Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Daily Overview |
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Energy: Electric Power Systems Location: B005 Session Chair: Xiao Jia, Toyo University | |
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Hydro and Wind Power: Complements or Substitutes? 1: Columbia University, USA; 2: Arizona University, USA; 3: Oulu Business School, Finland Intermittency of generation is a well known challenge associated with renewable energy. This paper examines interactions between renewable energy and hydroelectric generation in electricity systems with substantial hydro resources. Many hydro systems have significant energy storage capability. This energy storage may be used to modulate renewable intermittency and reduce the cost of wind integration. Our analysis extends the analysis of Gowrisankaran et al. [2016] and Butters et al. [2024] to a dynamic setting that allows for hydro power. We estimate a seemingly unrelated regression model for weather and use its forecasts and error distributions to understand optimal hydroelectricity usage in high-renewable settings. We apply the analysis to the Finland electricity market, a market with substantial hydro resources, and run counterfactual experiments with increases in wind and hydro capacity. We find that the cost of CO2 emissions reduction via wind expansion is quite low for a 50% wind capacity expansion, but rises sharply for an additional 50% wind capacity expansion. We also report on counterfactuals in which the size of the hydro system is re-scaled up and down. We find complementarity between wind and hydro for the first increment of wind expansion. Hydro storage capabilities enhance the marginal value of wind in this case. However, optimized hydro power usage behaves like a competitor to wind power as wind power capacity is further increased, so that wind and hydro act as substitutes. Hydro power has a context dependent role as a complement or a substitute for other renewable energy resources. | |