Can market power in the electricity spot market translate into market power in the hedge market?

Electricity is a non-storable commodity frequently traded in complex markets characterized by oligopolistic structures and uniform-price auctions. Electricity prices have idiosyncratic patterns not addressed by the usual commodity pricing literature. This paper develops an electricity market model that allows for oligopoly, vertical integration, and a uniform-price auction mechanism. It derives a linear equilibrium relationship between spot prices and state variables affecting firms' costs and demand. It then applies a two-factor forward pricing model over the equilibrium spot price process, and shows that forward prices can be positively affected by spot market power. An empirical estimation of the model follows, using NZEM data.     

Can cellulose be a sustainable feedstock for bioethanol production?

Bioethanol is a promising substitute for conventional fossil fuels. The focus of this work was to convert commercial cellulose (Avicel^® PH-101) to ethanol. In the first step, cellulose was selectively converted to glucose. Cellulose hydrolysis was carried out under microwave irradiation using hydrochloric acid as catalyst. Process parameters – acid concentration, irradiation time, and power consumption – were optimized. A yield of 0.67 g glucose/g cellulose was achieved under modest reaction conditions (2.38 M acid concentration, irradiation time – 7 min, 70% of power consumption). The glucose thus produced was then converted to ethanol by fermention with yeast (Saccharomyces cerevisiae). The speed, selective nature of the process and the attractive overall yield indicate that cellulose, a vast carbohydrate source, could indeed be a sustainable feedstock for bioethanol production.     

Wind power and photovoltaic power: How to improve the accommodation capability of renewable electricity generation in China?

China's wind curtailment and photovoltaic curtailment was one of the prominent issues in 2014, and the renewable curtailment worsened in 2015. With the rapid growth of renewables, the phenomenon of the insufficiency in renewable accommodation capability is becoming more and more serious in 2016. In that case, the problem of the insufficient accommodation capability is pointed out by analyzing China's development requirements. The renewable power generation scale, the renewable power consumption, and the restrictions on the renewable electricity generation are discussed from the China's market perspective. Meanwhile, the legal environment, the planning requirement, the institutional setting, and the policy tools are introduced from the perspective of governmental regulation. An empirical analysis, a cause analysis and a trend analysis are illustrated before explaining the problem of renewable curtailment and proposing a solution for enhancing the accommodation capability. According to the analysis results, the solution for addressing the wind curtailment and PV curtailment is offered with respect to the technology, the institution, the legislation, and the political aspect. Through the research, the research conclusions are drew finally and the corresponding policy recommendations are put forward.     

Ready for nuclear energy?: An assessment of capacities and motivations for launching new national nuclear power programs

The International Atomic Energy Agency reports that as of July 2009 there were 52 countries interested in building their first nuclear power plant. This paper characterizes and evaluates these “Newcomer Countries” in terms of their capacity and motivations to develop nuclear power. It quantifies factors historically associated with the development of nuclear energy programs and then benchmarks the Newcomers against these data. Countries with established nuclear power programs, particularly where nuclear facilities are privately owned, are typically larger, wealthier and politically stable economies with high government effectiveness. Nuclear power was historically launched during periods of high electricity consumption growth. Other indicators for the potential of nuclear power include: the size of the national grid, the presence of international grid connections and security of fuel supply for electricity production. We identify 10 Newcomers which most closely resemble the Established Nuclear Power Countries and thus are most likely to deploy nuclear energy, 10 countries where the development of nuclear energy is uncertain due to high political instability, 14 countries with lower capacities where pursuing nuclear energy may require especially strong international cooperation and 18 countries where the development of nuclear power is less likely due to their significantly lower capacities and motivations.     

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Transforming energy systems to fulfill the needs of a low-carbon economy requires large investments in renewable electricity production (RES-E). Recent literature underlines the need to take a closer look at the composition of the RES-E investor group in order to understand the motives and investment processes of different types of investors. However, existing energy policies generally consider RES-E investments made on a regional or national level, and target investors who evaluate their RES-E investments according to least-cost high-profit criteria. We present empirical evidence to show that RES-E investments are made by a heterogeneous group of investors, that a variety of investors exist and that their formation varies among the different types of renewable sources. This has direct implications for our understanding of the investment process in RES-E and for the study of motives and driving forces of RES-E investors. We introduce a multi-dimensional framework for analyzing differences between categories of investors, which not only considers to the standard economic dimension which is predominant in the contemporary energy literature, but also considers the entrepreneurship, innovation-adoption and institutional dimensions. The framework emphasizes the influence of four main investor-related factors on the investment process which should be studied in future research: motives, background, resources and personal characteristics.     

