Value chain · CLM-0309
In plain terms
One influential academic paper shows that once you add in the extra cost a variable power source creates for the rest of the grid, its true cost to the system can end up roughly double its own sticker price at high market share.
The claim as recorded
Ueckerdt, Hirth, Luderer and Edenhofer define system LCOE as plant-level LCOE plus profile costs, balancing costs and grid costs, and find that wind's profile costs reach about 30 EUR/MWh at a 30% wind share and integration costs reach 60 EUR/MWh at a 40% share, which the paper states equals "the typical current wind LCOE in Germany" at that time, i.e. system LCOE roughly doubling plant-level LCOE at high penetration in their most extreme case.
Scope and limits
This is a cost mechanism built specifically for variable generators; it does not describe what a firm generator like SBSP would incur, and applying it to SBSP would require assuming SBSP is the one causing these costs, which contradicts SBSP's own firmness claim. The other estimates the paper lists are rescaled to a common 70 EUR/MWh electricity price, one is by the paper's own second author, and one is a share of peak-load capacity rather than of energy, so they are not independent, like-for-like corroboration.
What it assumes
German wind cost and penetration data as available in 2013; the paper's own system-cost decomposition model.
Where it comes from
p.71 (PDF p.11): "Profile costs reach about 30 EUR/MWh at a wind share of 30%." "At a wind share of 40% integration costs reach 60 EUR/MWh which equals the typical current wind LCOE in Germany." (The source prints the euro sign.) The same paragraph compares other profile-cost estimates, for which "all literature values were normalized to an annual load-weighted electricity price of 70 EUR/MWh": Mills and Wiser, 15-30 EUR/MWh for California at wind penetrations of 30-40%; an estimate by the paper's own second author (its reference [43]) of 14-35 EUR/MWh at 30% penetration for North-Western Europe; Hirst and Hild, up to about 50 EUR/MWh "at 60% capacity share (of peak load)"; a study cited as reference [14], 20-40 EUR/MWh "at 40% wind penetration of total generation"; and a survey of about 30 studies giving 15-25 EUR/MWh at 30% penetration.
Basis: EUR, basis year not stated in the extracted text
Related records
- Answers question
- QST-021 not published in this release
Cite this
energyaperture.com/c/clm-0309
CLM-0309, Energy Aperture, as of 2013-10.