[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v152y2021ics030142152100080x.html
   My bibliography  Save this article

The displacement impacts of wind power electricity generation: Costly lessons from Ontario

Author

Listed:
  • Bahramian, Pejman
  • Jenkins, Glenn P.
  • Milne, Frank
Abstract
The displacement impacts of wind power generation on other generation technologies are estimated for Ontario. In addition, their annual financial benefits, costs, and international stakeholder impacts are measured. For every 100 MWh generated, almost 53 MWh of gas output is displaced, and 19 MWh of power is exported. Due to inadequate storage capacity hydro power generation is reduced by 23 MWh. Ontario on average loses about 859 million USD annually from having wind power generation in the system, while the US gains approximately 10 million USD through electricity exported from Ontario. Wind power generation has produced an estimated 109 million USD of benefits by reducing CO2 emissions in the US and Ontario through displacing thermal generation. Comparing the environmental benefits with the net cost to consumers shows the promotion of wind power generation to be largely a waste of Ontario's resources.

Suggested Citation

  • Bahramian, Pejman & Jenkins, Glenn P. & Milne, Frank, 2021. "The displacement impacts of wind power electricity generation: Costly lessons from Ontario," Energy Policy, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:enepol:v:152:y:2021:i:c:s030142152100080x
    DOI: 10.1016/j.enpol.2021.112211
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142152100080X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2021.112211?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Graf, Christoph & Marcantonini, Claudio, 2017. "Renewable energy and its impact on thermal generation," Energy Economics, Elsevier, vol. 66(C), pages 421-430.
    2. Green, Richard & Vasilakos, Nicholas, 2010. "Market behaviour with large amounts of intermittent generation," Energy Policy, Elsevier, vol. 38(7), pages 3211-3220, July.
    3. Benitez, Liliana E. & Benitez, Pablo C. & van Kooten, G. Cornelis, 2008. "The economics of wind power with energy storage," Energy Economics, Elsevier, vol. 30(4), pages 1973-1989, July.
    4. Yatchew, Adonis & Baziliauskas, Andy, 2011. "Ontario feed-in-tariff programs," Energy Policy, Elsevier, vol. 39(7), pages 3885-3893, July.
    5. Nicolosi, Marco, 2010. "Wind power integration and power system flexibility-An empirical analysis of extreme events in Germany under the new negative price regime," Energy Policy, Elsevier, vol. 38(11), pages 7257-7268, November.
    6. Daniel T. Kaffine & Brannin J. McBee & Jozef Lieskovsky, 2013. "Emissions Savings from Wind Power Generation in Texas," The Energy Journal, , vol. 34(1), pages 155-176, January.
    7. Green, Richard & Hu, Helen & Vasilakos, Nicholas, 2011. "Turning the wind into hydrogen: The long-run impact on electricity prices and generating capacity," Energy Policy, Elsevier, vol. 39(7), pages 3992-3998, July.
    8. Forrest, Sam & MacGill, Iain, 2013. "Assessing the impact of wind generation on wholesale prices and generator dispatch in the Australian National Electricity Market," Energy Policy, Elsevier, vol. 59(C), pages 120-132.
    9. Kevin Novan, 2015. "Valuing the Wind: Renewable Energy Policies and Air Pollution Avoided," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 291-326, August.
    10. Richard Green & Nicholas Vasilakos, 2011. "The Long-term Impact of Wind Power on Electricity Prices and Generating Capacity," Discussion Papers 11-09, Department of Economics, University of Birmingham.
    11. Woo, C.K. & Horowitz, I. & Moore, J. & Pacheco, A., 2011. "The impact of wind generation on the electricity spot-market price level and variance: The Texas experience," Energy Policy, Elsevier, vol. 39(7), pages 3939-3944, July.
    12. Ma, Tao & Yang, Hongxing & Lu, Lin & Peng, Jinqing, 2015. "Optimal design of an autonomous solar–wind-pumped storage power supply system," Applied Energy, Elsevier, vol. 160(C), pages 728-736.
    13. Göransson, Lisa & Johnsson, Filip, 2009. "Dispatch modeling of a regional power generation system – Integrating wind power," Renewable Energy, Elsevier, vol. 34(4), pages 1040-1049.
