Originally published on the Lenz Blog.
David Roberts discusses the question if there are any economic limits for solar and wind grid penetration.
In that article he discusses a “rule of thumb” recently developed by Jesse Jenkins and Alex Trembarth, authors working with the “Breakthrough Institute”. Their rule of thumb is that maximum grid penetration is equal to capacity factor.
That doesn’t make any sense at all, so I passed on discussing it at the time. But since Roberts seems to take it seriously, here are a couple of problems with that line of thinking.
For one, capacity factors of solar and wind are different. the American government “Energy Information Administration” gives 33.9% for wind and 27.8% for solar in 2014.
But both are variable sources and the arguments for this rule of thumb should apply for both in the same way.
If there is some reason why it makes economic sense to limit solar and wind to 30% each, it can’t be caused by the capacity factors, since these are different.
The other argument that does not make sense is the idea that solar and wind are too cheap.
I for one am happy to have anti-renewable voices change their talking points. Since they can’t with a straight face keep complaining that solar and wind are too expensive, they need to come up with a way to somehow make falling prices look bad.
It is true that this may be bad if you base your market design on merit order. That does not mean, however, that solar and wind are limited to 60%. It only means that in a system with so much variable sources, you will need to find some other way of making sure that people get paid a fair price for the electricity they provide. I have made a proposal for that here.
Also, one obvious countermeasure is to have larger grids and more long distance power lines. The larger your grid area is, the less variation is in your power supply from wind and solar. That’s one reason to have projects like Desertec. The other one is that it makes sense to have solar projects where the sun shines.
Anyway, it will still take a couple of years for wind and solar alone to get over 60 percent in most grids. Until such time, this is only a theoretical question.
It would actually be a nice problem to have. Over 60 percent wind and solar, and having to worry about the fact that these are too cheap. I for one am looking forward to that.
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