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Economics of wind power when national grids are unreliable

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  • van Kooten, G. Cornelis
  • Wong, Linda

Abstract

Power interruptions are a typical characteristic of national grids in developing countries. Manufacturing, processing, refrigeration and other facilities that require a dependable supply of power, and might be considered a small grid within the larger national grid, employ diesel generators for backup. In this study, we develop a stochastic simulation model of a very small grid connected to an unreliable national grid to show that the introduction of wind-generated power can, despite its intermittency, reduce costs significantly. For a small grid with a peak load of 2.85Â MW and diesel generating capacity of 3.75Â MW provided by two diesel generators, the savings from using wind energy (based on wind data for Mekelle, Ethiopia) can amount to millions of dollars for a typical July month, or some 5.5-17.5% of total electricity costs. While wind power can lead to significant savings, the variability of wind prevents elimination of the smaller of two diesel units, although this peaking unit operates less frequently than in the absence of wind power.

Suggested Citation

  • van Kooten, G. Cornelis & Wong, Linda, 2010. "Economics of wind power when national grids are unreliable," Energy Policy, Elsevier, vol. 38(4), pages 1991-1998, April.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:4:p:1991-1998
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    References listed on IDEAS

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    1. van Kooten, G. Cornelis & Timilsina, Govinda R., 2009. "Wind power development : economics and policies," Policy Research Working Paper Series 4868, The World Bank.
    2. Lund, Henrik, 2005. "Large-scale integration of wind power into different energy systems," Energy, Elsevier, vol. 30(13), pages 2402-2412.
    3. Pitt, Lawrence & van Kooten, G. Cornelis & Love, Murray & Djilali, Ned, 2005. "Utility-scale Wind Power: Impacts of Increased Penetration," Working Papers 37009, University of Victoria, Resource Economics and Policy.
    4. DeCarolis, Joseph F. & Keith, David W., 2006. "The economics of large-scale wind power in a carbon constrained world," Energy Policy, Elsevier, vol. 34(4), pages 395-410, March.
    5. Maddaloni, Jesse D. & Rowe, Andrew M. & van Kooten, G. Cornelis, 2008. "Network constrained wind integration on Vancouver Island," Energy Policy, Elsevier, vol. 36(2), pages 591-602, February.
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    2. Gebreegziabher, Zenebe & van Kooten, G. Cornelis, 2013. "Does community and household tree planting imply increased use of wood for fuel? Evidence from Ethiopia," Forest Policy and Economics, Elsevier, vol. 34(C), pages 30-40.
    3. Timilsina, Govinda R. & Cornelis van Kooten, G. & Narbel, Patrick A., 2013. "Global wind power development: Economics and policies," Energy Policy, Elsevier, vol. 61(C), pages 642-652.
    4. Alfaro, Jose & Miller, Shelie, 2014. "Satisfying the rural residential demand in Liberia with decentralized renewable energy schemes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 903-911.
    5. G. Cornelis van Kooten, 2015. "All you want to know about the Economics of Wind Power," Working Papers 2015-07, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    6. Kazimierczuk, Agnieszka H., 2019. "Wind energy in Kenya: A status and policy framework review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 107(C), pages 434-445.
    7. Trotter, Philipp A. & McManus, Marcelle C. & Maconachie, Roy, 2017. "Electricity planning and implementation in sub-Saharan Africa: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1189-1209.

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