Changes in the Economic Value of Variable Generation at High Penetration Levels: A Pilot Case Study of California

The model is herein applied with a case study that is loosely based on California in 2030. Increasing amounts of wind, photovoltaics (PV), and concentrating solar power (CSP) with and without thermal energy storage (TES) are added one at a time. The marginal economic value of these renewable energy sources is estimated and then decomposed into capacity value, energy value, day-ahead forecast error cost, and ancillary services. The marginal economic value, as dened here, is primarily based on the combination of avoided capital investment cost and avoided variable fuel and operations and maintenance costs from other power plants in the power system. Though the model only captures a subset of the benets and costs of renewable energy, it nonetheless provides unique insights into how the value of that subset changes with technology and penetration level.