Evaluation of micro‐scale electricity generation cost using biomass‐derived synthetic gas through modeling

A promising renewable energy technology is electricity generated with biomass‐derived synthetic gas (syngas). The economic feasibility of using biomass gasification for generating electrical power is very much dependent on the cost of the power plant and the cost of its operation. A cost model was developed to analyze the Unit Cost (unit‐cost) of electricity generation from micro‐scale power facilities that used biomass gasification as its energy input. The costs considered in the model were capital cost and operating costs. The results from the modeling indicated that operating cost was a major part of the total annual production cost of electricity generation, and that labor was the largest part of the total annual production cost of operation, and it was during the time when the power facilities operated at lower generation capacity levels. One effective way of reducing the unit‐cost was to operate the facility at high capacity level. The study found that when the capacity level increased the total of annual cost was also increased, but the electricity unit‐cost decreased markedly. For a given level of generating capacity, the electricity unit‐cost of the facility operating at a two or three shifts operating mode was significantly lower than that of one shift operating mode. Copyright © 2010 John Wiley & Sons, Ltd.     

Integration of water electrolysis for fossil-free steel production

This study investigates the integration of water electrolysis technologies in fossil-free steelmaking via the direct reduction of iron ore followed by processing in an electric arc furnace (EAF). Hydrogen (H₂) production via low or high temperature electrolysis (LTE and HTE) is considered for the production of carbon-free direct reduced iron (DRI). The introduction of carbon into the DRI reduces the electricity demand of the EAF. Such carburization can be achieved by introducing carbon monoxide (CO) into the direct reduction process. Therefore, the production of mixtures of H₂ and CO using either a combination of LTE coupled with a reverse water-gas shift reactor (rWGS-LTE) or high-temperature co-electrolysis (HTCE) was also investigated. The results show that HTE has the potential to reduce the specific electricity consumption (SEC) of liquid steel (LS) production by 21% compared to the LTE case. Nevertheless, due to the high investment cost of HTE units, both routes reach similar LS production costs of approximately 400 €/tonne LS. However, if future investment cost targets for HTE units are reached, a production cost of 301 €/tonne LS is attainable under the conditions given in this study. For the production of DRI containing carbon, a higher SEC is calculated for the LTE-rWGS system compared to HTCE (4.80 vs. 3.07 MWh/tonne LS). Although the use of HTCE or LTE-rWGS leads to similar LS production costs, future cost reduction of HTCE could result in a 10% reduction in LS production cost (418 vs. 375 €/tonne LS). We show that the use of HTE, either for the production of pure H₂ or H₂ and CO mixtures, may be advantageous compared to the use of LTE in H₂-based steelmaking, although results are sensitive to electrolyzer investment costs, efficiencies, and electricity prices.     

Optimal blackouts: Empirical results on reducing the social cost of electricity outages through efficient regional rationing

The demand and supply of electricity must always balance. If supply falls short of demand, then price increases or voluntary demand reductions might help to maintain the balance in the system. Should these prove insufficient, then rationing is necessary. Rationing means interrupting the electricity delivery to certain areas or specific electricity users in order to preserve system stability. Since the cost of an interruption differs among electricity users, the social cost of different rationing mechanisms varies. This paper explores the cost difference between efficient regional rationing (minimizing social costs by rationing regions with low costs first) and random rationing (not taking into account social costs). For this the value of lost load calculations of De Nooij et al. [De Nooij, M., Bijvoet, C.C., Koopmans, C.C., (2007). The value of supply security: The costs of power interruptions: Economic input for damage reduction and investment in networks. Energy Economics, 29 (2), 277–295.] are refined. For the Netherlands, it is shown that efficient rationing can reduce social costs by 42 to 93%.     

