Baseload electricity from wind via compressed air energy storage (CAES)

This study investigates two methods of transforming intermittent wind electricity into firm baseload capacity: (1) using electricity from natural gas combined-cycle (NGCC) power plants and (2) using electricity from compressed air energy storage (CAES) power plants. The two wind models are compared in terms of capital and electricity costs, CO₂ emissions, and fuel consumption rates. The findings indicate that the combination of wind and NGCC power plants is the lowest-cost method of transforming wind electricity into firm baseload capacity power supply at current natural gas prices (∼$6/GJ). However, the electricity supplied by wind and CAES power plants becomes economically competitive when the cost of natural gas for electric producers is $10.55/GJ or greater. In addition, the Wind-CAES system has the lowest CO₂ emissions (93% and 71% lower than pulverized coal power plants and Wind-NGCC, respectively) and the lowest fuel consumption rates (9 and 4 times lower than pulverized coal power plants and Wind-NGCC, respectively). As such, the large-scale introduction of Wind-CAES systems in the U.S. appears to be the prudent long-term choice once natural gas price volatility, costs, and climate impacts are all considered.     

The cost of integration of zero emission power plants—A case study for the island of Cyprus

In this work, a technical, economic and environmental analysis is carried out for the estimation of the optimal option scenario for the Cyprus's future power generation system. A range of power generation technologies integrated with carbon capture and storage (CCS) were examined as candidate options and compared with the business as usual scenario. Based on the input data and the assumptions made, the simulations indicated that the integrated gasification combined cycle (IGCC) technology with pre-combustion CCS integration is the least cost option for the future expansion of the power generation system. In particular, the results showed that for a natural gas price of 7.9US$/GJ the IGCC technology with pre-combustion CCS integration is the most economical choice, closely followed by the pulverized coal technology with post-combustion CCS integration. The combined cycle technology can, also, be considered as alternative competitive technology. The combined cycle technologies with pre- or post-combustion CCS integration yield more expensive electricity unit cost. In addition, a sensitivity analysis has been also carried out in order to examine the effect of the natural gas price on the optimum planning. For natural gas prices greater than 6.4US$/GJ the least cost option is the use of IGCC technology with CCS integration. It can be concluded that the Cyprus's power generation system can be shifted slowly towards the utilization of CCS technologies in favor of the existing steam power plants in order not only to lower the environmental emissions and fulfilling the recent European Union Energy Package requirements but also to reduce the associated electricity unit cost.     

Determinants of the costs of carbon capture and sequestration for expanding electricity generation capacity

This study models the costs of electricity generation with carbon capture and sequestration (CCS), from generation at the power plant to carbon injection at the reservoir, examining the economic factors that affect technology choice and CCS costs at the individual plant level. The results suggest that natural gas and coal prices have profound impacts on the carbon price needed to induce CCS. To extend previous analyses we develop a "cost region" graph that models technology choice as a function of carbon and fuel prices. Generally, the least-cost technology at low carbon prices is pulverized coal, while intermediate carbon prices favor natural gas technologies and high carbon prices favor coal gasification with capture. However, the specific carbon prices at which these transitions occur is largely determined by the price of natural gas. For instance, the CCS-justifying carbon price ranges from $27/t CO₂ at high natural gas prices to $54/t CO₂ at low natural gas prices. This result has important implications for potential climate change legislation. The capital costs of the generation and CO₂ capture plant are also highly important, while pipeline distance and criteria pollutant control are less significant.     

Future prospects for production of methanol and hydrogen from biomass

Technical and economic prospects of the future production of methanol and hydrogen from biomass have been evaluated. A technology review, including promising future components, was made, resulting in a set of promising conversion concepts. Flowsheeting models were made to analyse the technical performance. Results were used for economic evaluations. Overall energy efficiencies are around 55% HHV for methanol and around 60% for hydrogen production. Accounting for the lower energy quality of fuel compared to electricity, once-through concepts perform better than the concepts aimed for fuel only production. Hot gas cleaning can contribute to a better performance. Systems of 400 MW_th input produce biofuels at US$ 8–12/GJ, this is above the current gasoline production price of US$ 4–6/GJ. This cost price is largely dictated by the capital investments. The outcomes for the various system types are rather comparable, although concepts focussing on optimised fuel production with little or no electricity co-production perform somewhat better. Hydrogen concepts using ceramic membranes perform well due to their higher overall efficiency combined with modest investment. Long-term (2020) cost reductions reside in cheaper biomass, technological learning, and application of large scales up to 2000 MW_th. This could bring the production costs of biofuels in the US$ 5–7/GJ range. Biomass-derived methanol and hydrogen are likely to become competitive fuels tomorrow.     

