Economics of 100% renewable power systems

TL;DR

This paper investigates the economic factors influencing 100% renewable power systems, revealing that the largest demand-generation mismatch and hybrid renewable-storage systems are key to system feasibility.

Contribution

It introduces a simple model linking demand-supply mismatch to optimal capacities and applies microeconomic theory to quantify technology costs and system trade-offs.

Findings

Mismatch bottleneck determines capacity and storage needs.

Hybrid systems with multiple renewables and storage are essential.

Quantitative relationships between costs, capacities, and total system cost.

Abstract

Studies have evaluated the economic feasibility of 100% renewable power systems using the optimization approach, but the mechanisms determining the results remain poorly understood. Based on a simple but essential model, this study found that the bottleneck formed by the largest mismatch between demand and power generation profiles determines the optimal capacities of generation and storage and their trade-off relationship. Applying microeconomic theory, particularly the duality of quantity and value, this study comprehensively quantified the relationships among the factor cost of technologies, their optimal capacities, and total system cost. Using actual profile data for multiple years/regions in Japan, this study demonstrated that hybrid systems comprising cost-competitive multiple renewable energy sources and different types of storage are critical for the economic feasibility of any profile.