Adding Photovoltaics to the Saudi Power System

Key Points:

Intermittent generation from wind or photovoltaics (PV) imposes a cost on the power systems in which they are deployed. These costs vary regionally due to different fuel costs and ramping flexibility of existing grid capacities. With 2015 as a reference year, we examine the costs of PV intermittency and costs of integration to power utilities in Saudi Arabia, using a least-cost approach for the power utilities. The operational facets of PV integration to grid operators will be more pronounced with higher PV penetration, so, to focus on system operation, we exclude the capital costs. The excess of the price paid to new PV generators over the current average consumer tariff would also have to be covered by the utility, and will depend on the details of the power purchase contracts.

We developed the KAPSARC Energy Model (KEM) for Saudi Arabia to understand the dynamics of the country’s energy system. It is a partial equilibrium model formulated as a mixed complementarity problem to capture the administered prices that permeate the local economy. KEM for Saudi Arabia has been previously used to study the impacts of various industrial fuel pricing policies, improved residential energy efficiency on the energy economy, and the feasibility of installing coal-fired power plants in Saudi Arabia. In the present paper, we use it to assess the intermittency and integration costs of photovoltaics in the Saudi power system. Ongoing work revolves around CO2 emissions in the cement industry in KEM for Saudi Arabia, and generalizing the main results of this paper.