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This is the result of an optimal generation mix analysis with of course quite a few assumptions. The most signficant observation is that at the range of $25 to $50 per ton for CO2 cost, there would be a rapid shift of the generation mix. The ability of wind and solar energy to enter this market will depend on whether they can provide firm capacity. If large amount of storage (of the order of 100 hours or more) can be combined with intermittent wind and solar resources, the resulting virtual power plant will have firm capacity to ride through several days of adverse weather. The graph shows that if such a virtual power plant can be built at the cost of $5000/kW, it can penetrate up to 40% of the ultimate generation market.

Generation Mix vs CO2 Cost with Oil Price at $60/bbl

 
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