Real-Time Pricing and the Cost of Clean Power

Imelda Imelda, Matthias Fripp and Michael Roberts
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Matthias Fripp: University of Hawai’i at M¯anoa, University of Hawai’i Economic Research Organization and Renewable Energy and Island Sustainability group

No 2023-1R, Working Papers from University of Hawaii Economic Research Organization, University of Hawaii at Manoa

Abstract: Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability implies growing benefits of using real-time retail pricing (RTP). We evaluate the potential gains of RTP using a model that jointly solves investment, supply, storage, and demand to obtain a chronologically detailed dynamic equilibrium for the island of Oahu, Hawai’i. We find that RTP reduces costs in high-renewable systems by roughly 6 to 12 times as much as in fossil systems holding demand assumptions fixed, markedly lowering the cost of clean energy integration.

Keywords: Renewable energy; real-time pricing; storage; demand response; optimization (search for similar items in EconPapers)
JEL-codes: Q41 Q42 Q53 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2022-08, Revised 2023-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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https://uhero.hawaii.edu/wp-content/uploads/2023/01/UHEROwp2301R.pdf First version, 2023 (application/pdf)

Related works:
Journal Article: Real-Time Pricing and the Cost of Clean Power (2024)
Working Paper: Real-Time Pricing and the Cost of Clean Power (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hae:wpaper:2023-1r

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