The real costs of nuclear power in the UK

The UK Central Electricity Generating Board (CEGB) has recently published figures which appear to show that nuclear generated electricity is 20% cheaper than electricity from coal stations. However, argues Professor J.W. Jeffery, these figures cannot be used to make a case for nuclear power since they are based on an accounting convention which fails to give due consideration to inflation. In effect the convention used assumes that capital costs are paid in depreciated currency and become an artificially small part of total operating costs. By suitably adjusting the CEGB figures he aims to provide a more realistic comparison of generating costs.     

A stochastic‐fuzzy programming model with soften constraints for electricity generation planning with greenhouse‐gas abatement

Increased atmospheric CO₂ concentration is widely being considered as the main driving factor that causes the phenomenon of global warming, due to the ever‐boosting use of fossil fuels. In this study, a fuzzy‐stochastic programming model with soft constraints (FSP‐SC) is developed for electricity generation planning and greenhouse gas (GHG) abatement in an environment with imprecise and probabilistic information. The developed FSP‐SC is applied to a case study of long‐term planning of a regional electricity generation system, where integer programming technique is employed to facilitate dynamic analysis for capacity expansion within a multi‐period context to satisfy increasing electricity demand. The results indicate different relaxation levels can lead to changed electricity generation options, capacity expansion schemes, system costs, and GHG emissions. Several sensitivity analyses are also conducted to demonstrate that relaxation of different constraints have different effects on system cost and GHG emission. Tradeoffs among system costs, resource availabilities, GHG emissions, and electricity‐shortage risks can also be tackled with the relaxation levels for the objective and constraints. Copyright © 2012 John Wiley & Sons, Ltd.     

Economic comparison between coal-fired and liquefied natural gas combined cycle power plants considering carbon tax: Korean case

Economic growth is main cause of environmental pollution and has been identified as a big threat to sustainable development. Considering the enormous role of electricity in the national economy, it is essential to study the effect of environmental regulations on the electricity sector. This paper aims at making an economic analysis of Korea's power plant utilities by comparing electricity generation costs from coal-fired power plants and liquefied natural gas (LNG) combined cycle power plants with environmental consideration. In this study, the levelized generation cost method (LGCM) is used for comparing economic analysis of power plant utilities. Among the many pollutants discharged during electricity generation, this study principally deals with control costs related only to CO₂ and NO₂, since the control costs of SO₂ and total suspended particulates (TSP) are already included in the construction cost of utilities. The cost of generating electricity in a coal-fired power plant is compared with such cost in a LNG combined cycle power plant. Moreover, a sensitivity analysis with computer simulation is performed according to fuel price, interest rates and carbon tax. In each case, these results can help in deciding which utility is economically justified in the circumstances of environmental regulations.     

ACROPOLIS: An example of international collaboration in the field of energy modelling to support greenhouse gases mitigation policies

Energy models are considered as valuable tools to assess the impact of various energy and environment policies. The ACROPOLIS initiative, supported by the European Commission and the International Energy Agency, used up to 15 energy models to simulate and evaluate selected policy measures and instruments and then compare their impacts on energy systems essentially in terms of costs of greenhouse gas emissions (GHG) reduction and energy technology choice. Four case studies are formulated considering policies and measures on renewable portfolio schemes and internationally tradable green certificates, emissions trading and global GHG abatement target, energy efficiency standards and internalisation of external costs. The main focus of the project is on the electricity sector. From a large set of quantified results, ACROPOLIS provides an international scientific consensus, on some key issues, which could be useful in assessing and designing energy and environment policies at the world, European and national/regional levels. It concludes that the Kyoto targets (and their continuation beyond 2010 in specific scenarios) could be achieved at a cost around 1% of GDP through global emissions trading, indicating also that this flexibility mechanism is a more cost-effective instrument for GHG mitigation than meeting the goal domestically without trade. It demonstrates that internalising external costs through a price increase reduces local pollutants (SO_x, NO_x, and others) and it produces other benefits such as triggering the penetration of clean technologies in addition to the curbing of CO₂ emissions.     

