Effect of real-time electricity pricing on renewable generators and system emissions
Name
255602571-MIT.pdf
Description
Full printable version
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12.49 MB
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Author(s)
Connolly, Jeremiah P. (Jeremiah Peter)
Advisor(s)
Stephen Connors.
Date Issued
2008
Publisher
Massachusetts Institute of Technology
Abstract
Real-time retail pricing (RTP) of electricity, in which the retail price is allowed to vary with very little time delay in response to changes in the marginal cost of generation, offers expected short-run and long-run benefits at the societal level. While the effects of RTP on most market participants have been examined previously, its effects on a) renewable generator revenues and b) power sector emissions are not well understood. This thesis presents a counterfactual model of the new England wholesale power market, including within-hour consumer price response, to analyze revenues under RTP for four renewable test cases and emissions of CO2, SO2, and NOx. Assuming a moderate consumer price-response ( e = -0.3), I find that revenues for both wind and solar cases will decrease by about 3%, a smaller loss than that expected by the generation sector as a whole (~ 6%) or by peak generators ( ~ 55%). In the same scenario, RTP is expected to decrease emissions of CO2, SO2, and NOx by 2-3% in the short-run. These results are qualitatively robust across a range of elasticities and other input parameters. A discussion of the political barriers to RTP highlights interest group pressure from peak generators and the framing of gains and losses for consumers. These barriers are likely to attract significant policymaker attention in RTP discussions, but the results of my empirical analysis show the need to also consider how RTP may interfere with the ability to achieve other policy objectives, including promoting renewable energy and reducing emissions.
Description
Thesis (S.M. in Technology and Policy)--Massachusetts Institute of Technology, Engineering Systems Division, Technology and Policy Program, 2008.
This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.
Includes bibliographical references (p. 127-130).
Subjects
Technology and Policy Program.
Engineering Systems Division.
MIT Department
Massachusetts Institute of Technology. Engineering Systems Division
Technology and Policy Program
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