Economic Analysis of Large-Scale Renewable Energy (RE) Source Investment Incorporating Power System Transmission Costs

Abstract

Recently, the proportion of renewable energy (RE) sources in a power system has been increasing worldwide to reduce carbon emissions. To effectively accommodate renewable energy, there is a growing need to develop integrated planning strategies for both renewable energy sources and transmission lines in a power system, taking into account the location-specific characteristics of renewable energy. Economically viable and rapid system expansion plans are required to resolve the problem of delayed integration of renewable energy into existing power system, which arises due to inadequate transmission facilities. To address these problems, this paper presents an integrated economic evaluation method that considers the inherently uncertain output characteristics of renewable energy, contingent on location, the costs associated with installing transmission lines, and environmental benefits. The case study is conducted using a modified power system in Korea. In the case study, it is assumed that by integrating solar power generators in a low-demand area and wind power generators in a high-demand area, wind power plants have higher construction costs than solar power generators. However, the transmission costs for wind power plants are lower than those for solar power generators due to the regional characteristics of the power grid in the installation areas because renewable energy in high-demand areas typically requires less additional power infrastructure than in low-demand areas. The results of this study show that the net benefit for the wind power plant is estimated at USD 225.4 M, while the solar power plant yields a net benefit of USD 22.9 M in the example system. These results demonstrate the effectiveness of the proposed method, underscoring its potential to mitigate the challenges faced in the practical implementation of renewable energy projects.