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Valuing variable renewable energy for peak demand requirements


  • Zhou, Ella
  • Cole, Wesley
  • Frew, Bethany


The capacity credit for a generator is the fraction of its nameplate capacity that can contribute to meeting the system's resource adequacy. However, estimating the capacity credit of variable renewable energy is challenging due to the variability, uncertainty, and spatial diversity of the renewable resources. This study uses the Regional Energy Deployment System to quantify the impacts on the U.S. power sector through 2050 from misestimations of renewable capacity credit. Results show that small underestimates of the renewable capacity credit have little impact on system buildout, but that large underestimates (>50%) can reduce solar photovoltaic deployment by nearly 100 GW (50%) and wind by up to 43 GW (22.8%) in 2030s. Such large differences are possible because the capacity credit for variable renewable energy can substantially impact the overall costs and value of variable renewable energy relative to other technologies. Such effects are most strongly felt in the mid-term but are less relevant over the long-term due to the declining value of variable resources. Underestimating the capacity credit of variable renewable energy leads to increased system costs and emissions. Conversely, overvaluing the capacity credit of variable renewable energy reduces system costs at the risk of lower reliability. Keywords: Wind, Solar, Renewable Energy, Capacity Value, Capacity Credit, Resource Adequacy.

Suggested Citation

  • Zhou, Ella & Cole, Wesley & Frew, Bethany, 2018. "Valuing variable renewable energy for peak demand requirements," Energy, Elsevier, vol. 165(PA), pages 499-511.
  • Handle: RePEc:eee:energy:v:165:y:2018:i:pa:p:499-511
    DOI: 10.1016/

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