Building Blocks: Investment in Renewable and Nonrenewable Technologies
AbstractThis paper examines how the increasing penetration of intermittent renewable generation can change the economic landscape for merchant power investment in conventional thermal generation. An equilibrium model of generation investment is developed, based on the long-standing principles of finding the optimal mix of capital intensive and higher marginal cost resources to serve a market with fluctuating demand. This model is then applied to data on electricity markets from several regions of the western United States to examine how the interaction of increasing wind capacity and electricity market design affects the equilibrium mix of thermal capacity and the revenues earned by renewable suppliers.
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Bibliographic InfoPaper provided by European University Institute in its series RSCAS Working Papers with number 2011/53.
Date of creation: 07 Oct 2011
Date of revision:
Wind generation ; Equilibrium Model ; optimal mix ; Market Design;
Other versions of this item:
- Bushnell, James, 2010. "Building Blocks: Investment in Renewable and Non-Renewable Technologies," Staff General Research Papers 31546, Iowa State University, Department of Economics.
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