    14. Antweiler, Werner, 2017. "A two-part feed-in-tariff for intermittent electricity generation," Energy Economics, Elsevier, vol. 65(C), pages 458-470.
    15. Cutler, Nicholas J. & Boerema, Nicholas D. & MacGill, Iain F. & Outhred, Hugh R., 2011. "High penetration wind generation impacts on spot prices in the Australian national electricity market," Energy Policy, Elsevier, vol. 39(10), pages 5939-5949, October.
    16. Bell, William Paul & Wild, Phillip & Foster, John & Hewson, Michael, 2017. "Revitalising the wind power induced merit order effect to reduce wholesale and retail electricity prices in Australia," Energy Economics, Elsevier, vol. 67(C), pages 224-241.
    17. Amor, Mourad Ben & Billette de Villemeur, Etienne & Pellat, Marie & Pineau, Pierre-Olivier, 2014. "Influence of wind power on hourly electricity prices and GHG (greenhouse gas) emissions: Evidence that congestion matters from Ontario zonal data," Energy, Elsevier, vol. 66(C), pages 458-469.
    18. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    19. Weigt, Hannes, 2009. "Germany's wind energy: The potential for fossil capacity replacement and cost saving," Applied Energy, Elsevier, vol. 86(10), pages 1857-1863, October.
    20. Amor, Mourad Ben & Billette de Villemeur, Etienne & Pellat, Marie & Pineau, Pierre-Olivier, 2014. "Influence of wind power on hourly electricity prices and GHG emissions: Evidence that congestion matters from Ontario zonal data," MPRA Paper 53630, University Library of Munich, Germany.
    21. Joseph Cullen, 2013. "Measuring the Environmental Benefits of Wind-Generated Electricity," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 107-133, November.
    22. Kenneth Gillingham & James H. Stock, 2018. "The Cost of Reducing Greenhouse Gas Emissions," Journal of Economic Perspectives, American Economic Association, vol. 32(4), pages 53-72, Fall.
    23. G. Cornelis van Kooten, 2016. "The Economics of Wind Power," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 181-205, October.
    24. Sensfuß, Frank & Ragwitz, Mario & Genoese, Massimo, 2008. "The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany," Energy Policy, Elsevier, vol. 36(8), pages 3076-3084, August.
    25. Lamont, Alan D., 2008. "Assessing the long-term system value of intermittent electric generation technologies," Energy Economics, Elsevier, vol. 30(3), pages 1208-1231, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ajanaku, Bolarinwa A. & Collins, Alan R., 2024. "“Comparing merit order effects of wind penetration across wholesale electricity markets”," Renewable Energy, Elsevier, vol. 226(C).
    2. Jiarong Shi & Zihao Jiang & Biao Luo, 2022. "Economic policy, regulatory policy, or soft policy: Which category of policy can effectively improve the green innovation of Chinese wind power industry?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2284-2298, September.
    3. Pejman Bahramian, 2021. "Integration of wind power into an electricity system using pumped-storage: Economic challenges and stakeholder impacts," Working Paper 1478, Economics Department, Queen's University.
    4. Pejman Bahramian & Glenn Jenkins & Frank Milne, 2020. "A stakeholder analysis of investments for wind power electricity generation in Ontario," Working Paper 1442, Economics Department, Queen's University.
    5. Bahramian, Pejman & Jenkins, Glenn P. & Milne, Frank, 2021. "A stakeholder analysis of investments in wind power electricity generation in Ontario," Energy Economics, Elsevier, vol. 103(C).
    6. Jiang, Zihao & Liu, Zhiying, 2022. "Policies and exploitative and exploratory innovations of the wind power industry in China: The role of technological path dependence," Technological Forecasting and Social Change, Elsevier, vol. 177(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Würzburg, Klaas & Labandeira, Xavier & Linares, Pedro, 2013. "Renewable generation and electricity prices: Taking stock and new evidence for Germany and Austria," Energy Economics, Elsevier, vol. 40(S1), pages 159-171.
