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Economics of wind power when national grids are unreliable

  • van Kooten, G. Cornelis
  • Wong, Linda

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.

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Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 38 (2010)
Issue (Month): 4 (April)
Pages: 1991-1998

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Handle: RePEc:eee:enepol:v:38:y:2010:i:4:p:1991-1998
Contact details of provider: Web page: http://www.elsevier.com/locate/enpol

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  1. 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.
  2. 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.
  3. Lund, Henrik, 2005. "Large-scale integration of wind power into different energy systems," Energy, Elsevier, vol. 30(13), pages 2402-2412.
  4. van Kooten, G. Cornelis & Timilsina, Govinda R., 2009. "Wind power development : economics and policies," Policy Research Working Paper Series 4868, The World Bank.
  5. Lawrence Pitt & G. Cornelis van Kooten & Murray Love & Ned Djilali, 2005. "Utility-scale Wind Power: Impacts of Increased Penetration," Working Papers 2005-01, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
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