Nodal pricing in Ontario, Canada: Implications for solar PV electricity

Sarah J. Brown and Ian H. Rowlands

Renewable Energy, 2009, vol. 34, issue 1, 170-178

Abstract: This article investigates the extent to which the value of solar electricity (that is, electricity generated by photovoltaics), a form of distributed generation, would be higher under a nodal pricing system as compared to a uniform pricing system. More specifically, solar radiation and electricity market data for the period 1 January 2005–31 December 2006 are examined for locations near Mississauga, Ontario and Kingston, Ontario. The hybrid optimization model for electric renewables (HOMER) program is used for the simulation of solar electricity output. For Mississauga, the average monthly value of the solar electricity based on Ontario's uniform pricing system (the hourly Ontario energy price, or HOEP) was C$20.62. Based on nodal pricing, the average monthly value was C$27.20 per month (32% higher). For Kingston, the average monthly value of the solar electricity based on HOEP was C$23.78 per month. Based on nodal pricing, the average monthly value was C$36.03 (52% higher). Over the two-year period, the monthly differences were greatest during the summer, with a 53% spread in June in Mississauga and a 106% spread in May in Kingston. As debates regarding electricity futures progress, the importance of proper valuation of alternative generation sources continues to be critical. This research aims to contribute to discussions regarding the extent to which a nodal pricing system could facilitate the contribution of solar electricity to a sustainable electricity system in Ontario.

Keywords: Canada; Distributed generation; Electricity; Markets; Nodal pricing; Photovoltaics (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148108000839
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:renene:v:34:y:2009:i:1:p:170-178

DOI: 10.1016/j.renene.2008.02.029

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

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