A comparison of electricity and hydrogen production systems with CO2 capture and storage—Part B: Chain analysis of promising CCS options

Promising electricity and hydrogen production chains with CO₂ capture, transport and storage (CCS) and energy carrier transmission, distribution and end-use are analysed to assess (avoided) CO₂ emissions, energy production costs and CO₂ mitigation costs. For electricity chains, the performance is dominated by the impact of CO₂ capture, increasing electricity production costs with 10–40% up to 4.5–6.5 €ct/kWh. CO₂ transport and storage in depleted gas fields or aquifers typically add another 0.1–1 €ct/kWh for transport distances between 0 and 200 km. The impact of CCS on hydrogen costs is small. Production and supply costs range from circa 8 €/GJ for the minimal infrastructure variant in which hydrogen is delivered to CHP units, up to 20 €/GJ for supply to households. Hydrogen costs for the transport sector are between 14 and 16 €/GJ for advanced large-scale coal gasification units and reformers, and over 20 €/GJ for decentralised membrane reformers. Although the CO₂ price required to induce CCS in hydrogen production is low in comparison to most electricity production options, electricity production with CCS generally deserves preference as CO₂ mitigation option. Replacing natural gas or gasoline for hydrogen produced with CCS results in mitigation costs over 100 €/t CO₂, whereas CO₂ in the power sector could be reduced for costs below 60 €/t CO₂ avoided.     

Oil and natural gas prices and greenhouse gas emission mitigation

The hikes in hydrocarbon prices during the last years have lead to concern about investment choices in the energy system and uncertainty about the costs for mitigation of greenhouse gas emissions. On the one hand, high prices of oil and natural gas increase the use of coal; on the other hand, the cost difference between fossil-based energy and non-carbon energy options decreases. We use the global energy model TIMER to explore the energy system impacts of exogenously forced low, medium and high hydrocarbon price scenarios, with and without climate policy. We find that without climate policy high hydrocarbon prices drive electricity production from natural gas to coal. In the transport sector, high hydrocarbon prices lead to the introduction of alternative fuels, especially biofuels and coal-based hydrogen. This leads to increased emissions of CO₂. With climate policy, high hydrocarbon prices cause a shift in electricity production from a dominant position of natural gas with carbon capture and sequestration (CCS) to coal-with-CCS, nuclear and wind. In the transport sector, the introduction of hydrogen opens up the possibility of CCS, leading to a higher mitigation potential at the same costs. In a more dynamic simulation of carbon price and oil price interaction the effects might be dampened somewhat.     

A retrospective analysis of benefits and impacts of U.S. renewable portfolio standards

As states consider revising or developing renewable portfolio standards (RPS), they are evaluating policy costs, benefits, and other impacts. We present the first U. S. national-level assessment of state RPS program benefits and impacts, focusing on new renewable electricity resources used to meet RPS compliance obligations in 2013. In our central-case scenario, reductions in life-cycle greenhouse gas emissions from displaced fossil fuel-generated electricity resulted in $2.2 billion of global benefits. Health and environmental benefits from reductions in criteria air pollutants (sulfur dioxide, nitrogen oxides, and particulate matter 2.5) were even greater, estimated at $5.2 billion in the central case. Further benefits accrued in the form of reductions in water withdrawals and consumption for power generation. Finally, although best considered resource transfers rather than net societal benefits, new renewable electricity generation used for RPS compliance in 2013 also supported nearly 200,000 U. S.-based gross jobs and reduced wholesale electricity prices and natural gas prices, saving consumers a combined $1.3–$4.9 billion. In total, the estimated benefits and impacts well-exceed previous estimates of RPS compliance costs.     

