skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Viewpoints: Is Renewable Energy Cost-Effective?

Abstract

No abstract prepared.

Authors:
Publication Date:
Research Org.:
National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
901953
DOE Contract Number:
AC36-99-GO10337
Resource Type:
Journal Article
Resource Relation:
Journal Name: Natural Resources Forum; Journal Volume: 30; Journal Issue: 2006
Country of Publication:
United States
Language:
English
Subject:
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION; RENEWABLE ENERGY SOURCES; COST ESTIMATION; COST BENEFIT ANALYSIS; National Renewable Energy Laboratory

Citation Formats

Arvizu, D. E. Viewpoints: Is Renewable Energy Cost-Effective?. United States: N. p., 2006. Web.
Arvizu, D. E. Viewpoints: Is Renewable Energy Cost-Effective?. United States.
Arvizu, D. E. Sun . "Viewpoints: Is Renewable Energy Cost-Effective?". United States. doi:.
@article{osti_901953,
title = {Viewpoints: Is Renewable Energy Cost-Effective?},
author = {Arvizu, D. E.},
abstractNote = {No abstract prepared.},
doi = {},
journal = {Natural Resources Forum},
number = 2006,
volume = 30,
place = {United States},
year = {Sun Jan 01 00:00:00 EST 2006},
month = {Sun Jan 01 00:00:00 EST 2006}
}
  • It is important to define an energy efficiency standard carefully. If energy efficiency is defined relative to a baseline level of consumption, it is critical that the baseline be permitted to grow at an appropriate rate over time. Otherwise, the requirements to use renewable generation will be less flexible than under a pure renewable electricity requirement. (author)
  • Markets for renewable electricity have grown significantly in recent years, motivated in part by federal tax incentives and in part by state renewables portfolio standards and renewable energy funds. State renewables portfolio standards, for example, motivated approximately 45% of the 4,300 MW of wind power installed in the U.S. from 2001 through 2004, while renewable energy funds supported an additional 15% of these installations. Despite the importance of these state policies, a less widely recognized driver for renewable energy market growth is poised to also play an important role in the coming years: utility integrated resource planning (IRP). Formal resourcemore » planning processes have re-emerged in recent years as an important tool for utilities and regulators, particularly in regions where retail competition has failed to take root. In the western United States, recent resource plans contemplate a significant amount of renewable energy additions. These planned additions - primarily coming from wind power - are motivated by the improved economics of wind power, a growing acceptance of wind by electric utilities, and an increasing recognition of the inherent risks (e.g., natural gas price risk, environmental compliance risk) in fossil-based generation portfolios. The treatment of renewable energy in utility resource plans is not uniform, however. Assumptions about the direct and indirect costs of renewable resources, as well as resource availability, differ, as do approaches to incorporating such resources into the candidate portfolios that are analyzed in utility IRPs. The treatment of natural gas price risk, as well as the risk of future environmental regulations, also varies substantially. How utilities balance expected portfolio cost versus risk in selecting a preferred portfolio also differs. Each of these variables may have a substantial effect on the degree to which renewable energy contributes to the preferred portfolio of each utility IRP. This article, which is based on a longer report from Berkeley Lab, examines how twelve western utilities - Avista, Idaho Power, NorthWestern Energy (NorthWestern or NWE), Portland General Electric (PGE), Puget Sound Energy (PSE), PacifiCorp, Public Service Company of Colorado (PSCo), Nevada Power, Sierra Pacific, Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) - treat renewable energy in their recent resource plans. In aggregate, these utilities supply approximately half of all electricity demand in the western United States. In reviewing these plans, our purpose is twofold: (1) to highlight the growing importance of utility IRP as a current and future driver of renewable energy, and (2) to suggest possible improvements to methods used to evaluate renewable energy as a resource option. This article begins with a discussion of the planned renewable energy additions called for by the twelve utilities in our sample, followed by an overview of how these plans incorporated renewables into candidate portfolios, and a review of the specific technology cost and performance assumptions they made, primarily for wind power. We then turn to the utilities analysis of natural gas price and environmental compliance risks, and examine how the utilities traded off portfolio cost and risk in selecting a preferred portfolio.« less
  • Dynamic analysis of hybrid energy systems (HES) under flexible operation and variable renewable generation is considered in order to better understand various challenges and opportunities associated with the high system variability arising from the integration of renewable energy into the power grid. Unique consequences are addressed by devising advanced HES solutions in which multiple forms of energy commodities, such as electricity and chemical products, may be exchanged. Dynamic models of various unit operations are developed and integrated within two different HES options. One HES option, termed traditional, produces electricity only and consists of a primary heat generator (PHG) (e.g., amore » small modular reactor), a steam turbine generator, a wind farm, and a battery storage. The other HES option, termed advanced, includes not only the components present in the traditional option but also a chemical plant complex to repurpose excess energy for non-electricity services, such as for the production of chemical goods (e.g., transportation fuel). In either case, a given HES is connected to the power grid at a point of common coupling and requested to deliver a certain electricity generation profile as dictated by a regional power grid operator based on a predicted demand curve. Dynamic analysis of these highly-coupled HES are performed to identify their key dynamical properties and limitations and to prescribe solutions for best managing and mitigating the high variability introduced from incorporating renewable energy into the energy mix. A comparative dynamic cost analysis is also conducted to determine best HES options. The cost function includes a set of metrics for computing fixed costs, such as fixed operations and maintenance (O&M) and overnight capital costs, and also variable operational costs, such as cost of variability, variable O&M cost, and cost of environmental impact, together with revenues. Assuming different options for implementing PHG (e.g., natural gas, coal, nuclear), preliminary results identify the level of renewable penetration at which a given advanced HES option (e.g., a nuclear hybrid) becomes increasingly more economical than a traditional electricity-only generation solution. Conditions are also revealed under which carbon resources may be better utilized as carbon sources for chemical production rather than as combustion material for electricity generation.« less