Smoothing the curve: An estimation of the cost of demand variation and the impact of solar and wind

Alexander Hill

Resource and Energy Economics, 2022, vol. 70, issue C

Abstract: Using electrification to decarbonize the energy sector potentially alters the pattern of electricity demand. This paper leverages a unique RTO-level, hourly dataset to identify the impact of exogenous changes in load on electricity supply costs. An increase in load variation of 5 % is associated with a 7.35 % increase in the cost of electricity supply. Higher solar and wind generation in a region is found to lower the cost of load variation, with solar having a more significant effect. (JEL Q41, Q49, L94).

Keywords: Demand variation; Electricity prices; Congestion pricing (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:70:y:2022:i:c:s0928765522000458

DOI: 10.1016/j.reseneeco.2022.101328

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