Abatement costs of CO2 emissions in the Brazilian oil refining sector

This study aims at estimating the abatement costs of CO₂ emissions of the Brazilian oil refining sector. For greenfield refineries that will be built until 2030, mitigation options include the modification of refining schemes and efficiency gains in processing units. For existing refineries and those already under construction, only mitigation options based on efficiency gains in processing units are evaluated. The abatement cost of each mitigation option was determined on the basis of incremental costs compared with a reference scenario. Two discount rates were applied: one adopted by the Brazil’s government official long term plan (8% p.a.), and another typically adopted by the private oil sector (15% p.a.). Findings indicate that refineries face high abatement costs. The cost of changing the processing scheme of greenfield plants reaches US$100/tCO₂ at 15% p.a. discount rate. Even at 8% p.a. discount rate the abatement cost is higher than US$50/tCO₂. The most promising alternative is thermal energy management, whose abatement cost equals US$20/tCO₂ at 8% p.a. discount rate. However, private investors perceive this option at US$80/tCO₂, which is still high. This difference in cost indicates the need for public policies for promoting carbon mitigation measures in Brazilian oil refineries.     

Technology learning for renewable energy: Implications for South Africa's long-term mitigation scenarios

Technology learning can make a significant difference to renewable energy as a mitigation option in South Africa's electricity sector. This article considers scenarios implemented in a Markal energy model used for mitigation analysis. It outlines the empirical evidence that unit costs of renewable energy technologies decline, considers the theoretical background and how this can be implemented in modeling. Two scenarios are modelled, assuming 27% and 50% of renewable electricity by 2050, respectively. The results show a dramatic shift in the mitigation costs. In the less ambitious scenario, instead of imposing a cost of Rand 52/t CO₂-eq (at 10% discount rate), reduced costs due to technology learning turn renewables into negative cost option. Our results show that technology learning flips the costs, saving R143. At higher penetration rate, the incremental costs added beyond the base case decline from R92 per ton to R3. Including assumptions about technology learning turns renewable from a higher-cost mitigation option to one close to zero. We conclude that a future world in which global investment in renewables drives down unit costs makes it a much more cost-effective and sustainable mitigation option in South Africa.     

Performance of simulated flexible integrated gasification polygeneration facilities,Part B: Economic evaluation.

This paper investigates the economics of integrated gasification polygeneration (IG-PG) facilities and assesses under which market conditions flexible facilities outperform static facilities. In this study, the facilities use Eucalyptus wood pellets (EP), torrefied wood pellets (TOPS) and Illinois #6 coal as feedstock to produce electricity, FT-liquids, methanol and urea. All facilities incorporate CCS. The findings show production costs from static IG-PG facilities ranging between 12 and 21 €/GJ using coal, 19–33 €/GJ using TOPS and 22–38 €/GJ using EP, which is above the average market prices. IG-PG facilities can become competitive if capital costs drop by 10%–27% for coal based facilities. Biomass based facilities will need lower biomass pellet prices or higher CO₂ credit prices. Biomass becomes competitive with coal at a CO₂ credit price of 50–55 €/t CO₂. Variations in feedstock, CO₂ credit and electricity prices can be offset by operating a feedstock flexible IG-PG facility, which can switch between coal and TOPS, thereby altering its electricity production. The additional investment is around 0.5% of the capital costs of a dedicated coal based IG-PG facility. At 30 €/t CO₂, TOPS will be the preferred feedstock for 95% of the time at a feedstock price of 5.7 €/GJ. At these conditions, FT-liquids (gasoline/diesel) can be produced for 15.8 €/GJ (116 $/bbl). Historic records show price variations between 5.7 and 7.3 €/GJ for biomass pellet, 1.0–5.6 €/GJ for coal and 0–32 €/t CO₂. Within these price ranges, coal is generally the preferred feedstock, but occasionally biomass is preferred. Lower biomass prices will increase the frequency of switching feedstock preference from coal to biomass, raising the desire for flexibility. Of the three investigated chemicals, an IG-PG facility producing FT-liquids benefits the most from flexibility. Our study suggests that if the uncertainty in commodity prices is high, a small additional investment can make flexible IG-PG facilities attractive.     

