Combination of non-linear optimization methods for achieving firm electricity from renewables at low costs globally

Wolf Grossmann (), Iris Grossmann () and Karl Steininger ()
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Wolf Grossmann: University of Graz, Austria
Iris Grossmann: Chatham University, Pittsburgh, United States
Karl Steininger: University of Graz, Austria

No 2025-06, Graz Economics Papers from University of Graz, Department of Economics

Abstract: For the transition to fully renewable energy the residual load - the portion of the load that is not yet generated from renewables - has to be replaced with renewable electricity. Photovoltaics (PV) is of particular interest given possible low electricity costs. However, firm electricity from PV is still expensive due to intermittency, in particular seasonally. We describe and apply a two-part non-linear optimization method. First, optimal percentages of solar generation capacity at different sites are determined to closely approximate a given load pattern. Results are best when sites on both hemispheres and in many time zones are connected. We then describe and apply a second method that utilizes the combination of sites determined during the first phase to find a cost-optimal pairing of PV and storage that delivers firm electricity for the given load pattern. Costs of firm electricity for common load patterns, e.g. the European Union or a linear load, could be less than USD 20/MWh, without transmission, if global generation sites are utilized. Long submarine power cables are being planned and built globally, enabling enhanced technological learning and consequently declining costs. We discuss several examples of combinations of solar generation sites with overall electricity costs including transmission depending on expected learning rates. This approach could help identify stable configurations for affordable and firm electricity from renewables and inform plans for necessary long-distance power transmission infrastructure. We also give an example of an intercontinental power cable that could be built along the known route of an existing submarine telecom cable.

Keywords: renewable electricity; photovoltaics; storage; firm electricity cost; renewable system design (search for similar items in EconPapers)
JEL-codes: C61 D24 Q21 Q42 (search for similar items in EconPapers)
Date: 2025-06
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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