Abstract
<h2>Summary</h2> The value of electricity generated from wind and solar sources declines as supply increases. This decline in value has varied over time and across regions, indicating that strategies to mitigate value decline will need to be carefully targeted. To help guide development of these strategies, we empirically determine wind and solar value at ∼2,100 plants within United States wholesale markets by using local prices and plant-specific generation profiles. We determine how each plant loses (or gains) value because of its output profile, transmission congestion, and curtailment. In regions where wind or solar account for roughly 20% of electricity generation, its value is 30% to 40% below the regional average value of a flat output profile at all plants. Solar value reductions are most sensitive to output profile and wind value reductions are sensitive to both profile and congestion, region dependent. Curtailment was not a major source of value reduction.
Highlights
Variable renewable energy (VRE), referring to solar and wind power in this study, is essential to cost-effectively decarbonizing the electricity grid
We note that our analysis of wind and solar value differences due to profile, transmission congestion, and curtailment is split into three parts, with the first part focused on trends in energy value
In our formulation, for example, transmission congestion is a function of both location and timing, that is, a collocated wind and solar plant would face different levels of transmission congestion. This result is fairly intuitive, and we do believe interaction between the terms is limited in a practical sense— when we discuss potential solutions to VRE value reductions, we show an example of how transmission infrastructure investments have curbed congestion value reductions while having little effect on profile value differences
Summary
Variable renewable energy (VRE), referring to solar and wind power in this study, is essential to cost-effectively decarbonizing the electricity grid. We show that the dominant cause of value decline (output profile, transmission congestion, or curtailment) varies between wind and solar, and by region.
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