Intermittent electric generation technologies and smart meters: substitutes or complements

Fadoua Chiba and Sébastien Rouillon

Cahiers du GREThA (2007-2019) from Groupe de Recherche en Economie Théorique et Appliquée (GREThA)

Abstract: We model a simplified electric market with producers using either conventional or intermittent electric generators and consumers equipped with either smart or traditional meters. We calculate the investment in intermittent technologies and smart meters in a social optimum. We find that the optimal penetration of smart meters is increasing in the volatility of the electric spot price. As a consequence, intermittent capacities and smart-meters are complement, only if the correlation existing between intermittent energy and demand is negative or if the capacity of intermittent generators is large enough. Otherwise, larger intermittent capacities actually help to decrease the volatility of the electric spot price, making smart-meters less useful. We also give a numeral application, calibrated to represent the French electric market in 2016 and policy objective for 2030. We show in particular that a general adoption of smart meters would be optimal only if the cost of installing and operating smart meters was unrealistically low.

Keywords: Capacity choice; electricity; intermittency; renewable energy (search for similar items in EconPapers)
JEL-codes: D24 D41 L11 Q41 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-ene, nep-knm and nep-reg
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Journal Article: Intermittent Electric Generation Technologies and Smart Meters: Substitutes or Complements (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:grt:wpegrt:2018-11

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