Can Distributed Intermittent Renewable Generation Reduce Future Grid Investments? Evidence from France

Nicolas Astier, Ram Rajagopal and Frank A Wolak

Journal of the European Economic Association, 2023, vol. 21, issue 1, 367-412

Abstract: This paper estimates the relationship between investments in five distributed generation technologies and hourly net withdrawals from over 2,000 electricity distribution networks in France between 2005 and 2018. We find that investments in distributed wind and solar generation have little or no impact on the annual peak of hourly net withdrawals from the distribution grid, while investments in hydroelectric and thermal distributed generation significantly reduce it. An optimistic analysis of the impact of investments in battery storage suggests that high levels are required for distributed wind and solar to deliver similar reductions in the annual peak of hourly net withdrawals. Our results imply that public policies favoring distributed wind and solar generation over utility-scale generation cannot be rationalized by savings in future grid investments.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:21:y:2023:i:1:p:367-412.

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