Chasing Grid Parity: Understanding the Dynamic Value of Renewable Energy

Electricity Journal

Volumn 25, Issue 3, 2012, Pages 17-27

  Olson, Arne ^a   Jones, Ryan ^b  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

^b STANFORD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

RENEWABLE ENERGY RESOURCES;

COST COMPETITIVE; DECLINING COSTS; GRID PARITIES; MOVING TARGETS; RENEWABLE ENERGIES; RENEWABLES;

COSTS;

EID: 84860533286     PISSN: 10406190     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.tej.2012.03.001     Document Type: Article

References (24)

1. Multi Year Program Plan, U.S. Dept. of Energy, April 15, 2008, at 21, at http://www1.eere.energy.gov/solar/pdfs/solar_program_mypp_2008-2012.pdf.
2. Solar's Push to Reach the Mainstream, DELOITTE REVIEW, at http://www.deloitte.com/view/en_US/us/Insights/Browse-by-Content-Type/deloitte-review/article/cd308136aaea2210VgnVCM200000bb42f00aRCRD. htm.
3. The True Cost of Solar Power: The Race to $1/Watt, Photon Consulting, 2010.
4. Global Solar Energy Outlook: Solar DemandDynamics,Cost Structures, Policy Factors, and Competitive Differentiators for Suppliers: Market Analysis and Forecasts, Pike Research, 2010.
5. The levelized cost analysis assumes 7.5 percent unlevered IRR, 10 percent ITC, 2.5 percent electric power price escalator, FSLR panels, install labor and site-specific cost estimates. Includes owners financing, development, and O&M costs.
6. First Solar Corporate Overview, Presentation, Mar. 1, 2010.
7. California Could Hit Solar Grid Parity by 2015, PV INSIDER, Jan. 31, 2012, at http://news.pv-insider.com/photovoltaics/california-could-hitsolar-grid-parity-2015.
8. Database of State Incentives for Renewables and Efficiency, at http://www.dsireusa.org.
9. Within the bands allowed by NERC's Control Performance Standards.
10. California Public Utilities Commission, Planning Standards for System Resource Plans-Part II, Long-Term Renewable Resource Planning Standards, at 21-22, at http://docs.puc.ca.gov/efile/RULINGS/119573.pdf.
11. C.K. Woo, I. Horowitz, J. Moore and A. Pacheco, The Impact of Wind Generation on the Electricity Spot-Market Price Level and Variance: The Texas Experience, ENERGY POLICY, 39:7 (2011), at 3939-3944.
12. Balancing Energy Services Market Clearing Prices for Energy Annual Report, ERCOT, 2008.
13. Northwest Overgeneration: An Assessment of Potential Magnitude and Cost, BPA, 2011, at http://www.bpa.gov/corporate/AgencyTopics/ColumbiaRiverHighWaterMgmnt/BPA_Overgeneration_Analysis.pdf.
14. Framework forAssessing the Cost-Effectiveness of the Self-Generation Incentive Program, Itron, 2005, at ftp://ftp.cpuc.ca.gov/puc/energy/electric/sgip+ce+framework+report_final.pdf.
15. ELCC relies on a resource adequacy model to determine hourly loss-of-load probability (LOLP) and then determines by how much load can be increased over every hour of the year after the introduction of a renewable generator, without changing system reliability.
16. A. Keane, M. Milligan, et al., Capacity Value of Wind Power, IEEE TRANSACTIONS ON POWER SYSTEMS, 26(2) (2011): 564-572.
17. 33% RPS Calculator with Output Module, Energy + Environmental Economics (E3), 2010, at http://ethree.com/public_projects/cpuc6.php.
18. Cost-Causation and Integration Cost Analysis for Variable Generation, NREL, 2011, at http://www.nrel.gov/docs/fy11osti/51860.pdf.
19. ''Calculating Wind Integration Costs: Separating Wind Energy Value from Integration Cost Impacts.'' NREL. 2009. http://www.nrel.gov/docs/fy09osti/46275.pdf.
20. Integration of Renewable Resources: Operational Requirements and Generation Fleet Capability at 20% RPS, CAISO, 2010, at http://www.uwig.org/CAISO-20PercentRPS.pdf.
21. Load Following is not currently an ancillary service under the CAISO tariff; however, CAISO estimates that it will need to commit additional resources each day with minimum ramp requirements to follow the net load. Hence, we include it as an ancillary service in this section.
22. We assume that ancillary service requirements increase proportional to load in the absence of renewables.
23. We assume that ancillary service prices increase in proportion to natural gas prices.
24. This scenario was derived by sorting renewable resources in ascending order based on environmental impact score, and selecting resources so as tominimize the environmental impact of the portfolio. Environmental impacts considered include significant species, important bird areas, proximity to protected areas such as national parks or national monuments, the presence of degraded land, and others. Solar PV on rooftops or degraded land is the preferred resource under this case, followed by geothermal, then wind, then solar on pristine land.