Electricity reform: power generation costs and investment
In: Energy market reform
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In: Energy market reform
The growing share of intermittent renewable energy on the electricity production has also an influence on the remaining thermal power plants. The full load hours, especially of fossil fired power plants, are decreasing over time. In the meantime, the energy surplus produced by renewable sources is increasing and without building new controllable power plants, the back-up capacity is decreasing because old fossil fired power plants will shut down. A lot of modelling has been done in this field yielding to very different results. This paper shows a generic approach to the calculation of the power plant dispatch and the electricity generation cost. The main focus is on the influence different scenario assumptions can have on the outcome of the investigation. The aim is to show how important an extensive sensitivity analyses is. As the ambitious climate targets of the government, the strong development of intermittent renewable energies as well as the nuclear phase out provide very good scenarios, the model will be explained on the example of Germany.
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MENA countries published national policy targets for the implementation of electricity from renewable energy (RE). These targets are important as they serve as framework for stakeholders in the energy sector like businesses and administration, while also showing governmental ambitions to the public. This paper investigates the impact on resources, generation cost and GHG emissions if the targets are met. It also examines whether the current development is achieving the targets and how the targets perform in the light of the Paris Agreement. 13 to 52 % of electricity from RE is targeted for 2030. The necessary RE expansion exceeds the current expansion in most countries. Only in Morocco and Jordan are projects indicating that the targets might be reached. From a resource perspective, a much stronger expansion is possible. Beneficial locations exist allowing to cover the domestic demand or even an export of electrical energy or derived energy carrier. Furthermore, especially PV, but also wind systems, can generate electricity in many areas for lower cost than fossil fuel fired power plants. Specific GHG emissions of national electricity production in 2017 are estimated to 396–682 g/kWh and decrease to 341–514 g/kWh if the 2030 RE targets are met. The type of fossil fuel has a strong impact on the GHG emissions. Although Morocco has highest RE deployment today and targets highest RE share in 2030, it shows today and in 2030 specific GHG emissions that are among the highest of considered MENA countries because electricity production from coal dominates whereas other countries use mainly natural gas. Existing policy targets decrease specific GHG emissions until 2030. However, stronger GHG mitigation efforts will be necessary afterwards in order to reach targets of the Paris Agreement. More ambitious 2030 policy target would distribute the load more evenly over time and should be reconsidered.
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MENA countries published national policy targets for the implementation of electricity from renewable energy (RE). These targets are important as they serve as framework for stakeholders in the energy sector like businesses and administration, while also showing governmental ambitions to the public. This paper investigates the impact on resources, generation cost and GHG emissions if the targets are met. It also examines whether the current development is achieving the targets and how the targets perform in the light of the Paris Agreement. 13 to 52 % of electricity from RE is targeted for 2030. The necessary RE expansion exceeds the current expansion in most countries. Only in Morocco and Jordan are projects indicating that the targets might be reached. From a resource perspective, a much stronger expansion is possible. Beneficial locations exist allowing to cover the domestic demand or even an export of electrical energy or derived energy carrier. Furthermore, especially PV, but also wind systems, can generate electricity in many areas for lower cost than fossil fuel fired power plants. Specific GHG emissions of national electricity production in 2017 are estimated to 396–682 gCO2e/kWh and decrease to 341–514 gCO2e/kWh if the 2030 RE targets are met. The type of fossil fuel has a strong impact on the GHG emissions. Although Morocco has highest RE deployment today and targets highest RE share in 2030, it shows today and in 2030 specific GHG emissions that are among the highest of considered MENA countries because electricity production from coal dominates whereas other countries use mainly natural gas. Existing policy targets decrease specific GHG emissions until 2030. However, stronger GHG mitigation efforts will be necessary afterwards in order to reach targets of the Paris Agreement. More ambitious 2030 policy target would distribute the load more evenly over time and should be reconsidered.
BASE
MENA countries published national policy targets for the implementation of electricity from renewable energy (RE). These targets are important as they serve as framework for stakeholders in the energy sector like businesses and administration, while also showing governmental ambitions to the public. This paper investigates the impact on resources, generation cost and GHG emissions if the targets are met. It also examines whether the current development is achieving the targets and how the targets perform in the light of the Paris Agreement. 13 to 52 % of electricity from RE is targeted for 2030. The necessary RE expansion exceeds the current expansion in most countries. Only in Morocco and Jordan are projects indicating that the targets might be reached. From a resource perspective, a much stronger expansion is possible. Beneficial locations exist allowing to cover the domestic demand or even an export of electrical energy or derived energy carrier. Furthermore, especially PV, but also wind systems, can generate electricity in many areas for lower cost than fossil fuel fired power plants. Specific GHG emissions of national electricity production in 2017 are estimated to 396-682 gCO2e/kWh and decrease to 341-514 gCO2e/kWh if the 2030 RE targets are met. The type of fossil fuel has a strong impact on the GHG emissions. Although Morocco has highest RE deployment today and targets highest RE share in 2030, it shows today and in 2030 specific GHG emissions that are among the highest of considered MENA countries because electricity production from coal dominates whereas other countries use mainly natural gas. Existing policy targets decrease specific GHG emissions until 2030. However, stronger GHG mitigation efforts will be necessary afterwards in order to reach targets of the Paris Agreement. More ambitious 2030 policy target would distribute the load more evenly over time and should be reconsidered.
