A Relative Value Framework: Why Do Different Electricity System Technologies Have Different Economic Value?

Relative competitiveness of electricity system technologies depends on both the total cost and total economic value that technologies are expected to produce; however, estimating value can be highly complex as it is determined by the quantities and prices of multiple grid services and their variations over location and time. In this work we present a framework for evaluating relative value of electricity system technologies that is mathematically complete and generalizable to all grid service requirements. The framework enables relative value for a technology to be decomposed by grid service requirement and then, for each requirement, further decomposed by service quantity, spatial, and temporal components, thereby providing insights into why different technologies have different economic value. A quantitative example is presented to demonstrate the framework and provide a template for evaluation of technologies using real or modeled data.