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Estimating the value of additional wind and transmission capacity in the rocky mountain west

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  • Godby, Robert
  • Torell, Gregory L.
  • Coupal, Roger

Abstract

The expansion of wind-generation in the United States poses significant challenges to policy-makers, particularly because wind's intermittency and unpredictability can exacerbate problems of congestion on a transmission-constrained grid. Understanding these issues is necessary if optimal development of wind energy and transmission is to occur. This paper applies a model that integrates the special concerns of electricity generation to empirically consider the challenges of developing wind resources in the Rocky Mountain region of the United States. Given the lack the high frequency data needed to address the special problems of intermittency and congestion, our solution is to create a dispatch model of the region and to use simulations to generate the necessary data, then use this data to understand patterns that have occurred as wind resources have been developed.

Suggested Citation

  • Godby, Robert & Torell, Gregory L. & Coupal, Roger, 2014. "Estimating the value of additional wind and transmission capacity in the rocky mountain west," Resource and Energy Economics, Elsevier, vol. 36(1), pages 22-48.
    • Handle: RePEc:eee:resene:v:36:y:2014:i:1:p:22-48
    DOI: 10.1016/j.reseneeco.2013.11.010
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    References listed on IDEAS

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    1. Green, Richard & Vasilakos, Nicholas, 2010. "Market behaviour with large amounts of intermittent generation," Energy Policy, Elsevier, vol. 38(7), pages 3211-3220, July.
    2. Richard Green, 2007. "Nodal pricing of electricity: how much does it cost to get it wrong?," Journal of Regulatory Economics, Springer, vol. 31(2), pages 125-149, April.
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    Cited by:

    1. Curtis, John & Lynch, Muireann Á. & Zubiate, Laura, 2016. "The impact of the North Atlantic Oscillation on electricity markets: A case study on Ireland," Energy Economics, Elsevier, vol. 58(C), pages 186-198.
    2. Harrison Fell & Daniel T. Kaffine, 2014. "A one-two punch: Joint effects of natural gas abundance and renewables on coal-fired power plants," Working Papers 2014-10, Colorado School of Mines, Division of Economics and Business.
    3. Lynch & John Curtis, 2016. "The effects of wind generation capacity on electricity prices and generation costs: a Monte Carlo analysis," Applied Economics, Taylor & Francis Journals, vol. 48(2), pages 133-151, January.
    4. Fell, Harrison & Kaffine, Daniel T., 2014. "A one-two punch: Joint eects of natural gas abundance and renewables on coal-red power plants," CEnREP Working Papers 340063, North Carolina State University, Department of Agricultural and Resource Economics.
    5. Brown, Jason P. & Coupal, Roger & Hitaj, Claudia & Kelsey, Timothy W. & Krannich, Richard S. & Xiarchos, Irene M., 2017. "New Dynamics in Fossil Fuel and Renewable Energy for Rural America," USDA Miscellaneous 260676, United States Department of Agriculture.
    6. Lauren Knapp & Jacob Ladenburg, 2015. "How Spatial Relationships Influence Economic Preferences for Wind Power—A Review," Energies, MDPI, vol. 8(6), pages 1-25, June.
    7. Oliver, Matthew E., 2015. "Economies of scale and scope in expansion of the U.S. natural gas pipeline network," Energy Economics, Elsevier, vol. 52(PB), pages 265-276.

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    More about this item

    Keywords

    Electricity markets; Electricity transmission; Dispatch model; Electricity grid management; Wind integration; Wind intermittency;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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