Abstract

In the environmentally sensitive scenario we estimate the potential production of a hybrid wind-solar-fossil fuel system that uses 100 % of the wind and solar potential, while ensuring grid stability, in order to minimize environmental emissions. Maximising the use of renewable energies requires storage systems to deal with the fluctuating nature of such power production in order to ensure a reliable and stable grid. Our study finds that introducing the maximal extent of potential solar and wind power production, along with modification of Compressed Air Energy Storage (CAES) for gas turbines, reduces CO2 emissions by 4.28 million tons and increases the cost of production ten times over the current production structure of the Khorasan Ragional Electricity Co. It is thus clear that adoption of this environmentally optimal scenario requires substantial financial support of the government plus localization of renewable technology to reduce the cost of production. We also find that increasing the capacity of CAES from 50 to 100 MW produces the outcome with the highest reduction in prices, the lowest increase in environmental emissions and the highest rate of growth of net income. We thus find a CAES capacity of 100 MW to be the optimal starting point for moving towards an environmentally sensitive electricity production system.

JEL Classification: N7، O13، P28، Q42.