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The government of China has introduced a series of energy-saving and emission reduction policies and energy industry development plans to promote the low-carbon development of the power sector. Under relatively clear and specific low-carbon development goals, the ongoing power transition has recently been studied intensively in the frame of global sustainable transition. With the development of renewable technologies, besides the long-term development goals, learning and diffusion of innovative technologies and the incentive effect of supportive policies are also important driving forces of the transition. The levelized power generation cost is the power generation cost when the net present value of the power project is zero. In this paper, the levelized power generation cost model with a learning curve and policy scenario is used to reflect the impact of technology diffusion and incentive policies from the economy perspective. By treating it as a state transfer function, a dynamic power generation&ndash ; transmission integrated planning model based on the Markov Decision Process is established to describe the long-term power transition pathway under the impact of power technology diffusion and incentive policies. Through the calculation of power demand forecasting data up to 2050 and other power system information, the dynamic planning result shows that the current low-carbon policies cannot obviously reduce the expansion of coal power, but if strict low-carbon policies are implemented, the renewable power will gradually become dominant in the power structure before 2030.
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The share of wind generation in the Irish and British electricity markets is set to increase by 2020 due to renewable energy (RE) targets. The United Kingdom (UK) and Ireland have set ambitious targets which require 30% and 40% of electricity demand to come from RE, mainly wind, by 2020, respectively. Ireland has sufficient indigenous onshore wind energy resources to exceed the RE target, while the UK faces uncertainty in achieving its target. A possible solution for the UK is to import RE directly from large scale onshore and offshore wind energy projects in Ireland; this possibility has recently been explored by both governments but is currently on hold. Thus, the aim of this paper is to estimate the effects of large scale wind energy in the Irish and British electricity markets in terms of wholesale system marginal prices, total generation costs and CO2 emissions. The results indicate when the large scale Irish-based wind energy projects are connected directly to the UK there is a decrease of 0.6% and 2% in the Irish and British wholesale system marginal prices under the UK National Grid slow progression scenario, respectively.
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Solar parks are well-defined areas developed in the high solar potential area, with the required infrastructure to minimize the potential threat for the developers. Land occupancy is a major concern for the solar park. The government policy mostly emphasizes the use of waste-degraded land for solar parks. In a competitive energy market, any attempt to use waste-degraded land parcels, without policy regulatory support, can bring large-scale disruptions in the quality and cost of power. The present study investigates the potential of using waste degraded land, with a focus on the impact on the cost of generation and decision making. The study investigates the possibility of including the cost of the externalities in the overall cost economics, through policy and regulatory interventions. Data related to India has been considered in the present analysis. Results show that there are less socio-economic and ecological impacts in using wastelands, compared to land, in urban-semi urban areas with an opportunity cost. Thus, the policy and regulatory interventions could promote wasteland utilization and lure favorable decision-making on investments.
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In: Economica, Band 19, Heft 74, S. 193
In: Contemporary economic policy: a journal of Western Economic Association International, Band 8, Heft 3, S. 200-214
ISSN: 1465-7287
The levelized cost of electricity is estimated for more than 70 electricity production technologies and for two facility ownership sectors. The analysis uses a Lotus 1–2‐3 spreadsheet for a consistent approach. The cost effectiveness of several alternative technologies is compared with that of conventional technologies. A variety of owners could build and operate facilities made from these conventional and alternative technologies.
In: The Australian economic review, Band 44, Heft 3, S. 269-292
ISSN: 1467-8462
In 2004, in the beginning of the first president Lula mandate, a complete regulatory reform of electricity was launched. In 2008, four years after, Brazilian Congress started an investigation of the causes of Brazilian relatively high electricity tariffs. The results of the investigation pointed out numerous reasons, but failed to identify generation costs as one of the main causes. In this paper the analysis done by Congress is broadened addressing the trend in electricity production costs. The main conclusions are that the implementation of auctions together with subsidies from state enterprises did not reduce future acquisition costs as much as expected, but successfully reduced the rhythm of price increases. The long run marginal expansion cost is increasing very fast because new hydro plants are ever more distant of consumption centers and environmental costs are difficult to mitigate. Thermal plants and other technologies, though increasing in importance, still have much higher prices. In case prices reflected marginal incremental costs, electricity prices would have been much higher. The fact that consumers do not see such high incremental costs, allow them to take wrong consumption decisions. As consumers are able to buy at prices lower than marginal cost, consumption levels go too far. Demand increases amplify the electricity market gap and reinforce the necessity of new investments.
