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Long-Term Resource Adequacy in Wholesale Electricity Markets with Significant Intermittent Renewables

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  • Frank A. Wolak

Abstract

Growing amounts of intermittent renewable generation capacity substantially increase the complexity of determining whether sufficient energy will be available to meet hourly demands throughout the year. As the events of August 2020 in California and February 2021 in Texas demonstrate, supply shortfalls can have large economic and public health consequences. An empirical analysis of these two events demonstrates that similar supply shortfalls are likely to occur in the future without a paradigm shift in how long-term resource adequacy is determined for an electricity supply industry with significant intermittent renewables. An alternative approach to determining long-term resource adequacy that explicitly recognizes the characteristics of different generation technologies is outlined and its properties explored relative to current approaches.

Suggested Citation

  • Frank A. Wolak, 2022. "Long-Term Resource Adequacy in Wholesale Electricity Markets with Significant Intermittent Renewables," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 3(1), pages 155-220.
    • Handle: RePEc:ucp:epolec:doi:10.1086/717221
    DOI: 10.1086/717221
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    Cited by:

    1. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    2. Shu, Han & Mays, Jacob, 2023. "Beyond capacity: Contractual form in electricity reliability obligations," Energy Economics, Elsevier, vol. 126(C).
    3. Anwar, Muhammad Bashar & Guo, Nongchao & Sun, Yinong & Frew, Bethany, 2024. "Can wholesale electricity markets achieve resource adequacy and high clean energy generation targets in the presence of self-interested actors?," Applied Energy, Elsevier, vol. 359(C).
    4. Simshauser, Paul, 2024. "On static vs. dynamic line ratings in renewable energy zones," Energy Economics, Elsevier, vol. 129(C).
    5. Triolo, Ryan C. & Rajagopal, Ram & Wolak, Frank A. & de Chalendar, Jacques A., 2023. "Estimating cooling demand flexibility in a district energy system using temperature set point changes from selected buildings," Applied Energy, Elsevier, vol. 336(C).
    6. Brown, David P. & Sappington, David E. M., 2022. "The Impact of Wholesale Price Caps on Forward Contracting," Working Papers 2022-12, University of Alberta, Department of Economics.
    7. Newbery, David M., 2023. "High renewable electricity penetration: Marginal curtailment and market failure under “subsidy-free” entry," Energy Economics, Elsevier, vol. 126(C).
    8. Keskar, Aditya & Galik, Christopher & Johnson, Jeremiah X., 2023. "Planning for winter peaking power systems in the United States," Energy Policy, Elsevier, vol. 173(C).
    9. Dimanchev, Emil & Gabriel, Steven A. & Reichenberg, Lina & Korpås, Magnus, 2024. "Consequences of the missing risk market problem for power system emissions," Energy Economics, Elsevier, vol. 136(C).
    10. Lebeau, Alexis & Petitet, Marie & Quemin, Simon & Saguan, Marcelo, 2024. "Long-term issues with the Energy-Only Market design in the context of deep decarbonization," Energy Economics, Elsevier, vol. 132(C).
    11. Farhad Billimoria & Paul Simshauser, 2023. "Contract design for storage in hybrid electricity markets," Working Papers EPRG2304, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    12. Billimoria, Farhad & Fele, Filiberto & Savelli, Iacopo & Morstyn, Thomas & McCulloch, Malcolm, 2022. "An insurance mechanism for electricity reliability differentiation under deep decarbonization," Applied Energy, Elsevier, vol. 321(C).
    13. Ali Darudi & Hannes Weigt, 2024. "Review and Assessment of Decarbonized Future Electricity Markets," Energies, MDPI, vol. 17(18), pages 1-38, September.
    14. Barbosa, Maria de Fatima & Street, Alexandre & Fanzeres, Bruno, 2024. "A Tailored Derivative Instrument to Mitigate the Price-and-Quantity Risk Faced by Wind Power Companies," Energy Economics, Elsevier, vol. 136(C).

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