Price vs. risk – the effect of wind generation on modern electricity systems. ESRI Research Bulletin 2015/3/3

Lynch, Muireann A. and Curtis, John (2015) Price vs. risk – the effect of wind generation on modern electricity systems. ESRI Research Bulletin 2015/3/3. UNSPECIFIED.

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Abstract

Renewable generation, such as wind or solar generation, has expanded rapidly in modern electricity systems. This is due largely to government-mandated targets. These targets are justified under the rationale that renewable generation reduces costs, decreases carbon emissions and mitigates against a dependency on imports of fossil fuels, such as oil, natural gas and coal. However, much of the analysis undertaken regarding the effects of renewable generation on electricity systems is severely limited. This is because the complex interactions of renewable generation with fossil fuel generation is difficult to model, and must take account of fuel prices, electricity demand and the weather, none of which can be known with certainty. Analyses of the effect of renewable generation are therefore often performed for a limited number of scenarios (e.g. a high, medium and low fuel price scenario, or high, medium and low demand). The results are heavily dependent on the inputs chosen and usually do not provide any insight into the impact of extreme events. For example, what would be the impact of an unusually cold winter, leading to high electricity demand, along with low levels of wind generation and high gas prices? Furthermore, models that only run two or three demand or fuel price scenarios cannot provide any information on the likelihood of each of the scenarios and their associated outcomes.

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