Solar and wind grid system value in the United States: The effect of transmission congestion, generation profiles, and curtailment

The value of electricity generated from wind and solar sources declines as supply increases. This decline in value has varied over time and across regions, indicating that strategies to mitigate value decline will need to be carefully targeted. To help guide development of these strategies, we empirically determine wind and solar value at similar to 2,100 plants within United States wholesale markets by using local prices and plant-specific generation profiles. We determine how each plant loses (or gains) value because of its output profile, transmission congestion, and curtailment. In regions where wind or solar account for roughly 20% of electricity generation, its value is 30% to 40% below the regional average value of a flat output profile at all plants. Solar value reductions are most sensitive to output profile and wind value reductions are sensitive to both profile and congestion, region dependent. Curtailment was not a major source of value reduction.

Automated summary

The value of electricity generated from wind and solar sources decreases as supply increases, varying over time and across regions. Strategies to mitigate this value decline need to be carefully targeted, with factors like output profile, transmission congestion, and curtailment influencing the value. In regions where wind or solar contribute approximately 20% of electricity generation, their value can be 30% to 40% lower than the regional average value of a flat output profile.