Advocates of non-conventional renewable energies (NCRE or renewables) claim that, by increasing electricity generation from these sources in replacement of fossil fuel-based generation, electricity prices must drop since the investment costs of these technologies have sharply dropped over the last decade and because the fuel cost of sun and wind generation is zero. Likewise, CO2 emissions must also drop for renewables don’t burn fossil fuels.
Although true, these statements lead to false conclusions because they assume renewables as isolated entities that don’t affect the operation (operating heat rates and, thus, CO2 output emission rates) of other generation sources involving a power grid, therefore, insufficient to explain by themselves how the grid (full) cost of electricity and CO2 emissions change when increasing the renewable generation fraction in such an interconnected system.
This presentation shows the rational path to estimate how electricity costs and CO2 emissions actually evolve when a power grid is subjected to an increasing fraction of wind and solar generation. Derived from the above, it also establishes whether or not there is a maximum limit for renewables on a grid and what happens with CO2 emissions when replacing coal-fired generation with intermittent generation sources.