Effect of cost reduction in power sources on large-scale penetration of wind and solar power in Hokkaido

This study focuses on the power supply system of Hokkaido, the largest and northernmost prefecture in Japan and identifies the barriers to raise the share of wind and solar power to 100%. An increase in total system cost versus the penetration of wind and solar power into the energy system was examined based on the current technology and cost level. The effect of cost reductions in solar power and batteries are also investigated. The results show that the share of wind and solar power can be raised to 50% without significant increase in the total system cost. To achieve this, wind power should mainly be installed in the northern area and transmission lines should be enhanced to connect the northern and capital areas. However, the profitability of non-renewable power decreases with increasing wind power capacity. As the share of renewables exceeds 50%, the total system cost rapidly increases because of a widening of the demand-supply gap. Reducing the cost of solar power can reduce the total system cost to some extent. However, the main power source is still wind energy because the seasonal pattern of wind power output is in higher correlation with demand than solar power.