{"word_count": 217, "character_count": 1530}
Intermittency and the Value of Renewable Energy / Gautam Gowrisankaran, Stanley S. Reynolds, Mario SamanoNBER working paper, n ° 17086, May 2011http://papers.nber.org/papers/w17086This  paper develops an empirical approach to estimate the equilibrium value  of renewable electricity technologies, and applies it to evaluate solar  energy mandates in southeastern Arizona. Solar generation and other  renewables suffer from intermittency because weather varies and is only  partially forecastable. Intermittency imposes costs as a planner must  maintain backup capacity and allocate operating reserves in order to  avoid system failure. We model an electricity system where a system  operator optimizes the amount of generation capacity, operating  reserves, and demand curtailment in the presence of variable and  partially forecastable demand and renewable production. We use generator  characteristics, solar output, demand and weather forecast data to  estimate parameters. Equilibrium costs of a 20 percent mandate are  $133.7 per MWh of solar generation; unforecastable intermittency  accounts for only $4.1 of this. If solar generation were fully  dispatchable, costs would drop by $24.3 per MWh. If CO2 reductions are  valued at $25/ton then this mandate would be welfare neutral if solar  capacity costs dropped from the current $5/W to $1.78/W. Our methods can  be applied to examine the value of other technologies, such as wind  power and storage, and electricity market changes, such as real-time  pricing. (© authors)