Discussion Paper: Addressing Intermittency with Dispatchable Solar and Variable Supply Electric Power Services

23 Pages Posted: 20 Oct 2017

See all articles by Steven O. Kimbrough

Steven O. Kimbrough

University of Pennsylvania - The Wharton School

Michael McElfresh

Independent

Frederic Murphy

Temple University - Department of Marketing and Supply Chain Management

John Sullivan-Fedock

University of Pennsylvania

Date Written: October 6, 2017

Abstract

As measured standardly by levelized cost of energy (LCOE), onshore wind and utility scale solar PV (photovoltaic) have been rapidly declining in cost and are now reported to be the cheapest ways of generating electric power. While this is indisputably a welcome development, the fact that renewables in general --- wind and solar in particular --- are variable and available only intermittently makes LCOE a quite incomplete, perhaps even misleading, measure of value because it neglects the system cost of accommodating renewables for the sake of meeting demand and keeping the grid in balance. The additional cost of building and employing peaker plants (mainly fueled by natural gas), which serve as backup and reserve and hence are often idle, has led many observers to pessimistic conclusions about the economic viability of very high levels of penetration by renewable sources of energy.

This paper fully acknowledges the problem. We present an ensemble of several ideas that plausibly may be useful for mitigating the intermittency problem accompanying high levels of penetration of renewable power generation, particularly solar PV (photovoltaic). The ensemble, presented as a proposed setup or institution, includes provision for dispatchable solar PV (and by extension wind power) as well as provision for a market for what we call variable supply electric power. This is described in the paper and contrasted with existing services, which may be described as guaranteed supply. Further, we confront our proposed setup with three years of insolation data for Philadelphia, PA. This leads to a number of quantified measures of variability that should be useful for system design and management.

This is an exploratory paper, aiming at an initial vetting of these ideas. Very much remains to be done to investigate them fully.

Keywords: renewable energy, solar PV,energy markets

JEL Classification: 030

Suggested Citation

Kimbrough, Steven O. and McElfresh, Michael and Murphy, Frederic and Sullivan-Fedock, John, Discussion Paper: Addressing Intermittency with Dispatchable Solar and Variable Supply Electric Power Services (October 6, 2017). Available at SSRN: https://ssrn.com/abstract=3055868 or http://dx.doi.org/10.2139/ssrn.3055868

Steven O. Kimbrough (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Michael McElfresh

Independent ( email )

Frederic Murphy

Temple University - Department of Marketing and Supply Chain Management ( email )

Philadelphia, PA 19122
United States

John Sullivan-Fedock

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

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