A Minimal System Cost Minimization Model for Variable Renewable Energy Integration: Application to France and Comparison to Mean-Variance Analysis

The viability of Variable Renewable Energy (VRE)-investment strategies depends on the response dispatchable producers to satisfy net load. We lack a simple research tool with sufficient complexity represent major phenomena associated integration high shares VRE and their impact system costs. develop minimization cost allowing one quantify decompose value depending an aggregate production. Defining variable generation as quadratic coefficient macroeconomic factors such greenhouse gas emissions leads simplest version model. In absence curtailment, for particular parameter values, this is equivalent mean-variance problem. apply model France solar wind capacities distributed over administrative regions metropolitan France. case, ignoring wholesale price effect variability has relatively small optimal investments, but largely underestimating total overestimating marginal cost.