Long-Term Resource Adequacy in Wholesale Electricity Markets with Significant Intermittent Renewables
Growing amounts of intermittent renewable generation capacity substantially increases the complexity of determining whether sufficient energy will be available to meet hourly demands throughout the year. As the events of August 2020 in California and February 2021 in Texas demonstrate, supply shortfalls can have large economic and public health consequences. An empirical analysis of these two events demonstrates that similar supply shortfalls are likely to occur in the future without a paradigm shift in how long-term resource adequacy is determined for an electricity supply industry with significant intermittent renewables. An alternative approach to determining long-term resource adequacy that explicitly recognizes the characteristics of different generation technologies is outlined and its properties explored relative to current approaches.
Financial support provided by the Sloan Foundation. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Forthcoming: Long-Term Resource Adequacy in Wholesale Electricity Markets with Significant Intermittent Renewables, Frank A. Wolak. in Environmental and Energy Policy and the Economy, volume 3, Kotchen, Deryugina, and Stock. 2021