Evaluating High Penetration of Intermittent Renewable Electricity Policies

Abstract

Wind and solar generation are intermittent generation sources. System integration costs include the costs of spinning reserves, increased transmission costs and storage costs. The overarching research problem examines evaluation of different policies that lead to high penetration of intermittent renewable electricity sources. The first research question examined the emissions reduction benefits and system integration costs of policy mandates for high penetration of intermittent renewable electricity technologies for Midcontinent Independent System Operator (MISO). The second research question examines the total systems costs of mandates for renewable electricity generation and a carbon tax using a TIMES model for MISO. The third research question examined the emissions and costs of policy mandates for high penetration of wind and solar electricity generation technologies for MISO when short-term operational constraints are considered. TIMES minimizes the total system cost subject to constraints of capacity activity, commodity use, satisfying demand, and peaking reserve. The US EPA 9 region model contains end use technologies for commercial, industrial, residential and transport sectors. The technologies that do not serve end use demands with electricity have been removed. The number of time slices which are the time divisions of the year was increased to 288 to help capture wind and solar generation dynamics at higher levels of penetration and help better understand spinning reserves requirements and costs. Based on the candidate sites for solar and wind generation, the costs include expected transmission costs, and any investment and production costs specific to the candidate sites costs. The results show that as the level of the mandate for wind and solar generation increases, their costs increased. Emissions saving from the mandates were converted to reductions in the Social Costs of Emissions (SCE) (See Section 2.4.4 for the definition) to compare system cost to with the savings in SCE. The savings in the SCE increase as the level of the mandate increases. However, the savings in SCE do not justify the system cost increases associated with the mandates. The carbon tax and mandate policies implemented held the overall emission reductions constant where a 35% reduction of CO2e emissions from 2020 levels by 2050 in compared to the reference scenario. The carbon tax (Policy I) had the lower of Levelized Marginal Cost of Electricity (LMCOE) (discounted value of generation for a year based on the generation weighted Marginal Cost of Electricity), while the mandate (Policy II) had the higher of LMCOE. Similarly, Policy I had the lowest of discounted total system cost and Policy II had higher discounted total system cost. The cost to society is underestimated when short-term operational constraints are ignored. The addition of short-term operational constraints led to increased total systems cost and greater emissions savings as the level of the mandate increased. Adding short-term operating constraints also gives a more complete understating of CO2e emissions savings for the different scenarios as there is a decrease in coal generation and increase in natural gas generation led to increased CO2e emissions savings. The addition of short-term operational constraints shows on one hand the impact of the policy and on the other hand the consequences of not including some of the cost realities.