This dissertation examines topics related to renewable energy development and investment planning, energy markets, environment degradation and economic development. The substantial ecological costs of deforestation are well known and considered globally important due to biodiversity loss, land degradation, soil erosion, and contributions to climate change. The first essay focuses upon understanding the tradeoff between development and deforestation in Africa. In the second essay, spatial analysis and Geographic Information System (GIS) are applied to determine potential locations for wind farms development in the state of West Virginia. Lastly, the third essay examines the role of wind power penetration on wholesale electricity market.
The first essay explores the relationship between economic growth and deforestation in African countries. During the past half-century, the continent of Africa has suffered massive losses of forested areas due to the changing structure of economies, increasing population, and expanding globalization. This research examines statistical evidence for the Environmental Kuznets Curve (EKC) hypothesis as applied to deforestation occurring within Africa from 1990 to 2016. Changes in forest cover data are explained with Generalized Method of Moments (GMM) estimators to overcome the endogeneity problems arising from reverse causality between deforestation and explanatory variables. The empirical results of a panel GMM confirm the EKC hypothesis is valid for deforestation in Africa with a turning point estimated to be US 3,000.Heterogenouspanelnon−causalityfindingssuggestthatAfricacoulddeterandreversedeforestationthroughappropriateland−useandforestproductstradepolicies,andtheconsequencesofthesepolicieswouldnotimpacttheireconomicgrowth.Inthesecondessay,amulti−criteriadecisionanalysisemployingAnalyticHierarchyProcess(AHP)andGISareusedforassessmentofpotentialsitesforfutureutility−scalewindfarmsinWestVirginia.Worldwide,demandisincreasingforrenewableenergy.Whilewindpowerisaproven,sustainableenergysource,sitingcanbechallenging.Identifyingpotentialsitesforwindturbinesisasignificantstepinrenewableenergyresourceplanning.Windturbinesitesuitabilityisprimarilydependentuponwindspeedatalocationalongwithotherenvironmental,social,andeconomicfactors.Itiscriticaltoarriveatarobustwindfarmdecisiontoimprovepublicacceptance,preservetheenvironment,andmaintainpristinehabitats.Thisresearchbuildsuponpreviousstudiesandcontributestotheliteraturebyincorporatingtwoimportantcomponentsintositing:(1)inclusionofcriticalwildlifehabitatforbirdsandbatsasaneliminationcriterionwithintheAHP,and(2)theparticipationbywindpowerexpertsintheAHPdecision−makingprocess.Byincorporatingexpertopinionswiththeweighingoftensitingfactors,about70,000hectaresoflandareidentifiedas2˘7highlysuitable2˘7forwindpowerdevelopmentthroughoutthestateofWestVirginia.Thisarearepresentsthepotentialtoyieldanestimated29,000MWoffutureutility−scalewindpowercapacity,whichislargerthanthecurrentcoaldominatedelectricitygenerationcapacityinWestVirginia.Thethirdessayexaminesthewindpowerpenetrationimpactsonwholesaleelectricitymarkets.Usingdatafromtwowholesaleelectricitymarkets(Pennsylvania–NewJersey–Maryland(PJM)andElectricReliabilityCouncilofTexas(ERCOT)),fourenergypolicyquestionsareaddressed:(1)Howmuchdoeswindpowerintegrationimpactwholesaleelectricitypricesunderdifferentmarkets?(2)Doesthemerit−ordereffect(MOE)existatdifferentquantilesofwholesaleelectricityprices?(3)Whatdrivestheday−aheadmarket(DAM)andreal−timemarket(RTM)pricesatdifferentmarketconditionsinbothmarkets?(4)Doestheincreasingpenetrationofwindpowerundermineitsmarketvaluealongwiththemarketvaluesofothergeneratingtechnologies?Toanswerthesequestions,quantileregressionisusedtoobtaincoefficientestimatesthatindicatewindpenetrationhasunequalimpactsonwholesaleelectricitypricesandmarketvaluesacrossquantiles,reinforcingtheneedforthistypeofanalysis.Theempiricalanalysesconfirmedtheexistenceofthemerit−ordereffectacrossdifferentquantilesoftheconditionaldistributionofwholesalepricesforbothDAMandRTM,implyingthattheincreasingdeploymentofwindpowerforelectricitygenerationsignificantlysuppressesthewholesaleelectricitypricesinthePJMmarket.ContrarytothePJMestimations,merit−ordereffectsareconfirmedacrossquantilesofwholesalepricesforonlytheDAMintheERCOTmarket.Furthermore,thefindingsshowthataswindgenerationexpandswithinthemarket,therevenueearnedbywindpowerproducersreducesacrossallquantilesoftheconditionaldistributionofitsunitrevenue.Specifically,eachadditionalGWhincreaseinelectricityfromwindisassociatedwithafallinitsunitrevenuesacrossquantilesbyanamountthatrangesfromapproximately0.01/MWh to 0.06/MWh.Resultsalsoconfirmcross−cannibalizationimpactssuchthateachadditionalGWhincreasefromwindisassociatedwithdecreasedgasandbaseloadunitrevenuesacrossallquantilesrangingfrom0.02/MWh to $0.06/MWh. Contrary to unit revenue results, there is weak evidence of increasing wind supply\u27s cannibalization effect for value factor as positive impacts occur below the 90% quantile and negative impacts occur at quantiles 90% and greater. The negative impacts of wind power on gas and baseload generators demonstrate the need for corrective policies