Intermittent Electric Generation Technologies and Smart Meters: Substitutes or Complements

Fadoua Chiba and Sébastien Rouillon

Revue d'économie politique, 2020, vol. 130, issue 4, 573-613

Abstract: We model a simplified electric market with producers using either conventional or intermittent electric generators and consumers equipped with either smart meter with real-time pricing or traditional meters with a flat tariff. 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 2018 and policy objective for 2030. JEL classification: D24, D41, Q41, L11

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: 2020
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Citations: View citations in EconPapers (2)

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Working Paper: Intermittent electric generation technologies and smart meters: substitutes or complements (2018)
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