Measuring Renewable Energy as Baseload Power Student Research Report
- Working Paper
To support the movement towards decarbonization, is it pertinent to consider the economics surrounding the transition to a power industry based on variable renewable energy (VREs), defined in this study as solar and wind.
On September 12, 2017, Hillsborough became the first town in North Carolina to commit to 100% renewable energy, joining 43 other U.S. localities in making the pledge. In addition, the RE 100 has fostered commitments from 116 corporations, while over 1,100 individual businesses have pledged to maintain commitments under the Paris Climate Accord. However, questions remain about how these entities can accomplish 100% renewable energy goals and the full economics of such goals.
This study, sponsored by the Frank Hawkins Kenan Institute of Private Enterprise and the Kenan-Flagler Energy Center, analyzes the economic cost of renewable energy’s ‘last frontier’, providing reliable baseload power. The analysis utilizes five financial and energy models to examine the cost of replacing baseload power with various energy sources to achieve fully decarbonized utility scale electricity generation:
- Natural Gas Combined Cycle Plant (NGCC) – Reference Case
- NGCC and Universal Solar Power – Partial Decarbonization
- Universal Solar Power and Battery Storage – Full Decarbonization
- Universal Wind Power and Battery Storage – Full Decarbonization
- Universal Solar and Wind Power and Battery Storage – Full Decarbonization
While similar studies on reaching 100% renewable energy have been authored, the purpose of our research is to form reasonable debates today around the cost of solar and wind profiles matching a reliable baseload profile, and the following themes implicated in the study:
- The capital intensity of resources with lower capacity factors, requiring large overbuilds
- Optimizing for resource generation vs. storage in today’s economic conditions
- The role of a cost of carbon in moving towards a fully decarbonized generating portfolio
- How complimentary generating profiles and resource location mitigate CAPEX and cost of carbon
- Baseload power defined today vs. an outlook of baseload power