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Long Distance Transmission and the Economics of Large-Scale Wind Power
With generation costs that can be less than 4,/kWh, wind provides a competitive option to fossil fuel electricity generation. Yet the intermittancy and geographic distribution of wind resources present formidable problems that add significantly to the real cost of electricity from wind. In power systems where wind turbines represent a significant fraction of the generation capactiy, the spatial correlation of intermittent wind resources forces an intrinsic tradeoff between installing dispatcable storage/backup capacity and distributing the wind turbines over a larger geographical area in order to reduce the variance of power output and meet sepcified reliability standards. Previous work has focused on the economics of wind generation in isolation or with storage or backup generation for small turbine arrays. Here we explore the role of long-distance transmission and dispatcable backup capacity in determining the economic viability of wind systems in the range of tens to hundreds of gigawatts. In the case of wind, we explore how transmission can be used to mitigate the problem of intermittent supply. The analysis has more general applicability. There is a general tradeoff between transmission and new generation capacity, and the same approach can be used to address the problem of variation in demand by aggregating imperfectly correlated demands. WIth impending legislation to reduce greenhouse gas emissions and the recognition of wind as a competitive alternative, this paper begins to address the real cost of large-scale wind power development.

Contact: David Keith, Joe DeCarolis

Related Publications: Science Magazine Debate on Wind Energy

Electricity and Conflict: An Evaluation of Distributed Co-Generation as a Reliable Solution
Electric power systems must sometimes be developed and maintained under adverse conditions. The historical record of the conflicts in Bosnia-Herzegovina and Lebanon indicates the need to consider deliberate attacks when planning electric power systems in areas with the potential for violent conflict. Research on the Palestinian electricity sector further indicates the need to consider the security situation when planning maintenance and expansion of electric power systems. The purpose of this research is to determine whether electric power systems that include significant distributed generation are more robust under adverse conditions and how the relative economics of centralized versus distributed generation change when the survivability of the system is introduced as an important attribute of the system. It is hypothesized that a distributed system based primarily upon natural gas cogeneration facilities will be more robust under these adverse conditions. Distributed generation, by placing a much larger number of generators close to the demand load, would mitigate against two problems with centralized electricity generation. First, there would be less reliance on a small number of large generators so that when a generator is damaged, a much smaller proportion of the generating capacity is unavailable. Second, even if large generators can be defended, the transmission and distribution system largely cannot, and therefore, by reducing reliance on the T&D portion of the electric grid, distributed generation would result in a continuation of some electricity service.

Contact: Hisham Zerriffi, Alex Farrell 
Related CEIC Working Papers and other publications

Load Shifting Technologies in Deregulated Electricity Marketplace
In the deregulated electricity marketplace customers will likely encounter a huge variety of electricity rates and the daily price variability in these rates is going to be much higher than the customers ever faced before. The reason for this forecast is that the wholesale market prices are more volatile than the generation costs. The retailing utilities will likely demand more risk-sharing from the customers. Second, having customers with smooth load curves becomes a key to the utility's competitiveness. To induce the customers to smoothen the load the future rates will likely be designed to provide high incentives for peak load reduction or shifting. The current research project aims to the welfare analysis of the existing technologies that allow shifting the electricity load and thus hedging against the electricity rate time-of-use variability, their effect on the consumer, transmission and distribution utilities and generators. Special attention will be paid to the technologies of thermal energy storage as one of the cheapest existing ways of storing electricity.

Contact: Lester Lave

Assessment of distributed (co)generation (DG)
Distributed (co)generation (DG) has the potential to revolutionize the generation and distribution of electricity. DG technologies can significantly reduce costs, increase power quality and reliability and lower emissions of greenhouse gases. DG also has the potential to disrupt current generation activities, lower power quality and reliability, increase air pollution, and impose heavy costs on electricity industry participants. A series of DG research projects are ongoing, including: · System architecture modeling of DG vs. conventional generation and delivery, focusing on path dependent transitional issues in any large-scale evolution to a DG infrastructure. · Analysis of regulatory/institutional issues for DG market evolution, including utility/user partnerships, investment decision criteria and network externalities. · Implications of DG for pollutant emissions (CO2, SO2, NOx, CO, PM10, HC). · Reliability implications of DG, particularly for an electricity system under stress. 

Contact: Neil Strachan, Alex Farrell
Related CEIC Working Papers and other publications

Multi-Jurisdictional Emissions Trading: Political Economy And Industry Response
We are evaluating multi-jurisdictional emissions trading among firms whose operations and markets may cross the boundaries between jurisdictions. We will study three issues in particular; the political economy of the creating an emissions trading regime among multiple jurisdictions, the costs of such a program, and its effect on the regulated industry, especially in terms of emissions, competitiveness, and technological change. The case we are using is the first multi-jurisdictional emissions trading regime to be implemented, the “OTC NOx Budget” now in place in the northeastern United States. This program was created through the development of independent, but coordinated state-level legislation, and affects over 400 facilities, most of which are electricity generation plants. This project is funded by the U.S. Environmental Protection Agency.

Contact: Alex Farrell
Related CEIC Working Papers and other publications