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In: Gujba , H , Mulugetta , Y & Azapagic , A 2011 , ' Power generation scenarios for Nigeria: An environmental and cost assessment ' Energy Policy , vol 39 , no. 2 , pp. 968-980 . DOI:10.1016/j.enpol.2010.11.024
Exploratory scenarios for the power sector in Nigeria are analysed in this paper using possible pathways within the Nigerian context and then compared against the Government's power expansion plan in the short to medium term. They include two fossil-fuel (FF and CCGT) and two sustainable-development-driven scenarios (SD1 and SD2). The results from the FF scenarios indicate this is the preferred outcome if the aim is to expand electricity access at the lowest capital costs. However, the annual costs and environmental impacts increase significantly as a consequence. The SD1 scenario, characterised by increased penetration of renewables, leads to a reduction of a wide range of environmental impacts while increasing the annual costs slightly. The SD2 scenario, also with an increased share of renewables, is preferred if the aim is to reduce GHG emissions; however, this comes at an increased annual cost. Both the SD1 and SD2 scenarios also show significant increases in the capital investment compared to the Government's plans. These results can be used to help inform future policy in the Nigerian electricity sector by showing explicitly the range of possible trade-offs between environmental impacts and economic costs both in the short and long terms. © 2010 Elsevier Ltd.
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In the following decades there will be a fundamental structural change in the European power supply system. This structural change is forced by several factors, e.g. the European Union Greenhouse Gas Emission Trading Scheme, the strategic goal for the European Union of a more sustainable development, energy policy targets to double the share of renewable ener-gies, the phase out or moratoria of the nuclear industry in some European Union member states, and the need of more than 200 GW of new power plant capacities in EU-15. The struc-tural change has to be embedded into an economic, social and ecological framework. Within this framework, there is a variety of possible options to create a future power supply which fulfils the multiple criteria. Generally, different technologies can be chosen which all have their own advantages and disadvantages. It is a challenging decision-making process because fossil-fired power plants tend to be economically advantageous and ecologically disadvanta-geous whereas renewable energy systems tend to be ecologically advantageous and economi-cally disadvantageous. This study gives a comparison of the estimated external costs (environmental aspects) and internal costs (economic aspects) of different power generation technologies in the year 2010 in order to support the decision-making process of future power plant investments in the framework of a sustainable development. A life cycle analysis gives considerable life cycle data for photovoltaic systems, wind turbines, fuel cells, bio-fuelled combined heat and power plants, biomass, water, solar thermal, geothermal, coal-fired, lignite-fired and natural gas-fired power plants as well as nuclear power plants. This database is used for the estimation of external costs which is based on updated factors of damage and avoidance costs for selected emissions. The damage factors are calculated with the software tool EcoSense following the impact pathway approach. Global warming and discounting are considered to be the hot spots in the external costs discussion. An avoidance costs approach is applied which is assumed to fulfil sustainability criteria. The comparison of the external costs of the technologies analysed shows that external costs of power generation technologies using renewable energies and nuclear power plants are in the range of 0.03-3.79 €-Cent/kWhel whereas the external costs of power generation technologies using organic fossil fuels are in the range of 3.37-27.98 €-Cent/kWhel. However, the comparison of the internal costs shows that fossil-fuelled power plants have the lowest internal costs compared to the other technologies analysed. This trade-off between external and internal costs requires a comparison of the social costs which are the sum of internal and external costs. The comparison of the social costs shows five social cost clusters for the ana-lysed technologies for the year 2010. Nuclear power plants have social costs of less than 10 €-Cent/kWhel. Wind turbines and river power plants have slightly higher social costs of 10-15 €-Cent/kWhel. Biomass power plants, bio-fuelled combined heat and power plants, solar ther-mal power plants, geothermal power plants and natural gas-fired power plants have social costs in the range of 15-20 €-Cent/kWhel. Photovoltaic systems in Spain, fuel cells, coal-fired power plants and lignite-fired power plants have social costs in the range of 20-35 €-Cent/kWhel. The highest social costs are caused by Photovoltaic systems in Germany with more than 35 €-Cent/kWhel.
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