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Cost of Valued Energy for design of renewable energy systems

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  • Simpson, Juliet
  • Loth, Eric
  • Dykes, Katherine

Abstract

The design of renewable energy systems such as wind turbines or solar panels conventionally employs Levelized Cost of Energy (LCOE), but this metric fails to account for the time-varying value of energy. This is true both for a single turbine or an entire wind farm. To remedy this, two novel, relatively simple metrics are developed herein to value energy based on the time of generation and the grid demand: Levelized Avoided Cost of Energy simplified (LACEs) and Cost of Valued Energy (COVE). These two metrics can be obtained with: 1) a linear price-demand relationship, 2) an estimate of hourly demand, and 3) an estimate of predicted hourly generation data. The results show that value trends for both wind and solar energy were reasonably predicted with these simplified models for the PJM region (a mid-Atlantic region in the USA) with less than 6% error on average, despite significant stochastic variations in actual price and demand throughout the year. A case study with wind turbine machine design showed that increasing Capacity Factor can significantly reduce COVE and thus increase Return on Investment. As such, COVE and LACEs can be valuable tools (compared to LCOE) when designing and optimizing renewable energy systems.

Suggested Citation

  • Simpson, Juliet & Loth, Eric & Dykes, Katherine, 2020. "Cost of Valued Energy for design of renewable energy systems," Renewable Energy, Elsevier, vol. 153(C), pages 290-300.
    • Handle: RePEc:eee:renene:v:153:y:2020:i:c:p:290-300
    DOI: 10.1016/j.renene.2020.01.131
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    Cited by:

    1. Chen, Yisu & Wu, Di & Yu, Yuguo & Gao, Wei, 2021. "Do cyclone impacts really matter for the long-term performance of an offshore wind turbine?," Renewable Energy, Elsevier, vol. 178(C), pages 184-201.
    2. Harrison-Atlas, Dylan & Murphy, Caitlin & Schleifer, Anna & Grue, Nicholas, 2022. "Temporal complementarity and value of wind-PV hybrid systems across the United States," Renewable Energy, Elsevier, vol. 201(P1), pages 111-123.
    3. Qin, Chao (Chris) & Loth, Eric, 2021. "Isothermal compressed wind energy storage using abandoned oil/gas wells or coal mines," Applied Energy, Elsevier, vol. 292(C).
    4. Gao, Xuefeng & Zhang, Yanjun & Cheng, Yuxiang & Huang, Yibin & Deng, Hao & Ma, Yongjie, 2022. "A novel strategy utilizing local fracture networks to enhance CBHE heat extraction performance: A case study of the Songyuan geothermal field in China," Energy, Elsevier, vol. 255(C).
    5. Rishikesh Joshi & Michiel Kruijff & Roland Schmehl, 2023. "Value-Driven System Design of Utility-Scale Airborne Wind Energy," Energies, MDPI, vol. 16(4), pages 1-19, February.
    6. Bennett, Jeffrey A. & Simpson, Juliet G. & Qin, Chao & Fittro, Roger & Koenig, Gary M. & Clarens, Andres F. & Loth, Eric, 2021. "Techno-economic analysis of offshore isothermal compressed air energy storage in saline aquifers co-located with wind power," Applied Energy, Elsevier, vol. 303(C).
    7. Li, Yanxue & Zhang, Xiaoyi & Gao, Weijun & Xu, Wenya & Wang, Zixuan, 2022. "Operational performance and grid-support assessment of distributed flexibility practices among residential prosumers under high PV penetration," Energy, Elsevier, vol. 238(PB).
    8. Philipp Beiter & Aubryn Cooperman & Eric Lantz & Tyler Stehly & Matt Shields & Ryan Wiser & Thomas Telsnig & Lena Kitzing & Volker Berkhout & Yuka Kikuchi, 2021. "Wind power costs driven by innovation and experience with further reductions on the horizon," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 10(5), September.
    9. Helena Martín & Sergio Coronas & Àlex Alonso & Jordi de la Hoz & José Matas, 2020. "Renewable Energy Auction Prices: Near Subsidy-Free?," Energies, MDPI, vol. 13(13), pages 1-21, July.
    10. Mingyu Li & Dongxiao Niu & Zhengsen Ji & Xiwen Cui & Lijie Sun, 2021. "Forecast Research on Multidimensional Influencing Factors of Global Offshore Wind Power Investment Based on Random Forest and Elastic Net," Sustainability, MDPI, vol. 13(21), pages 1-19, November.
    11. Simpson, J.G. & Hanrahan, G. & Loth, E. & Koenig, G.M. & Sadoway, D.R., 2021. "Liquid metal battery storage in an offshore wind turbine: Concept and economic analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).

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