Economic Value of Intermittent Power Generation

35 Pages Posted: 2 Mar 2013

See all articles by Maria Kopsakangas-Savolainen

Maria Kopsakangas-Savolainen

Finnish Environment Institute; University of Oulu - Department of Economics, Accounting and Finance

Rauli Svento

University of Oulu - Department of Economics, Accounting and Finance

Date Written: February 28, 2013

Abstract

A significant part of the renewable energy differs from conventional generating technologies such that they produce electricity intermittently. If traditional levelized cost approach is used it gives inappropriate and misleading results. We utilize a long-run oriented Real-Time Price based model to analyze the economic value of intermittent electricity generation. We study the impacts of a change in production profile and increase in the share of intermittent generation to the market prices, equilibrium of other capacities, production costs, profits and CO2 emissions. Our approach which uses hourly output profiles and associated market value of electricity, gives plausible economic values for electricity.

Keywords: Intermittent generation, Economic value, Emission reductions

JEL Classification: L11, Q41, Q21

Suggested Citation

Kopsakangas-Savolainen, Maria and Svento, Rauli, Economic Value of Intermittent Power Generation (February 28, 2013). Available at SSRN: https://ssrn.com/abstract=2226363 or http://dx.doi.org/10.2139/ssrn.2226363

Maria Kopsakangas-Savolainen (Contact Author)

Finnish Environment Institute ( email )

PO Box 413
Oulu, 90014
Finland

University of Oulu - Department of Economics, Accounting and Finance ( email )

PO Box 4600
FIN-90014 University of Oulu
Finland

Rauli Svento

University of Oulu - Department of Economics, Accounting and Finance ( email )

PO Box 4600
FIN-90014 University of Oulu
Finland

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