Effective policies for renewable energy—the example of China's wind power—lessons for China's photovoltaic power

China, one of the global biggest emitter of CO₂, needs promotion renewable energy to reduce air pollution from its surging fossil fuel use, and to increase its energy supply security. Renewable energy in its infancy needs policy support and market cultivation. Wind power installed capacity has boomed in recent year in China, as a series of effective support policies were adopted. In this paper, I review the main renewable energy policies regarding to China's wind power, including the Wind Power Concession Program, Renewable Energy Law, and a couple of additional laws and regulations. Such policies have effectively reduced the cost of wind power installed capacity, stimulated the localization of wind power manufacture, and driven the company investment in wind power. China is success in wind power installed capacity, however, success in wind-generated electricity has yet achieved, mainly due to the backward grid system and lack of quota system. The paper ends with the recommended best practice of the China's wind power installed capacity might be transferable to China's photovoltaic power generation.     

Is there a space for additional renewable energy in the Norwegian power system? Potential for reduced global emission?

This paper presents the results of a Norwegian power system analysis. An energy system analysis model based on linear programming is used for modelling and optimisation. The analyses cover a number of scenarios where the studied system is subjected to changes by introducing other renewable energy sources, energy conservation measures and measures to promote renewable energy. The study shows that due to a combination of cheap hydropower and high investment costs, it is quite difficult for new generation units to be profitable. This is also true during periods of low precipitation where the system tends to survive on imported power instead of investing in new generation units. However, this does not apply to energy conservation measures that easily enter the system. On the other hand, biomass based CHP, wind power and wave power could be viable if measures are introduced to promote their use. Most of the scenarios show a high potential for reducing global emissions.     

Large-scale wind power in European electricity markets: Time for revisiting support schemes and market designs?

This paper questions whether current renewable support schemes and electricity market designs are well-suited to host a significant amount of wind energy. Our analysis aims at finding the right equilibrium between market signals received by wind generators and their intrinsic risks. More market signals are needed to give the right incentives for reducing wind integration costs but should not undermine the effectiveness of support schemes. Although several alternatives combining support schemes and market signals could improve the current situation in terms of market signals and risks, feed-in premium support scheme seems actually to be the more balanced option. Furthermore, an adequate sharing of wind generation technical responsibility between the system operator and wind power producers can help to control wind integration costs even in the absence of accurate market signals.     

Hydrogen production from methane and solar energy – Process evaluations and comparison studies

Three conventional and novel hydrogen and liquid fuel production schemes, i.e. steam methane reforming (SMR), solar SMR, and hybrid solar-redox processes are investigated in the current study. H₂ (and liquid fuel) productivity, energy conversion efficiency, and associated CO₂ emissions are evaluated based on a consistent set of process conditions and assumptions. The conventional SMR is estimated to be 68.7% efficient (HHV) with 90% CO₂ capture. Integration of solar energy with methane in solar SMR and hybrid solar-redox processes is estimated to result in up to 85% reduction in life-cycle CO₂ emission for hydrogen production as well as 99–122% methane to fuel conversion efficiency. Compared to the reforming-based schemes, the hybrid solar-redox process offers flexibility and 6.5–8% higher equivalent efficiency for liquid fuel and hydrogen co-production. While a number of operational parameters such as solar absorption efficiency, steam to methane ratio, operating pressure, and steam conversion can affect the process performances, solar energy integrated methane conversion processes have the potential to be efficient and environmentally friendly for hydrogen (and liquid fuel) production.     

Investment opportunities: Hydrogen production or BTC mining?

Green hydrogen production investment is encouraged for GHG reduction while cryptocurrency mining might be more lucrative. GHG emission reduction may visibly happen in areas of attention while other dirty businesses can grow in the shadow due to inconsistent carbon policies. This paper sheds light on the importance of integrated regulatory policies among cross markets to nail a tangible global impact on GHG emissions. The levelized cost of hydrogen production via grid-connected electrolysis is calculated at around 4 €/kgH2 in Europe. The scenario-based analyses on the current markets indicate that investments in the water-splitting industries can be as attractive as BTC mining if the products are fully purchased at prices above 20 €/kgH2. Such a deep economic chasm can be moderated by policymakers. Crypto Tax is introduced to interconnect the purchased price of hydrogen with the BTC market by tagging the coins regarding the mining origins. Cryptocurrency miners are obliged to provide dynamic subsidies for electrolyzers depending on their emission coefficients and the coin prices. Simulations confirm that the crypto tax leaves insignificant impacts when BTC falls below 10,000$; however, cryptocurrency rushes, like in 2020–2021, can be harnessed in favor of green hydrogen production. The efficacy of crypto tax is also showcased by Net Present Value (NPV) trajectories for BTC soaring up to 100,000$.     

