Selling Random Energy I
Pravin Varaiya, University of California Berkeley, USA
Abstract:
Many countries are attempting to reduce emissions of greenhouse gases by investing in wind power. Wind power is inherently random, but we are used to 100 percent reliable electricity service. Converting random wind into reliable electricity is quite expensive, so wind power producers require large subsidies to stay in business. We propose an alternative. Let us package random wind power into electricity with different levels of reliability and sell them at different prices. Such an electricity market will reduce subsidies, and it is more efficient than the current market. However, we have to think of electricity differently.