Intermittency or Uncertainty? Impacts of Renewable Energy in Electricity Markets

Arbeitspapier

Renewable energy resources possess unique characteristics—intermittency and uncertainty— that pose challenges to electricity grid operations. We study these characteristics and find that uncertainty, represented by wind forecast error, has larger grid impacts than intermittency, or hourly generation changes. Uncertainty yields roughly double the price effects and roughly double the number of conventional generator start-ups, as compared to perfectly forecast wind. While this finding is important given the persistence of wind forecast error over the study period, reducing wind forecast error to the level of demand forecast error would lower costs by a modest half a million dollars per year.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9902

Classification and Topics

• Classification: Wirtschaft ; Energy: General ; Alternative Energy Sources ; Energy Forecasting
• Subject: renewable energy ; electricity prices and price dispersion ; electricity grid management

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Weber, Paige ; Woerman, Matt
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/265937
• Last update: 10.03.2025, 11:43 AM CET