The Optimal Share of Variable Renewables

摘要: This paper estimates the welfare-optimal market share of wind and solar power, explicitly taking into account their output variability. We present a theoretical valuation framework that consistently accounts for impact fluctuations over time, forecast errors, location generators in power grid on marginal value electricity from renewables. Then optimal Northwestern Europe's generation mix is estimated calibrated numerical model. find long-term to be 20%, three times more than today; however, we also significant parameter uncertainty. Variability significantly impacts results: if winds were constant, would 60%. In addition, effect technological change, price shocks, policies assessed. explain several surprising findings, including negative CO2 prices deployment. JEL - C61, C63, Q42, Q48, D41