Cost-benefit analysis of energy scenarios for the Mexican power sector

Three Mexican power sector scenarios for the period 1996–2025 are subjected to a cost-benefit analysis. The three scenarios are: base (using fuel oil), official (introducing natural gas) and transition (incorporating renewable energy). Also technical, economic and energy resources databases are constructed to supply information for the analysis. Benefit/cost ratios (B/C) are obtained by varying the following economic parameters: fossil fuel average prices, discount rates and capital costs evolution as an expression of technological change. For present technical and economic conditions, the B/C ratio of the official scenario is more economically favorable than that of the transition and the transition is more favorable than the base scenario. Also, the viability of the transition scenario increases rapidly when technological change is taken into consideration.     

Time-dependent opportunities in energy business: A comparative study of locally available renewable and conventional fuels

This work investigates and compares energy-related, private business strategies, potentially interesting for investors willing to exploit either local biomass sources or strategic conventional fuels. Two distinct fuels and related power-production technologies are compared as a case study, in terms of economic efficiency: the biomass of cotton stalks and the natural gas. The carbon capture and storage option are also investigated for power plants based on both fuel types. The model used in this study investigates important economic aspects using a “real options” method instead of traditional Discounted Cash Flow techniques, as it might handle in a more effective way the problems arising from the stochastic nature of significant cash flow contributors’ evolution like electricity, fuel and CO₂ allowance prices. The capital costs have also a functional relationship with time, thus providing an additional reason for implementing “real options” as well as the learning-curves technique. The methodology as well as the results presented in this work, may lead to interesting conclusions and affect potential private investment strategies and future decision making. This study indicates that both technologies lead to positive investment yields, with the natural gas being more profitable for the case study examined, while the carbon capture and storage does not seem to be cost efficient with the current CO₂ allowance prices. Furthermore, low interest rates might encourage potential investors to wait before actualising their business plans while higher interest rates favor immediate investment decisions.     

Baseload wind energy: modeling the competition between gas turbines and compressed air energy storage for supplemental generation

The economic viability of producing baseload wind energy was explored using a cost-optimization model to simulate two competing systems: wind energy supplemented by simple- and combined cycle natural gas turbines (“wind+gas”), and wind energy supplemented by compressed air energy storage (“wind+CAES”). Pure combined cycle natural gas turbines (“gas”) were used as a proxy for conventional baseload generation. Long-distance electric transmission was integral to the analysis. Given the future uncertainty in both natural gas price and greenhouse gas (GHG) emissions price, we introduced an effective fuel price, p_NGeff, being the sum of the real natural gas price and the GHG price. Under the assumption of p_NGeff=$5/GJ (lower heating value), 650 W/m² wind resource, 750 km transmission line, and a fixed 90% capacity factor, wind+CAES was the most expensive system at ¢6.0/kWh, and did not break even with the next most expensive wind+gas system until p_NGeff=$9.0/GJ. However, under real market conditions, the system with the least dispatch cost (short-run marginal cost) is dispatched first, attaining the highest capacity factor and diminishing the capacity factors of competitors, raising their total cost. We estimate that the wind+CAES system, with a greenhouse gas (GHG) emission rate that is one-fourth of that for natural gas combined cycle plants and about one-tenth of that for pulverized coal plants, has the lowest dispatch cost of the alternatives considered (lower even than for coal power plants) above a GHG emissions price of $35/tC_equiv., with good prospects for realizing a higher capacity factor and a lower total cost of energy than all the competing technologies over a wide range of effective fuel costs. This ability to compete in economic dispatch greatly boosts the market penetration potential of wind energy and suggests a substantial growth opportunity for natural gas in providing baseload power via wind+CAES, even at high natural gas prices.     

