Variability and uncertainty in renewable energy generation has a direct impact on the cost of electricity prices because of the potential impacts on the operation of existing power generating units. The purpose of this paper is to present a case study detailing the variability added to the UC Merced campus load after including a 1-MW photovolataic (PV) plant to supply a significant amount (25–30% of maximum demand) of the energy load. Cost estimates of the required mechanisms to compensate for the variability are calculated based on utility prices and the PV power output fluctuations. The resulting cost estimates are then compared with solar power variability metrics in order to show the economic impacts of solar variability. Additionally, a simulation is performed for a integrated battery storage system to mitigate the PV fluctuations by solving a revenues optimization formulation. The simulated costs are also correlated with three variability metrics including the standard deviation of the fluctuations and the mean absolute values of the fluctuations. In order to extrapolate results from the case study to a more general scenario, we show that the obtained correlations of normalized variables can be useful for providing estimates on the financial impacts of variable generation resources based on more widely available solar irradiance data.

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