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The economics of storage, transmission and drought: integrating variable wind power into spatially separated electricity grids

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  • Scorah, Hugh
  • Sopinka, Amy
  • van Kooten, G. Cornelis

Abstract

To mitigate the high variability of wind and make it a more viable renewable energy source, observers recommend greater integration of spatially-separated electrical grids, with high transmission lines linking load centers, scattered wind farms and hydro storage sites. In this study, we examine the economics of integrating large-scale wind energy into a grid characterized by fossil fuel thermal generation (Alberta) that is only weakly linked to one characterized by hydroelectric assets and the ability to store power behind hydro dams (British Columbia). We use a mathematical programming model to investigate the impact of increasing the capacity of the transmission link between the two disparate grids, which has not been done previously, and thereby shedding light on the issue of greater grid integration as a means of addressing intermittent renewable power. We find that, as wind capacity increases, costs of reducing CO2 emissions fall with increased transmission capacity between the grids, although this does not hold in all cases. Costs of reducing CO2 emissions are lowest during periods of drought. Over all scenarios, emission reduction costs vary between $20 and $60/t of CO2.

Suggested Citation

  • Scorah, Hugh & Sopinka, Amy & van Kooten, G. Cornelis, 2012. "The economics of storage, transmission and drought: integrating variable wind power into spatially separated electricity grids," Energy Economics, Elsevier, vol. 34(2), pages 536-541.
  • Handle: RePEc:eee:eneeco:v:34:y:2012:i:2:p:536-541
    DOI: 10.1016/j.eneco.2011.10.021
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Luis M. Abadie & José M. Chamorro, 2014. "Valuation of Wind Energy Projects: A Real Options Approach," Energies, MDPI, Open Access Journal, vol. 7(5), pages 1-38, May.
    3. Gallo, A.B. & Simões-Moreira, J.R. & Costa, H.K.M. & Santos, M.M. & Moutinho dos Santos, E., 2016. "Energy storage in the energy transition context: A technology review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 800-822.
    4. de Jong, Pieter & Kiperstok, Asher & Sánchez, Antonio Santos & Dargaville, Roger & Torres, Ednildo Andrade, 2016. "Integrating large scale wind power into the electricity grid in the Northeast of Brazil," Energy, Elsevier, vol. 100(C), pages 401-415.
    5. Doorman, Gerard L. & Frøystad, Dag Martin, 2013. "The economic impacts of a submarine HVDC interconnection between Norway and Great Britain," Energy Policy, Elsevier, vol. 60(C), pages 334-344.
    6. de Jong, Pieter & Kiperstok, Asher & Torres, Ednildo A., 2015. "Economic and environmental analysis of electricity generation technologies in Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 725-739.
    7. G. Cornelis van Kooten, 2012. "Natural Gas, Wind and Nuclear Options for Generating Electricity in a Carbon Constrained World," Working Papers 2012-01, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    8. repec:eee:rensus:v:79:y:2017:i:c:p:600-617 is not listed on IDEAS
    9. Sopinka, Amy & Cornelis van Kooten, G. & Wong, Linda, 2013. "Reconciling self-sufficiency and renewable energy targets in a hydro dominated system: The view from British Columbia," Energy Policy, Elsevier, vol. 61(C), pages 223-229.
    10. Kern, Jordan D. & Patino-Echeverri, Dalia & Characklis, Gregory W., 2014. "An integrated reservoir-power system model for evaluating the impacts of wind integration on hydropower resources," Renewable Energy, Elsevier, vol. 71(C), pages 553-562.
    11. English, J. & Niet, T. & Lyseng, B. & Palmer-Wilson, K. & Keller, V. & Moazzen, I. & Pitt, L. & Wild, P. & Rowe, A., 2017. "Impact of electrical intertie capacity on carbon policy effectiveness," Energy Policy, Elsevier, vol. 101(C), pages 571-581.
    12. repec:eee:appene:v:195:y:2017:i:c:p:538-555 is not listed on IDEAS
    13. Aidan Tuohy & Ben Kaun & Robert Entriken, 2014. "Storage and demand-side options for integrating wind power," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 3(1), pages 93-109, January.
    14. Melikoglu, Mehmet, 2017. "Pumped hydroelectric energy storage: Analysing global development and assessing potential applications in Turkey based on Vision 2023 hydroelectricity wind and solar energy targets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 146-153.
    15. G. Cornelis van Kooten, 2016. "Wind versus Nuclear Options for Generating Electricity in a Carbon Constrained World: Proceedings of the CSME International Congress 2016," Working Papers 2016-06, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    16. Mahmoud A. Eissa & Boping Tian, 2017. "Lobatto-Milstein Numerical Method in Application of Uncertainty Investment of Solar Power Projects," Energies, MDPI, Open Access Journal, vol. 10(1), pages 1-19, January.
    17. 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.
    18. Amy Sopinka & G. Cornelis van Kooten & Linda Wong, 2012. "Can British Columbia Achieve Electricity Self-Sufficiency and Meet its Renewable Portfolio Standard?," Working Papers 2012-07, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    19. Lund, Peter D. & Lindgren, Juuso & Mikkola, Jani & Salpakari, Jyri, 2015. "Review of energy system flexibility measures to enable high levels of variable renewable electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 785-807.
    20. Andreas Schröder & Maximilian Bracke, 2012. "Integrated Electricity Generation Expansion and Transmission Capacity Planning: An Application to the Central European Region," Discussion Papers of DIW Berlin 1250, DIW Berlin, German Institute for Economic Research.
    21. Mudasser, Muhammad & Yiridoe, Emmanuel K. & Corscadden, Kenneth, 2015. "Cost-benefit analysis of grid-connected wind–biogas hybrid energy production, by turbine capacity and site," Renewable Energy, Elsevier, vol. 80(C), pages 573-582.

    More about this item

    Keywords

    Wind power; Carbon costs; Electrical grids; Mathematical programming;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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