What is the global potential for renewable energy?

World energy demand is projected to rise to 1000 EJ (EJ = 10¹⁸ J) or more by 2050 if economic growth continues its course of recent decades. Both reserve depletion and greenhouse gas emissions will necessitate a major shift from fossil fuels as the dominant energy source. Since nuclear power is now unlikely to increase its present modest share, renewable energy (RE) will have to provide for most energy in the future. This paper addresses the questions of what energy levels RE can eventually provide, and in what time frame. We find that when the energy costs of energy are considered, it is unlikely that RE can provide anywhere near a 1000 EJ by 2050. We further show that the overall technical potential for RE will fall if climate change continues. We conclude that the global shift to RE will have to be accompanied by large reductions in overall energy use for environmental sustainability.     

Hydrogen production from biogas: Process optimization using ASPEN Plus®

This work is part of the VABHYOGAZ (valorization of biogas into hydrogen) program, which targeted the industrial deployment of hydrogen production from biogas in France. To-date, different processes of methane reforming, such as steam reforming of methane (SRM), dry reforming of methane (DRM) and tri-reforming of methane (TRM), have been studied in the literature, but only SRM is applied at industrial scale. Since SRM is an energy-intensive process, a critical analysis of these routes for hydrogen production from biogas is indispensable for process optimization. This has been addressed in this work, by using ASPEN Plus® simulation. Different global processes of hydrogen production from biogas, via DRM, SRM, or TRM, with or without tail gas recycling, have been studied. Among them, hydrogen production using TRM technique (H₂-TRM0.3C process) with a partial recycling of tail gas (30%) was found to be the best option, leading to the highest hydrogen production rate and the best energy yield. H₂-TRM0.3C process was also found to be more efficient than the actual industrial process (H₂-REF), which is based on SRM technique. Under the same conditions, H₂-TRM0.3C process led to a higher H₂ production (8.7% more), a lower total energy consumption (18.6% less), and a lower waste heat generation (15.4% less), in comparison with the actual industrial process (H₂-REF).     

Hydrogen storage for mixed wind–nuclear power plants in the context of a Hydrogen Economy

A novel methodology for the economic evaluation of hydrogen production and storage for a mixed wind–nuclear power plant considering some new aspects such as residual heat and oxygen utilization is applied in this work. This analysis is completed in the context of a Hydrogen Economy and competitive electricity markets. The simulation of the operation of a combined nuclear–wind–hydrogen system is discussed first, where the selling and buying of electricity, the selling of excess hydrogen and oxygen, and the selling of heat are optimized to maximize profit to the energy producer. The simulation is performed in two phases: in a pre-dispatch phase, the system model is optimized to obtain optimal hydrogen charge levels for the given operational horizons. In the second phase, a real-time dispatch is carried out on an hourly basis to optimize the operation of the system as to maximize profits, following the hydrogen storage levels of the pre-dispatch phase. Based on the operation planning and dispatch results, an economic evaluation is performed to determine the feasibility of the proposed scheme for investment purposes; this evaluation is based on calculations of modified internal rates of return and net present values for a realistic scenario. The results of the present studies demonstrate the feasibility of a hydrogen storage and production system with oxygen and heat utilization for existent nuclear and wind power generation facilities.     

Are fundamentals enough? Explaining price variations in the German day-ahead and intraday power market

European electricity market participants are encouraged to balance intraday deviations from their day-ahead schedules via trades in the intraday market. Together with the increasing production of variable renewable energy sources (RES), the intraday market is gaining importance. We investigate the explanatory power of a fundamental modeling approach explicitly accounting for must-run operations of combined heat and power plants (CHP) and intraday peculiarities such as a shortened intraday supply stack. The fundamental equilibria between every hour's supply stack and aggregated demand in 2012 and 2013 are modeled to yield hourly price estimates. The major benefits of a fundamental modeling approach are the ability to account for non-linearities in the supply stack and the ability to combine time-varying information consistently. The empirical results show that fundamental modeling explains a considerable share of spot price variance. However, differences between the fundamental and actual prices persist and are explored using regression models. The main differences can be attributed to (avoided) start up-costs, market states and trading behavior.     

Humankind’s detour toward sustainability: past,present, and future of renewable energies and electric power generation

Renewable energies have been the primary energy source in the history of the human race. During the last 200 years, industrialized countries have shifted their energy consumption toward fossil fuels. Contemporary electric power generation is based on non-renewable resources such as oil, coal, and nuclear power. New efficient and cost-effective small-scale renewable energy generation options are commercially available today. Market distortions are to be overcome in order to make renewable energies cost-competitive in today’s economic environment. Social, environmental and also economic reasons will reverse the worldwide primary energy use back to renewables and thus reapproach a sustainable economic system based on traditional and new high-tech technologies.     