The role of energy storage in accessing remote wind resources in the Midwest

Replacing current generation with wind energy would help reduce the emissions associated with fossil fuel electricity generation. However, integrating wind into the electricity grid is not without cost. Wind power output is highly variable and average capacity factors from wind farms are often much lower than conventional generators. Further, the best wind resources with highest capacity factors are often located far away from load centers and accessing them therefore requires transmission investments. Energy storage capacity could be an alternative to some of the required transmission investment, thereby reducing capital costs for accessing remote wind farms. This work focuses on the trade-offs between energy storage and transmission. In a case study of a 200 MW wind farm in North Dakota to deliver power to Illinois, we estimate the size of transmission and energy storage capacity that yields the lowest average cost of generating and delivering electricity ($/MW h) from this farm. We find that transmission costs must be at least $600/MW-km and energy storage must cost at most $100/kW h in order for this application of energy storage to be economical.     

Risk hedging against the fuel price fluctuation in energy service business

Energy service business, or energy service company (ESCO), is expanding among industrial users as a means of energy saving. The ESCO business normally tends to become a long-term operation. During the operation, fluctuations of fuel and electricity costs significantly impact on the stability of the profit from ESCO business. Therefore, it is essential to reduce the risk of fuel and electricity cost fluctuations. Generally, a transaction called “financial derivative” is used as a measure of hedging against the fuel price fluctuation. In the case of ESCO business, it is necessary to manage the risk of both electricity and fuel price fluctuations because the variation in electricity price strongly affects the profit from ESCO as that in fuel price does.     

The impact of ICT investment and energy price on industrial electricity demand: Dynamic growth model approach

The authors investigate the effects of information and communications technology (ICT) investment, electricity price, and oil price on the consumption of electricity in South Korea's industries using a logistic growth model. The concept electricity intensity is used to explain electricity consumption patterns. An empirical analysis implies that ICT investment in manufacturing industries that normally consume relatively large amounts of electricity promotes input factor substitution away from the labor intensive to the electricity intensive. Moreover, results also suggest that ICT investment in some specific manufacturing sectors is conducive to the reduction of electricity consumption, whereas ICT investment in the service sector and most manufacturing sectors increases electricity consumption. It is concluded that electricity prices critically affect electricity consumption in half of South Korea's industrial sectors, but not in the other half, a finding that differs somewhat from previous research results. Reasons are suggested to explain why the South Korean case is so different. Policymakers may find this study useful, as it answers the question of whether ICT investment can ultimately reduce energy consumption and may aid in planning the capacity of South Korea's national electric power.     

Thermo-economic analysis and optimization of the very high temperature gas-cooled reactor-based nuclear hydrogen production system using copper-chlorine cycle

An improved very high temperature gas-cooled reactor (VHTR) and copper-chlorine (Cu–Cl) cycle-based nuclear hydrogen production system is proposed and investigated in this paper, in order to reveal the unknown thermo-economic characteristics of the system under variable operating conditions. Energy, exergy and economic analysis method and particle swarm optimization algorithm are used to model and optimize the system, respectively. Parametric analysis of the effects of several key operating parameters on the system performance is conducted, and energy loss, exergy loss, and investment cost distributions of the system are discussed under three typical production modes. Results show that increasing the reactor subsystem pressure ratio can enhance the system's thermo-economic performance, and the total efficiencies and cost of producing compressed hydrogen from nuclear energy are respectively lower and higher than that of generating electricity. When the system operates at the maximum hydrogen production rate of 403.1 mol/s, the system's net electrical power output, thermal efficiency, exergy efficiency, and specific energy cost are found to be 38.77 MW, 39.3%, 41.26%, and 0.0731 $/kW·h, respectively. And when the system's hydrogen production load equals to 0, these values are respectively calculated to be 177.25 MW, 50.64%, 53.29%, and 0.0268 $/kW·h. In addition, more than 90% of the system's total energy losses are caused by condenser and Cu–Cl cycle, and about 50–60% of the system's total exergy destructions occur in VHTR. About 60% and 30% of the system's specific energy cost are respectively caused by the equipment investment and the system operation & maintenance, and the investment costs of VHTR and Cu–Cl plant are the system's main capital investment sources.     

