A Minimal System Cost Minimization Model for Variable Renewable Energy Integration: Application to France and Comparison to Mean-Variance Analysis

Alexis Tantet () and Philippe Drobinski ()
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Alexis Tantet: LMD - Laboratoire de Météorologie Dynamique (UMR 8539) - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENPC - École nationale des ponts et chaussées - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - Département des Géosciences - ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, IPSL (FR_636) - Institut Pierre-Simon-Laplace - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNES - Centre National d'Études Spatiales [Toulouse] - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité
Philippe Drobinski: LMD - Laboratoire de Météorologie Dynamique (UMR 8539) - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENPC - École nationale des ponts et chaussées - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - Département des Géosciences - ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, IPSL (FR_636) - Institut Pierre-Simon-Laplace - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNES - Centre National d'Études Spatiales [Toulouse] - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité

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Abstract: The viability of Variable Renewable Energy (VRE)-investment strategies depends on the response of dispatchable producers to satisfy the net load. We lack a simple research tool with sufficient complexity to represent major phenomena associated with the response of dispatchable producers to the integration of high shares of VRE and their impact on system costs. We develop a minimization of the system cost allowing one to quantify and decompose the system value of VRE depending on an aggregate dispatchable production. Defining the variable cost of the dispatchable generation as quadratic with a coefficient depending on macroeconomic factors such as the cost of greenhouse gas emissions leads to the simplest version of the model. In the absence of curtailment, and for particular parameter values, this version is equivalent to a mean-variance problem. We apply this model to France with solar and wind capacities distributed over the administrative regions of metropolitan France. In this case, ignoring the wholesale price effect and variability has a relatively small impact on optimal investments, but leads to largely underestimating the system total cost and overestimating the system marginal cost.

Keywords: renewable energy; variability; energy mix; system cost; mean-variance (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ene and nep-env
Note: View the original document on HAL open archive server: https://hal.sorbonne-universite.fr/hal-03350191v1
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Published in Energies, 2021, 14 (16), pp.5143. ⟨10.3390/en14165143⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03350191

DOI: 10.3390/en14165143

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