On the physics of power,energy and economics of renewable electric energy sources – Part I

Environmental concerns have increasingly led to the installation of Renewable Energy Technologies (RETs) despite the fact that they are recognized as expensive. Innovative efforts within the area are beset with difficulties [1], and they are at risk of producing misdirected or insignificant improvements in terms of the cost effectiveness of total energy conversion systems. This paper investigates how RETs can be evaluated, in terms of economy and engineering solutions, by studying the fundamental physics of renewable energy sources and how it matches with the RETs. This match is described by the “Degree of Utilization”. The findings indicate that new innovations should focus on the possible number of full loading hours. RETs that are correctly matched to their energy source generate a higher amount of electric energy and have a higher potential of becoming more competitive. In cases where this aspect has been ignored, leading to relatively small degrees of utilization, it can be understood as an engineering mismatch between installed power, converted energy, and the fundamental physics of the renewable energy sources. Since there is a strong and possibly biased support for so-called mature RETs and already existing solutions, a clarification of how fundamental physical laws affect the cost of investments and payback of investments is needed. The present paper is part I out of II and it focuses on the difference between power and energy and the physics of different energy sources and their utilization.     

Why (and how) to regulate power exchanges in the EU market integration context?

The European Union (EU) market integration is leading to increasingly monopolistic electricity market infrastructures, which has opened a debate on the regulation of these so-called power exchanges. In this paper, we start by stating that there are two types of power exchanges in Europe, i.e. “merchant” and “cost-of-service regulated” power exchanges. We then discuss how regulation can be used to better align their incentives with the main power exchange tasks. We conclude that adopting the cost-of-service regulated model for all power exchanges in Europe could be counterproductive in the current context, but that regulation can help ensure that the benefits of the EU market integration materialize. Promising regulatory actions include tempering the reinforced market power of power exchanges, and quality-of-service regulation for the ongoing cooperation among power exchanges to organize trade across borders.     

Assessment of the renewable energies potential for intensive electricity production in the province of Jaén,southern Spain

The foreseen depletion of the traditional fossil fuels for the forthcoming decades is forcing us to seek for new sustainable and non-pollutant energy sources. Renewable energies rely on a decentralized scheme strongly dependent on the local resources availability. In this work, we tackle the study of the renewable energies potential for an intensive electricity production in the province of Jaén (southern Spain) which has a pronounced unbalance between its inner electricity production and consumption. The potential of biomass from olive pruning residues, solar photovoltaics (PV) and wind power has been analyzed using Geographical Information System tools, and a proposal for a massive implementation of renewable energies has been arisen. In particular, we propose the installation of 5 biomass facilities, totaling 98 MW of power capacity, with an estimated annual production of 763 GWh, 12 PV facilities, totaling 420 MW of power capacity, with an estimated annual production of 656 GWh and 506 MW of wind power capacity in a number of wind farms, with an estimated annual production of 825 GWh. Overall, this production frame would meet roughly a 75% of the electricity demands in the province and thus would mitigate the current unbalance.     

Adapting the French nuclear fleet to integrate variable renewable energies via the production of hydrogen: Towards massive production of low carbon hydrogen?

Producing low-carbon hydrogen at a competitive rate is becoming a new challenge with respect to efforts to reduce greenhouse gas emissions. We examine this issue in the French context, which is characterised by a high nuclear share and the target to increase variable renewables by 2050. The goal is to evaluate the extent to which excess nuclear power could contribute to producing low-carbon hydrogen.Our approach involves designing scenarios for nuclear and renewables, modelling and evaluating the potential nuclear hydrogen production volumes and costs, examining the latter through the scope of hydrogen market attractiveness and evaluating the potential of CO₂ mitigation.This article shows that as renewable shares increase, along with the hydrogen market expected growth driven by mobility uses, opportunities are created for the nuclear operator. If nuclear capacities are maintained, nuclear hydrogen production could correspond to the demand by 2030. If not, possibilities could still exist by 2050.     

Hydrogen–steel interaction: hydrogen embrittlementin pipes for power former plant effluents

The steel industrially employed for the transport of liquid hydrocarburics in thepresence of hydrogen at high temperatures is ASTM A335 P11, a steel for seamless pipes for useat high temperature. Three different kinds of tests have been performed: tests of prenaturedfracture, tests of thermal analysis and infrared analysis. The present work has deeply studied themechanisms of interaction between hydrogen and steel, trying to integrate and motivate theindustrial data, commonly used for plant planning and sizing (A.P.I. Diagrams), proving that thecause for the damaging of this material is mainly due to the harmful interaction of carbides andinclusion with hydrogen.