| Author Name | KAINOU Kazunari (Fellow, RIETI) |
|---|---|
| Creation Date/NO. | January 2009 09-J-001 |
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Abstract
Renewable electricity, which has its energy source in renewable energy, is of great importance as a measure for addressing issues such as energy security, socioeconomic sustainability, and climate change; and the effective promotion of its introduction is a major issue in energy and environmental policies.
For some time now, various support systems have been created for renewable electricity, such as the compulsory introduction of a certain ratio by electricity utilities under the Renewable Portfolio Standard (RPS). As the introduction of renewable electricity increases, the cost of the transmission and storage of electricity necessary to adjust supply and demand is also increasing, and this is raising a new policy question in regard to the most efficient way of devising measures to address that adjustment.
In this paper, I model construction costs, site areas, operating ratios and other parameters by type and characteristic of renewable electricity by methods such as applying spatial economics. I estimate how differences in introduction costs arise as a result of the form of the measures taken with regard to the cost of transmission and storage of renewable electricity; and I conduct a comparative analysis of the systems.
As a result, with regard to large-scale renewable power sources it is estimated that the most cost-effective way of minimizing costs is to choose locations where land prices are low, such as forest land in mountainous areas, and to undertake phased development of wind-power generation or reservoir type hydroelectric power generation at bases where total expenses for generation and transmission of electricity are minimal. Accordingly, it would be more sensible to make the cost of transmission and distribution of electricity the subject of measures on the generation side rather than measures on the grid side.
On the other hand, with regard to small-scale distributed renewable electric power sources, especially for solar power generation, I estimate that costs are smaller if the costs for transmission and storage of electricity are addressed by measures on the grid side rather than on the side of users (power generation). This result is derived from an estimate subject to various prerequisites based on current technical and economic knowledge, and I consider it necessary to carry out further multifaceted study when designing systems in the future.
In particular, with regard to small-scale distributed renewable electric power sources such as solar power generation, I consider it necessary to exercise caution regarding restrictions on the development of facilities for electricity transmission and storage under a system of grid-side measures, and regarding problems relating to transitional measures at the time of full liberalization.
