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Integration Costs Revisited – An economic framework for wind and solar variability

  • The integration of wind and solar generators into power systems causes “integration costs” – for grids, balancing services, more flexible operation of thermal plants, and reduced utilization of the capital stock embodied in infrastructure, among other things. This paper proposes a framework to analyze and quantify these costs. We propose a definition of integration costs based on the marginal economic value of electricity, or market value – as such a definition can be more easily used in economic cost-benefit assessment than previous approaches. We suggest decomposing integration costs intro three components, according to the principal characteristics of wind and solar power: temporal variability, uncertainty, and location-constraints. Quantitative estimates of these components are extracted from a review of 100 + published studies. At high penetration rates, say a wind market share of 30–40%, integration costs are found to be 25–35 €/MWh, i.e. up to 50% of generation costs. While these estimates are system-specific and subject to significant uncertainty, integration costs are certainly too large to be ignored in high-penetration assessments (but might be ignored at low penetration). The largest single factor is reduced utilization of capital embodied in thermal plants, a cost component that has not been accounted for in most previous integration studies.

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Metadaten
Document Type:Article
Language:English
Author(s):Lion HirthORCiD, Falko Ueckerdt, Ottmar EdenhoferORCiD
Parent Title (English):Renewable Energy
ISSN:0960-1481
Publisher:Elsevier Ltd
Publication year:2015
Publishing Institution:Hertie School
First Page:925
Last Page:939
DOI:https://doi.org/10.1016/j.renene.2014.08.065
Release Date:2017/07/24
Tag:Integration cost; Solar power; Variable renewables; Wind power
Volume:74
Hertie School Research:Centre for Sustainability
Licence of document (German):Metadaten (öffentlich), post-print
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