Assessing the value of wind generation in future carbon constrained electricity industries

Peerapat Vithayasrichareon and Iain F. MacGill

Energy Policy, 2013, vol. 53, issue C, 400-412

Abstract: This paper employs a novel Monte-Carlo based generation portfolio assessment tool to explore the implications of increasing wind penetration and carbon prices within future electricity generation portfolios under considerable uncertainty. This tool combines optimal generation mix techniques with Monte Carlo simulation and portfolio analysis methods to determine expected overall generation costs, associated cost uncertainty and expected CO2 emissions for different possible generation portfolios. A case study of an electricity industry with coal, Combined Cycle Gas Turbines (CCGT), Open Cycle Gas Turbines (OCGT) and wind generation options that faces uncertain future fossil-fuel prices, carbon pricing, electricity demand and plant construction costs is presented to illustrate some of the key issues associated with growing wind penetrations. The case study uses half-hourly demand and wind generation data from South Eastern Australia, and regional estimates of new-build plant costs and characteristics. Results suggest that although wind generation generally increases overall industry costs, it reduces associated cost uncertainties and CO2 emissions. However, there are some cases in which wind generation can reduce the overall costs of generation portfolios. The extent to which wind penetration affects industry expected costs and uncertainties depends on the level of carbon price and the conventional technology mix in the portfolios.

Keywords: Generation portfolio analysis; Wind power integration; Carbon price (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421512009676
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:53:y:2013:i:c:p:400-412

DOI: 10.1016/j.enpol.2012.11.002

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().