IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/44219.html
   My bibliography  Save this paper

Estimating the value of additional wind and transmission capacity in the rocky mountain west

Author

Listed:
  • Godby, Robert
  • Torell, Greg
  • Coupal, Roger

Abstract

The expansion of wind-generation in the United States poses significant challenges to policy-makers, particularly because wind’s intermittency and unpredictability can exacerbate problems of congestion on a transmission constrained grid. Understanding these issues is necessary if optimal development of wind energy and transmission is to occur. This paper applies a model that integrates the special concerns of electricity generation to empirically consider the challenges of developing wind resources in the Rocky Mountain region of the United States. Given the lack the high frequency data needed to address the special problems of intermittency and congestion, our solution is to create a dispatch model of the region and to use simulations to generate the necessary data, then use this data to understand the development patterns that have occurred as wind resources have been developed. Our results indicate that the price effects caused by changes in power output at intermittent sources are strongly dependent on supply conditions and the presence of market distortions caused by transmission constraints. Peculiarities inherent in electric grid operation can cause system responses that are not always intuitive. The distribution of the rents accruing to wind generation, particularly in unexpectedly windy periods are strongly dependent on the allocation of transmission rights when congestion occurs, which impacts potential returns to developing wind resources. Incidents of congestion depend on the pace of development of wind and transmission capacity. Not accounting for such distortions may cause new development to worsen market outcomes if mistaken estimates of benefits or costs lead to sub-optimal development of wind and transmission facilities.

Suggested Citation

  • Godby, Robert & Torell, Greg & Coupal, Roger, 2013. "Estimating the value of additional wind and transmission capacity in the rocky mountain west," MPRA Paper 44219, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:44219
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/44219/1/MPRA_paper_44219.pdf
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Green, Richard & Vasilakos, Nicholas, 2010. "Market behaviour with large amounts of intermittent generation," Energy Policy, Elsevier, vol. 38(7), pages 3211-3220, July.
    2. Richard Green, 2007. "Nodal pricing of electricity: how much does it cost to get it wrong?," Journal of Regulatory Economics, Springer, vol. 31(2), pages 125-149, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lauren Knapp & Jacob Ladenburg, 2015. "How Spatial Relationships Influence Economic Preferences for Wind Power—A Review," Energies, MDPI, Open Access Journal, vol. 8(6), pages 1-25, June.
    2. Lynch & John Curtis, 2016. "The effects of wind generation capacity on electricity prices and generation costs: a Monte Carlo analysis," Applied Economics, Taylor & Francis Journals, vol. 48(2), pages 133-151, January.
    3. Harrison Fell & Daniel T. Kaffine, 2014. "A one-two punch: Joint effects of natural gas abundance and renewables on coal-fired power plants," Working Papers 2014-10, Colorado School of Mines, Division of Economics and Business.
    4. Oliver, Matthew E., 2015. "Economies of scale and scope in expansion of the U.S. natural gas pipeline network," Energy Economics, Elsevier, vol. 52(PB), pages 265-276.
    5. Curtis, John & Lynch, Muireann Á. & Zubiate, Laura, 2016. "The impact of the North Atlantic Oscillation on electricity markets: A case study on Ireland," Energy Economics, Elsevier, vol. 58(C), pages 186-198.

    More about this item

    Keywords

    transmission; wind integration; wind energy; renewable energy; electricity grid; transmission value; dispatch model;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:44219. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.