Real-Time Pricing and the Cost of Clean Power

Imelda Imelda, Matthias Fripp and Michael Roberts
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Matthias Fripp: University of Hawaii at Manoa

No 17-2022, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability implies growing benefits of using real-time retail pricing (RTP). We evaluate the potential gains of RTP using a model that jointly solves investment, supply, storage, and demand to obtain a chronologically detailed dynamic equilibrium for the island of Oahu, Hawai'i. Across a wide range of cost and demand assumptions, we find the gains from RTP in high-renewable systems to exceed those in a conventional fossil system by roughly 6 times to 12 times, markedly lowering the cost of renewable energy integration.

Keywords: Renewable energy; real-time pricing; storage; demand response; optimization (search for similar items in EconPapers)
JEL-codes: Q41 Q42 Q53 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2022-08-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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http://repec.graduateinstitute.ch/pdfs/Working_papers/HEIDWP17-2022.pdf (application/pdf)

Related works:
Journal Article: Real-Time Pricing and the Cost of Clean Power (2024)
Working Paper: Real-Time Pricing and the Cost of Clean Power (2023)
Working Paper: Variable Pricing and the Cost of Renewable Energy (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp17-2022

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