Time of day pricing and the levelized cost of intermittent power generation

Reichelstein, Stefan ; Sahoo, Anshuman

URL: https://corporate-sustainability.org/wp-content/up...
Additional URL: https://www.gsb.stanford.edu/faculty-research/work...
Document Type: Working paper
Year of publication: 2013
The title of a journal, publication series: Working papers
Volume: 3067
Place of publication: Stanford, CA
Publishing house: Stanford Graduate School of Business
Publication language: English
Institution: Business School > Stiftungsprofessur für ABWL (Reichelstein 2018-)
Subject: 330 Economics
Abstract: An important characteristic of renewable energy sources, in particular solar and wind power, is the inherent variability in their pattern of electricity generation. These variations comprise both intra-day and seasonal fluctuations. Yet, the intermittency of renewable energy is usu- ally ignored in life-cycle cost calculations that seek to asses the competitiveness of renewable energy in comparison to electric power derived from fossil fuels. We demonstrate that a traditional life-cycle cost calculation must be appended by a correction factor which we term the Co-Variation coefficient. It captures any synergies, or complementarities, between the temporal pattern of how power is generated and how it is priced. We estimate the magnitude of the Co-Variation coefficient for several specific settings in the Western U.S. Our estimates indicate that solar photovoltaic (PV) power is between 10-15% less expensive than average life-cycle cost analyses have suggested. In contrast, the intermittency pattern of wind power exhibits complementarities with electricity pricing schedules, resulting in a cost assessment that is about 5-10% above that suggested by traditional calculations.
Additional information: Anderer Titel: Time of use pricing and the levelized cost of intermittent power generation

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.

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Reichelstein, Stefan ; Sahoo, Anshuman (2013) Time of day pricing and the levelized cost of intermittent power generation. Working papers Stanford, CA 3067 [Working paper]

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