermittency, requiring electricity system operators to reoptimise key decisions. In this seminar, Prof Gautam Gowrisankaran presents a method for quantifying the economic value of large-scale renewable energy.
Abstract
A key problem with solar energy is intermittency: solar generators only produce when the sun is shining. This adds to social costs and also requires electricity system operators to reoptimize key decisions with large-scale renewables. 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 CO2, we find social costs of$138.4/MWh for 20% solar generation, of which unforecastable intermittency accountsfor $6.1 and intermittency overall for $46. With solar installation costs of $1.52/W andCO2 social costs of $39/ton, 20% solar would be welfare neutral.
Biography
Prof. Gowrisankaran is Arizona Public Service Professor of Economics at the University of Arizona. His research focuses on industrial organization; health economics; energy and environmental economics; and applied econometrics. His recent research has examined the dynamics of pricing for durable goods industries; the equilibrium costs of intermittency for renewable energy; the impact of hospital mergers on bargaining leverage with managed care organizations; and other topics. Read more