The Integration Costs of Wind and Solar Power

When a new power plant is constructed, the developer expects to incur costs for planning, building and connecting the unit. However, integrating this unit into the existing power system results in additional costs related to delivering the produced power to the consumer at the precise time it is needed. These costs together are grouped under the term integration cost.

Because power generation from wind and solar photovoltaic (PV) power plants depends on weather conditions and therefore varies over time, the cost of integrating these units into a power system differs substantially from the integration cost of dispatchable power plants. Thus, understanding and being able to estimate the integration cost of variable renewable energy (VRE) (wind and solar PV) is key to determining total economic cost. This then allows for a welfare-optimal generation mix in the process of planning the transition to a decarbonised electricity system.

This course focuses on:

• Grid costs
• Balancing power costs
• Effects on existing power plant utilisation
• Total system cost approach

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