Valuation of Distributed Wind in an Isolated System

Sarah Barrows, Kendall Mongird, Brian Naughton and Rachid Darbali-Zamora
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Sarah Barrows: Pacific Northwest National Laboratory (PNNL), Richland, WA 99352, USA
Kendall Mongird: Pacific Northwest National Laboratory (PNNL), Portland, OR 97204, USA
Brian Naughton: Sandia National Laboratories (SNL), Albuquerque, NM 87123, USA
Rachid Darbali-Zamora: Sandia National Laboratories (SNL), Albuquerque, NM 87123, USA

Energies, 2021, vol. 14, issue 21, 1-20

Abstract: Remote communities are increasingly adopting renewable energy, such as wind, as they transition away from diesel energy generation. It is important to understand the benefits and costs of wind energy to isolated systems so that decision-makers can optimize their choices in these communities. There are few examples of valuation of wind energy as a distributed resource and numerous differences in valuation approaches, especially in the inclusion of environmental and economic impacts. We apply a distributed wind valuation framework to calculate the benefits and costs of wind in St. Mary’s, Alaska, to the local electric cooperative and to society, finding that the project does not have a favorable benefit-to-cost ratio unless societal benefits are included, in which case the benefit-to-cost ratio is nearly double. Government funding is important to reducing the initial capital expenditures of this wind project and will likely be the case for projects with similar characteristics. Additional fuel savings benefits are potentially possible for this project through technological additions such as energy storage and advanced controls.

Keywords: isolated systems; distributed wind; valuation; economics; benefit–cost analysis; distributed energy resources; techno-economic analysis; remote communities (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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