Introducing technology learning for energy technologies in a national CGE model through soft links to global and national energy models

This paper describes a method to model the influence by global policy scenarios, particularly spillover of technology learning, on the energy service demand of the non-energy sectors of the national economy. It is exemplified by Norway. Spillover is obtained from the technology-rich global Energy Technology Perspective model operated by the International Energy Agency. It is provided to a national hybrid model where a national bottom-up Markal model carries forward spillover into a national top-down CGE¹ model at a disaggregated demand category level. Spillover of technology learning from the global energy technology market will reduce national generation costs of energy carriers. This may in turn increase demand in the non-energy sectors of the economy because of the rebound effect. The influence of spillover on the Norwegian economy is most pronounced for the production level of industrial chemicals and for the demand for electricity for residential energy services. The influence is modest, however, because all existing electricity generating capacity is hydroelectric and thus compatible with the low emission policy scenario. In countries where most of the existing generating capacity must be replaced by nascent energy technologies or carbon captured and storage the influence on demand is expected to be more significant.     

Designing effective and efficient incentive policies for renewable energy in generation expansion planning

We present a bilevel optimization approach to designing effective and efficient incentive policies for stimulating investment in renewable energy. The effectiveness of an incentive policy is its capability to achieve a goal that would not be achievable without it. Renewable portfolio standards are used in this paper as the policy goal. The efficiency of an incentive policy is measured by the amount of policy intervention, such as taxes collected or subsidies paid, to achieve the policy goal. We obtain the most effective and efficient incentive policies in the context of generation expansion planning, in which a centralized planner makes investment decisions for the energy system to serve projected demand of electricity. A case study is conducted on integrated coal transportation and electricity transmission networks representing the contiguous United States. The numerical analysis from the case study provides insights on the comparison of various incentive policies. The sensitivity of the incentive policies with respect to coal production cost, wind energy investment cost, and transmission capacity is also studied.     

Financial analysis of an installed small scale seasonal thermal energy store

The financial viability of an installed solar heating system incorporating a Seasonal Thermal Energy Store (STES) for a house constructed to the low-energy Passivhaus standard is analysed. Details are provided of system costs and the recorded performance for the installation which is located in Galway, Ireland, a location which experiences a Temperate Maritime Climate. Using these figures, a financial Life Cycle Analysis has been undertaken to determine the cost effectiveness of the system in providing space heating and domestic hot water.As part of the life cycle cost analysis the effect of the treatment of the terminal value of the STES was considered. The analysis shows that irrespective of the terminal value attached to the STES, the use of solar thermal energy in combination with an STES offered a more favourable business case than the use of electricity for DHW and space heating over the 40 year time period considered. This shows that a direct space heating and DHW system incorporating STES can be economically viable in a Temperate Maritime Climate in the long term.     

Integration of wind power into the British system in 2020

This paper investigates the integration of renewable electricity into the UK system in 2020. The purpose is to find the optimal wind generation that can be integrated based on total cost of supply. Using EnergyPLAN model and the Department of Energy and Climate Change (DECC) energy projections as inputs, this paper simulates the total cost of electricity supply with various levels of wind generation considering two systems: a reference and an alternative system. The results show that 80 TWh of wind electricity is most preferable in both systems, saving up to 0.9% of total cost when compared to a conventional system without wind electricity production. The alternative system, with decentralized generation and active demand management, brings relatively more cost saving, and higher wind utilisation, compared to the reference case. The sensitivity analysis with alternative fuel and capital costs again confirms the superiority of the alternative over the reference system.     

