Using Probability of Exceedance to Compare the Resource Risk of Renewable and Gas-Fired Generation
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Of the myriad risks surrounding long-term investments in power plants, resource risk is one of the most difficult to mitigate, and is also perhaps the risk that most-clearly distinguishes renewable generation from natural gas-fired generation. For renewable generators like wind and solar projects, resource risk manifests as a quantity risk—i.e., the risk that the quantity of wind and insolation will be less than expected.i For gas-fired generators (i.e., a combined-cycle gas turbine or “CCGT”), resource risk manifests primarily as a price risk—i.e., the risk that natural gas will cost more than expected. Most often, resource risk—and natural gas price risk in particular—falls disproportionately on utility ratepayers, who are typically not well-equipped to manage this risk. As such, it is incumbent upon utilities, regulators, and policymakers to ensure that resource risk is taken into consideration when making or approving resource decisions, or enacting policies that influence the development of the electricity sector more broadly.
- Research Organization:
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Sponsoring Organization:
- USDOE
- OSTI ID:
- 1373379
- Report Number(s):
- LBNL-1007269; ir:1007269
- Country of Publication:
- United States
- Language:
- English
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