Intermittency or Uncertainty? Impacts of Renewable Energy in Electricity Markets

A-Tier
Journal: Journal of the Association of Environmental and Resource Economists
Year: 2024
Volume: 11
Issue: 6
Pages: 1351 - 1385

Authors (2)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Renewable energy resources possess unique characteristics—intermittency and uncertainty—that pose challenges to electricity grid operations. We study these characteristics and find that uncertainty, represented by wind forecast error, has larger grid impacts than intermittency, represented by hourly wind generation changes. Compared to wind generation that was correctly forecast, uncertainty yields roughly double the effect on the marginal cost of operating the grid and greater adjustment costs as conventional generators must start up to balance the grid. While this finding is important given the persistence of wind generation uncertainty over our study period, reducing wind forecast error to the level of demand forecast error would lower costs by a modest half a million dollars per year.

Technical Details

RePEc Handle
repec:ucp:jaerec:doi:10.1086/729841
Journal Field
Environment
Author Count
2
Added to Database
2026-01-29