Strategies to mitigate declines in the economic value of wind and solar at high penetration in California

Previously, we quantified a decline in the marginal economic value of wind and PV with increasing penetration levels based on a long-run equilibrium investment and dispatch model that accounted for operational constraints for conventional generation. We use the same model and data, based loosely on California in 2030, to evaluate several options to stem the decline in value of these technologies. The largest increase in the value of wind at high penetration levels comes from increased geographic diversity. The largest increase in the value of PV at high penetration levels comes from assuming that low-cost bulk power storage is an investment option. Other attractive options, particularly at more modest penetration levels, include real-time pricing and technology diversity.