    2. Concettini, Silvia & Creti, Anna & Gualdi, Stanislao, 2022. "Assessing the regional redistributive effect of renewable power production through a spot market algorithm simulator: The case of Italy," Energy Economics, Elsevier, vol. 114(C).
    3. Hirth, Lion, 2013. "The market value of variable renewables," Energy Economics, Elsevier, vol. 38(C), pages 218-236.
    4. Dillig, Marius & Jung, Manuel & Karl, Jürgen, 2016. "The impact of renewables on electricity prices in Germany – An estimation based on historic spot prices in the years 2011–2013," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 7-15.
    5. Gürtler, Marc & Paulsen, Thomas, 2018. "The effect of wind and solar power forecasts on day-ahead and intraday electricity prices in Germany," Energy Economics, Elsevier, vol. 75(C), pages 150-162.
    6. Bernath, Christiane & Deac, Gerda & Sensfuß, Frank, 2021. "Impact of sector coupling on the market value of renewable energies – A model-based scenario analysis," Applied Energy, Elsevier, vol. 281(C).
    7. Csereklyei, Zsuzsanna & Qu, Songze & Ancev, Tihomir, 2019. "The effect of wind and solar power generation on wholesale electricity prices in Australia," Energy Policy, Elsevier, vol. 131(C), pages 358-369.
    8. Daví-Arderius, Daniel & Sanin, María-Eugenia & Trujillo-Baute, Elisa, 2017. "CO2 content of electricity losses," Energy Policy, Elsevier, vol. 104(C), pages 439-445.
    9. Winkler, Jenny & Gaio, Alberto & Pfluger, Benjamin & Ragwitz, Mario, 2016. "Impact of renewables on electricity markets – Do support schemes matter?," Energy Policy, Elsevier, vol. 93(C), pages 157-167.
    10. Browne, Oliver & Poletti, Stephen & Young, David, 2015. "How does market power affect the impact of large scale wind investment in 'energy only' wholesale electricity markets?," Energy Policy, Elsevier, vol. 87(C), pages 17-27.
    11. Cullen, Joseph A. & Reynolds, Stanley S., 2023. "Market dynamics and investment in the electricity sector," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    12. Bell, William Paul & Wild, Phillip & Foster, John & Hewson, Michael, 2017. "Revitalising the wind power induced merit order effect to reduce wholesale and retail electricity prices in Australia," Energy Economics, Elsevier, vol. 67(C), pages 224-241.
    13. Woo, C.K. & Chen, Y. & Olson, A. & Moore, J. & Schlag, N. & Ong, A. & Ho, T., 2017. "Electricity price behavior and carbon trading: New evidence from California," Applied Energy, Elsevier, vol. 204(C), pages 531-543.
    14. Bent Jesper Christensen & Nabanita Datta Gupta & Paolo Santucci de Magistris, 2021. "Measuring the impact of clean energy production on CO2 abatement in Denmark: Upper bound estimation and forecasting," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 184(1), pages 118-149, January.
    15. Gonçalves, Ricardo & Menezes, Flávio, 2022. "The price impacts of the exit of the Hazelwood coal power plant," Energy Economics, Elsevier, vol. 116(C).
    16. Cludius, Johanna & Hermann, Hauke & Matthes, Felix Chr. & Graichen, Verena, 2014. "The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016: Estimation and distributional implications," Energy Economics, Elsevier, vol. 44(C), pages 302-313.
    17. Antweiler, Werner, 2017. "A two-part feed-in-tariff for intermittent electricity generation," Energy Economics, Elsevier, vol. 65(C), pages 458-470.
    18. Harrison Fell & Daniel T. Kaffine, 2014. "A one-two punch: Joint effects of natural gas abundance and renewables on coal-fired power plants," Working Papers 2014-10, Colorado School of Mines, Division of Economics and Business.
    19. Arjmand, Reza & Rahimiyan, Morteza, 2016. "Impact of spatio-temporal correlation of wind production on clearing outcomes of a competitive pool market," Renewable Energy, Elsevier, vol. 86(C), pages 216-227.
    20. Brancucci Martinez-Anido, Carlo & Brinkman, Greg & Hodge, Bri-Mathias, 2016. "The impact of wind power on electricity prices," Renewable Energy, Elsevier, vol. 94(C), pages 474-487.

    More about this item

    Keywords

    Wind power; Thermal displacement; CO2 emissions; Stakeholder analysis;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:152:y:2021:i:c:s030142152100080x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.