We estimate the long-run economic value of variable renewable generation with increasing penetration using a unique investment and dispatch model that captures long-run investment decisions while also incorporating detailed operational constraints and hourly time resolution over a full year. High time resolution and the incorporation of operational constraints are important for estimating the economic value of variable generation, as is the use of a modeling framework that accommodates new investment decisions. The model is herein applied with a case study that is loosely based on California in 2030. Increasing amounts of wind, photovoltaics (PV), and concentrating solar power (CSP) with and without thermal energy storage (TES) are added one at a time. The marginal economic value of these renewable energy sources is estimated and then decomposed into capacity value, energy value, day-ahead forecast error cost, and ancillary services. The marginal economic value, as defined here, is primarily based on the combination of avoided capital investment cost and avoided variable fuel and operations and maintenance costs from other power plants in the power system. Though the model only captures a subset of the benefits and costs of renewable energy, it nonetheless provides unique insights into how the value of that subset changes with technology and penetration level. Specifically, in this case study implementation of the model, the marginal economic value of all three solar options is found to exceed the value of a flat-block of power (as well as wind energy) by $20--30/MWh at low penetration levels, largely due to the high capacity value of solar at low penetration. Because the value of CSP per unit of energy is found to be high with or without thermal energy storage at low penetration, we find little apparent incremental value to thermal storage at low solar penetration in the present case study analysis. The marginal economic value of PV and CSP without thermal storage is found to drop considerably (by more than $70/MWh) as the penetration of solar increases toward 30percent on an energy basis. This is due primarily to a steep drop in capacity value followed by a decrease in energy value. In contrast, the value of CSP with thermal storage drops much less dramatically as penetration increases. As a result, at solar penetration levels above 10percent, CSP with thermal storage is found to be considerably more valuable relative to PV and CSP without thermal storage. The marginal economic value of wind is found to be largely driven by energy value, and is lower than solar at low penetration. The marginal economic value of wind drops at a relatively slower rate with penetration, however. As a result, at high penetration, the value of wind can exceed the value of PV and CSP without thermal storage. Though some of these findings may be somewhat unique to the specific case study presented here, the results: (1) highlight the importance of an analysis framework that addresses long-term investment decisions as well as short-term dispatch and operational constraints, (2) can help inform long-term decisions about renewable energy procurement and supporting infrastructure, and (3) point to areas where further research is warranted.

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