Exergy-based method for analyzing the composition of the electricity cost generated in gas-fired combined cycle plants

The proposed method to analyze the composition of the cost of electricity is based on the energy conversion processes and the destruction of the exergy through the several thermodynamic processes that comprise a combined cycle power plant. The method uses thermoeconomics to evaluate and allocate the cost of exergy throughout the processes, considering costs related to inputs and investment in equipment. Although the concept may be applied to any combined cycle or cogeneration plant, this work develops only the mathematical modeling for three-pressure heat recovery steam generator (HRSG) configurations and total condensation of the produced steam. It is possible to study any n×1 plant configuration (n sets of gas turbine and HRSGs associated to one steam turbine generator and condenser) with the developed model, assuming that every train operates identically and in steady state. The presented model was conceived from a complex configuration of a real power plant, over which variations may be applied in order to adapt it to a defined configuration under study [Borelli SJS. Method for the analysis of the composition of electricity costs in combined cycle thermoelectric power plants. Master in Energy Dissertation, Interdisciplinary Program of Energy, Institute of Eletro-technical and Energy, University of São Paulo, São Paulo, Brazil, 2005 (in Portuguese)]. The variations and adaptations include, for instance, use of reheat, supplementary firing and partial load operation. It is also possible to undertake sensitivity analysis on geometrical equipment parameters.     

Evaluation of negative environmental impacts of electricity generation: Neoclassical and institutional approaches

Neoclassical and institutional economics have developed different theories and methodologies for evaluating environmental and social impacts of electricity generation. The neoclassical approach valuates external costs, and the institutional approach uses social cost valuation and MCDM methods. This paper focuses on three dimensions: theoretical and methodological backgrounds; critical review of specific studies: methodologies, results, and limitations; and discussing their results and implications for environmental policy and further research. The two approaches lead to a common conclusion that fossil fuels and nuclear power show the highest environmental impact. Despite the common conclusion, the conclusion has limited implications for environmental policy because of the weakness of their methodologies.     

Electricity generation cost in isolated system: The complementarities of natural gas and renewables in the Canary Islands

The Canary Islands offer an example of an isolated electric grid of relative important size within the EU. Due to its peculiarities, the role of renewable energies and their complementarity with fossil fuels offers a solid path to achieving the main energy policy goals of the Islands. The purpose of this paper is to assess the current situation and the energy objectives proposed in the Energy Plan of the Canaries (PECAN, 2006) for the electricity industry, taking into account the average cost and the risk associated with the different alternatives for generating electricity by means of the Mean–Variance Portfolio Theory. Our analysis highlights the inefficiency of the current electricity generating mix in terms of cost, risk and lack of diversification. Shifting toward an efficient system would involve optimizing the use of endogenous energy sources and introducing natural gas to generate electricity. This scenario would mean reducing both cost and risk by almost 30% each, as well as atmospheric CO₂ emissions. Our results agree with the PECAN philosophy.     

Life cycle assessment study of solar PV systems: An example of a 2.7 kWp distributed solar PV system in Singapore

In life cycle assessment (LCA) of solar PV systems, energy pay back time (EPBT) is the commonly used indicator to justify its primary energy use. However, EPBT is a function of competing energy sources with which electricity from solar PV is compared, and amount of electricity generated from the solar PV system which varies with local irradiation and ambient conditions. Therefore, it is more appropriate to use site-specific EPBT for major decision-making in power generation planning. LCA and life cycle cost analysis are performed for a distributed 2.7 kW_p grid-connected mono-crystalline solar PV system operating in Singapore. This paper presents various EPBT analyses of the solar PV system with reference to a fuel oil-fired steam turbine and their greenhouse gas (GHG) emissions and costs are also compared. The study reveals that GHG emission from electricity generation from the solar PV system is less than one-fourth that from an oil-fired steam turbine plant and one-half that from a gas-fired combined cycle plant. However, the cost of electricity is about five to seven times higher than that from the oil or gas fired power plant. The environmental uncertainties of the solar PV system are also critically reviewed and presented.