Valuing infrastructure investments to reduce curtailment

Abstract Curtailment due to high penetrations of variable renewable (VR) capacity leads to increased costs borne by the electricity system. These curtailment costs can be implicitly included as integration costs in long term models but to date have not been included in short or medium term models in the literature. We implement curtailment cost tracking into a medium term version of the OSeMOSYS linear programming model and show how the inclusion of curtailment costs adds to the value proposition when considering infrastructure investments to reduce curtailment. Infrastructure investments such as storage and dispatchable load technologies are considered for a system with high wind penetration. We find that including curtailment costs in the value of storage and dispatchable loads adds significantly to the value of that infrastructure to the system, depending on the curtailment cost and the penetration level of wind power. Ignoring curtailment costs potentially under-values investments to reduce curtailment. No other works compare the value of curtailment to investment in storage or dispatchable load technologies.