Thermo-economic comparative analysis of solar-assisted and carbon capture integrated conventional cogeneration plant of power and process steam

A thermo-economic comparative analysis of steam production using a solar-assisted cogeneration (SACG) and a conventional cogeneration plant (CCG) with and without carbon capture systems has been conducted. The plants considered to produce electricity and process steam of 500 ton/h. Several parametric studies were carried out on the effect of natural gas price, steam quality, gas turbine capacity and solar multiples (SMs) on the Levelized cost of steam (LCS). Results show that in a CCG plant that comprises a 20 MWe gas turbine, the LCS is $8.11/ton of steam and $3.61/ton of steam from a plant with 100 MWe gas turbine capacity for a natural gas price of $3/GJ. The cost analysis of SACG plant with SM of 0.1 shows that 28% of the total annualized costs are solar system related while it contributed only about 9.17% of the annual steam generation. An increase in SM from 0.1 to 0.9 increases the CO₂ avoidance from 61 to 262 ktons/annum for the SACG plant with 20 MWe gas turbine. CCG plants with CO₂ capture technologies were found to have lower LCS in comparison with that of SACG plant. The impact of carbon credit implementation on the LCS has been also investigated and reported in this article.     

Assessment of demand for natural gas from the electricity sector in India

Electricity sector is among the key users of natural gas. The sustained electricity deficit and environment policies have added to an already rising demand for gas. This paper tries to understand gas demand in future from electricity sector. This paper models the future demand for gas in India from the electricity sector under alternative scenarios for the period 2005–2025, using bottom-up ANSWER MARKAL model. The scenarios are differentiated by alternate economic growth projections and policies related to coal reforms, infrastructure choices and local environment. The results across scenarios show that gas competes with coal as a base-load option if price difference is below US $ 4 per MBtu. At higher price difference gas penetrates only the peak power market. Gas demand is lower in the high economic growth scenario, since electricity sector is more flexible in substitution of primary energy. Gas demand reduces also in cases when coal supply curve shifts rightwards such as under coal reforms and coal-by-wire scenarios. Local environmental (SO₂ emissions) control promotes end of pipe solutions flue gas de-sulfurisation (FGD) initially, though in the longer term mitigation happens by fuel substitution (coal by gas) and introduction of clean coal technologies integrated gasification combined cycle (IGCC).     

Achieving California's 80% greenhouse gas reduction target in 2050: Technology,policy and scenario analysis using CA-TIMES energy economic systems model

The CA-TIMES optimization model of the California Energy System (v1.5) is used to understand how California can meet the 2050 targets for greenhouse gas (GHG) emissions (80% below 1990 levels). This model represents energy supply and demand sectors in California and simulates the technology and resource requirements needed to meet projected energy service demands. The model includes assumptions on policy constraints, as well as technology and resource costs and availability. Multiple scenarios are developed to analyze the changes and investments in low-carbon electricity generation, alternative fuels and advanced vehicles in transportation, resource utilization, and efficiency improvements across many sectors. Results show that major energy transformations are needed but that achieving the 80% reduction goal for California is possible at reasonable average carbon reduction cost ($9 to $124/tonne CO₂e at 4% discount rate) relative to a baseline scenario. Availability of low-carbon resources such as nuclear power, carbon capture and sequestration (CCS), biofuels, wind and solar generation, and demand reduction all serve to lower the mitigation costs, but CCS is a key technology for achieving the lowest mitigation costs.     

Greenhouse gases (GHG) emissions reduction in a power system predominantly based on lignite

In this paper the GHG mitigation potential of a power system with prevailing use of lignite is assessed through the example of the Macedonian power system. The analysis is conducted using the WASP model in order to develop three different scenarios (business as usual - BAU and two mitigation scenarios) for the power system expansion over the period 2008-2025. In the first mitigation scenario two gas power plants with combined cycle are planned to replace some of the lignite-based capacities. The second mitigation scenario, besides the gas power plants, assumes electricity consumption reduction related to the large industrial consumers and an increased share of new renewable energy sources. Detailed calculations of the GHG emissions are made for all scenarios. The comparison of emissions in 2025 and in 2008 shows that the increase of 78% in the case of predominantly lignite BAU scenario is reduced to 41% by the first mitigation scenario, and to 14% by the second mitigation scenario. The mitigation costs appeared to be less then 10 $/t CO₂-eq for the first mitigation scenario, and even negative for the second one.     

