Building Blocks: Investment in Renewable and Nonrenewable Technologies

James Bushnell

No 2011/53, RSCAS Working Papers from European University Institute

Abstract: This paper examines how the increasing penetration of intermittent renewable generation can change the economic landscape for merchant power investment in conventional thermal generation. An equilibrium model of generation investment is developed, based on the long-standing principles of finding the optimal mix of capital intensive and higher marginal cost resources to serve a market with fluctuating demand. This model is then applied to data on electricity markets from several regions of the western United States to examine how the interaction of increasing wind capacity and electricity market design affects the equilibrium mix of thermal capacity and the revenues earned by renewable suppliers.

Keywords: Wind generation; Equilibrium Model; optimal mix; Market Design (search for similar items in EconPapers)
Date: 2011-10-07
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Building Blocks: Investment in Renewable and Non-Renewable Technologies (2010)
Working Paper: Building blocks: investment in renewable and non-renewable technologies (2010)
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