This paper examines the effect of renewable power plant location on electricity transmission congestion levels and system-wide emissions levels in a theoretical model and a simulation study. A new renewable plant takes the effect of congestion on its own output into account, but ignores the effect of its marginal contribution to congestion on output from existing plants, which results in curtailment of renewable power. A model is developed to examine this externality and shows that a social planner installs smaller sized power plants to minimize curtailment than individual profit-maximizing firms would. The model also examines the interaction of the congestion and emissions externalities. In the absence of a price on emissions, taxing congestion usually reduces system-wide emissions, though there are exceptions. Power flow simulations using the modi fied IEEE 30 bus test system reveal that clustering of renewable plants contributes to transmission congestion and that new renewable plants can affect output at existing plants. Regional energy subsidies that incentivize the clustering of renewable plants in particular areas are rendered less effective, since they contribute to renewable power curtailment.


Claudia Hitaj

University of Maryland


18.07.2013 | 12:00 - 13:30

Event Location

ZEW, L 7,1 D-68161 Mannheim