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Marginal Curtailment and the Efficient Cost of Clean Power

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  • Newbery, D.
  • Chyong, C. K

Abstract

At high penetration levels, the marginal curtailment of an extra MW of wind is typically 3+ times its average. With a portfolio of different technologies (on- and offshore wind, solar PV), an extra MW of any single technology can increase the curtailment of all technologies, increasing the marginal: average curtailment ratio and the cost of displacing fossil generation. Higher expected future capacity factors amplify this ratio. Increasing nuclear output can also cause renewable curtailment but its effect is smaller than increasing VRE to give equivalent extra output. The choice of the VRE expansion plan depends on whether the potential, average, or marginal capacity factors are used. Storage and trade significantly increase the curtailment ratio but lower delivered costs, with higher VRE penetration in neighbouring markets further amplifying curtailment.

Suggested Citation

  • Newbery, D. & Chyong, C. K, 2025. "Marginal Curtailment and the Efficient Cost of Clean Power," Cambridge Working Papers in Economics 2526, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2526
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    References listed on IDEAS

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    1. Koltsaklis, Nikolaos E. & Dagoumas, Athanasios S., 2018. "State-of-the-art generation expansion planning: A review," Applied Energy, Elsevier, vol. 230(C), pages 563-589.
    2. Green, Richard & Léautier, Thomas-Olivier, 2015. "Do costs fall faster than revenues? Dynamics of renewables entry into electricity markets," TSE Working Papers 15-591, Toulouse School of Economics (TSE).
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    Cited by:

    1. Newbery, David, 2025. "Implications of renewable electricity curtailment for delivered costs," Energy Economics, Elsevier, vol. 145(C).

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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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