Lower electricity prices and greenhouse gas emissions due to rooftop solar: empirical results for Massachusetts

Monthly and hourly correlations among photovoltaic (PV) capacity utilization, electricity prices, electricity consumption, and the thermal efficiency of power plants in Massachusetts reduce electricity prices and carbon emissions beyond average calculations. PV utilization rates are highest when the thermal efficiencies of natural gas fired power plants are lowest, which reduces emissions of CO₂ and CH₄ by 0.3% relative to the annual average emission rate. There is a positive correlation between PV utilization rates and electricity prices, which raises the implied price of PV electricity by up to 10% relative to the annual average price, such that the average MWh reduces electricity prices by $0.26–$1.86 per MWh. These price reductions save Massachusetts rate-payers $184 million between 2010 and 2012. The current and net present values of these savings are greater than the cost of solar renewable energy credits which is the policy instrument that is used to accelerate the installation of PV capacity. Together, these results suggest that rooftop PV is an economically viable source of power in Massachusetts even though it has not reached socket parity.     

Inserting renewable fuels and technologies for transport in Mexico City Metropolitan Area

This article describes three future scenarios for the potential reduction of CO₂ emissions and associated costs when biogenic ethanol blends and oxygenates are substituted for gasoline, and hybrid, flex fuel and fuel cell technologies are introduced in passenger automobiles (including pickups and sport-utility vehicles (SUVs)) in the densely populated Mexico City Metropolitan Area (MCMA), analyzed up to the year 2030. A reference (REF) scenario is constructed in which most automobiles are driven by internal combustion engines (ICE) fuelled by gasoline. In the first alternative scenario (ALT1), hybrid electric-ICE gasoline-fuelled cars are introduced in 2006. In the same year, ethyl tertiary butyl ether (ETBE) is introduced as a replacement for methyl tertiary butyl ether (MTBE) oxygenate for gasoline. In the second alternative scenario (ALT2), in addition to the changes introduced in ALT1, flex fuel ICE technology fuelled by E85 is introduced in 2008 and electric motor vehicles driven by direct ethanol fuel cells (DEFC) fuelled by E100 in 2013. A comparison between the reference and alternate scenarios shows that while the total number of vehicles is the same in each scenario, energy consumption decreases by 9% (ALT1) and 17% (ALT2), the total non-biogenic CO₂ emissions drop by 15% (ALT1) and 34% (ALT2), CO₂ mitigation cost is 140.14 $US1997/ton CO₂ (ALT2), and ALT1 has savings and is considered a “no regrets” scenario.     

Comparing least cost scenarios for 100% renewable electricity with low emission fossil fuel scenarios in the Australian National Electricity Market

Policy makers face difficult choices in planning to decarbonise their electricity industries in the face of significant technology and economic uncertainties. To this end we compare the projected costs in 2030 of one medium-carbon and two low-carbon fossil fuel scenarios for the Australian National Electricity Market (NEM) against the costs of a previously published scenario for 100% renewable electricity in 2030. The three new fossil fuel scenarios, based on the least cost mix of baseload and peak load power stations in 2010, are: (i) a medium-carbon scenario utilising only gas-fired combined cycle gas turbines (CCGTs) and open cycle gas turbines (OCGTs); (ii) coal with carbon capture and storage (CCS) plus peak load OCGT; and (iii) gas-fired CCGT with CCS plus peak load OCGT. We perform sensitivity analyses of the results to future carbon prices, gas prices, and CO₂ transportation and storage costs which appear likely to be high in most of Australia. We find that only under a few, and seemingly unlikely, combinations of costs can any of the fossil fuel scenarios compete economically with 100% renewable electricity in a carbon constrained world. Our findings suggest that policies pursuing very high penetrations of renewable electricity based on commercially available technology offer a cost effective and low risk way to dramatically cut emissions in the electricity sector.