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Location matters: The impact of renewable power on transmission congestion and emissions

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  • Hitaj, Claudia

Abstract

Many governments offer subsidies for renewable power to reduce greenhouse gas emissions in the power sector. However, most support schemes for renewable power do not take into account that emissions depend on the location of renewable and conventional power plants within an electricity grid. I simulate optimal power flow in a test grid when 4 renewable power plants connect to the grid across 24 potential sites, amounting to over 10,000 configurations. Each configuration is associated with different levels of emissions and renewable power output. I find that emission reductions vary by a factor of 7 and that curtailment due to transmission congestion is more likely when renewable power plants are concentrated in an area of the grid with low demand. Large cost savings could be obtained by allowing subsidies for renewable power to vary across locations according to abatement potential or by replacing subsidies with a price on emissions.

Suggested Citation

  • Hitaj, Claudia, 2015. "Location matters: The impact of renewable power on transmission congestion and emissions," Energy Policy, Elsevier, vol. 86(C), pages 1-16.
    • Handle: RePEc:eee:enepol:v:86:y:2015:i:c:p:1-16
    DOI: 10.1016/j.enpol.2015.06.019
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    References listed on IDEAS

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    3. Erik P. Johnson & Juan Moreno-Cruz, 2020. "Congestion in the Electricity Transmission System Redistributes Pollution across Long Distances," CESifo Working Paper Series 8483, CESifo.
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    7. Bjørnebye, Henrik & Hagem, Cathrine & Lind, Arne, 2018. "Optimal location of renewable power," Energy, Elsevier, vol. 147(C), pages 1203-1215.
    8. Meus, Jelle & Van den Bergh, Kenneth & Delarue, Erik & Proost, Stef, 2019. "On international renewable cooperation mechanisms: The impact of national RES-E support schemes," Energy Economics, Elsevier, vol. 81(C), pages 859-873.
    9. Navon, Aviad & Kulbekov, Pavel & Dolev, Shahar & Yehuda, Gil & Levron, Yoash, 2020. "Integration of distributed renewable energy sources in Israel: Transmission congestion challenges and policy recommendations," Energy Policy, Elsevier, vol. 140(C).
    10. Lin, Yashen & Johnson, Jeremiah X. & Mathieu, Johanna L., 2016. "Emissions impacts of using energy storage for power system reserves," Applied Energy, Elsevier, vol. 168(C), pages 444-456.
    11. Karhinen, Santtu & Huuki, Hannu, 2020. "How are the long distances between renewable energy sources and load centres reflected in locational marginal prices?," Energy, Elsevier, vol. 210(C).
    12. Harrison Fell & Daniel T. Kaffine & Kevin Novan, 2021. "Emissions, Transmission, and the Environmental Value of Renewable Energy," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 241-272, May.
    13. Chu, Yin & Gao, Juanxia & Li, Haoyang, 2023. "Wind power expansion and regional allocative efficiency among fossil-fuel electricity generators," International Journal of Industrial Organization, Elsevier, vol. 91(C).
    14. Hitaj, Claudia & Löschel, Andreas, 2019. "The impact of a feed-in tariff on wind power development in Germany," Resource and Energy Economics, Elsevier, vol. 57(C), pages 18-35.
    15. Oliveira, Tiago & Varum, Celeste & Botelho, Anabela, 2019. "Econometric modeling of CO2 emissions abatement: Comparing alternative approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 310-322.
    16. Costa-Campi, Maria Teresa & Davi-Arderius, Daniel & Trujillo-Baute, Elisa, 2021. "Analysing electricity flows and congestions: Looking at locational patterns," Energy Policy, Elsevier, vol. 156(C).
    17. Bucksteeg, Michael, 2019. "Modelling the impact of geographical diversification of wind turbines on the required firm capacity in Germany," Applied Energy, Elsevier, vol. 235(C), pages 1476-1491.
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    20. Costa-Campi, Maria Teresa & Davi-Arderius, Daniel & Trujillo-Baute, Elisa, 2020. "Locational impact and network costs of energy transition: Introducing geographical price signals for new renewable capacity," Energy Policy, Elsevier, vol. 142(C).

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