Work

Real-Time Pricing and the Cost of Clean Power

Year: 2024

Type: article

Abstract: Solar and wind power are now cheaper than fossil fuels but are intermittent. The extra supply-side variability implies growing benefits of using real-time retail pricing (RTP). We evaluate the potential gains of RTP using a model that jointly solves investment, supply, storage, and demand to obtain a chronologically detailed dynamic equilibrium for the island of Oahu, Hawai‘i. We find that, holding demand assumptions fixed, RTP reduces costs in high-renewable systems by roughly 6 to 12 times as much as in fossil systems, markedly lowering the cost of clean energy integration. (JEL G31, L94, L98, Q42, Q48)

Source: American Economic Journal Economic Policy

DOI: 10.1257/pol.20220506

Authors: Imelda, Matthias Fripp, Michael J. Roberts

Institutions: Graduate Institute of International and Development Studies, Environmental Defense Fund, University of Hawaiʻi at Mānoa, University of Hawaii System, University of Hawaiʻi Sea Grant

Language: English

Topic: Electric Power System Optimization

Subfield: Electrical and Electronic Engineering

Field: Engineering

Domain: Physical Sciences

SDGs: Affordable and clean energy, Climate action

Open Access status: green

OpenAlex ID: W4403946810

FWCI: 1.026

Cites: 50

Cited by: 12

Related to: 10