Using renewables to hedge against future electricity industry uncertainties—An Australian case study

A generation portfolio modelling was employed to assess the expected costs, cost risk and emissions of different generation portfolios in the Australian National Electricity Market (NEM) under highly uncertain gas prices, carbon pricing policy and electricity demand. Outcomes were modelled for 396 possible generation portfolios, each with 10,000 simulations of possible fuel and carbon prices and electricity demands. In 2030, the lowest expected cost generation portfolio includes 60% renewable energy. Increasing the renewable proportion to 75% slightly increased expected cost (by $0.2/MWh), but significantly decreased the standard deviation of cost (representing the cost risk). Increasing the renewable proportion from the present 15% to 75% by 2030 is found to decrease expected wholesale electricity costs by $17/MWh. Fossil-fuel intensive portfolios have substantial cost risk associated with high uncertainty in future gas and carbon prices. Renewables can effectively mitigate cost risk associated with gas and carbon price uncertainty. This is found to be robust to a wide range of carbon pricing assumptions. This modelling suggests that policy mechanisms to promote an increase in renewable generation towards a level of 75% by 2030 would minimise costs to consumers, and mitigate the risk of extreme electricity prices due to uncertain gas and carbon prices.     

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.     

Power sector scenarios for Thailand: An exploratory analysis 2002–2022

Power sector scenarios for Thailand are constructed in this paper to represent the range of opportunities and constraints associated with divergent set of technical and policy options. They include Business-As-Usual (BAU), No-New-Coal (NNC), and Green Futures (GF) scenarios over a 20-year period (2002–2022). The results from the BAU scenario show that fossil fuels will continue to dominate electricity generation in Thailand during the study period. Similar results are obtained for the NNC option, although the dependence shifts from coal and oil towards natural gas-based power generation. This may represent a better environmental pathway but an all out shift from coal to natural gas is likely to increase Thailand's dependence on imported fuel, making it more vulnerable to unstable global oil and gas prices. The GF scenario offers a more optimistic route that allows the country to confront its energy security dilemma whilst fulfilling its environmental commitments by giving renewable energy technologies a prominent place in the country's power generation mix. Over the study period, our result showed little difference between the three scenarios in terms of financing new generation plants despite an early misgiving about the viability of an ambitious renewable energy programme. This paper also goes beyond the financial evaluation of each scenario to provide a comparison of the scenarios in terms of their greenhouse gas emissions together with the comparative costs of emissions reductions. Indeed, if such externalities are taken into account to determine ‘viability’, the GF scenario represents an attractive way forward for the Thai power sector.     

Greenhouse gas emissions reduction by use of wind and solar energies for hydrogen and electricity production: Economic factors

This study addresses economic aspects of introducing renewable technologies in place of fossil fuel ones to mitigate greenhouse gas emissions. Unlike for traditional fossil fuel technologies, greenhouse gas emissions from renewable technologies are associated mainly with plant construction and the magnitudes are significantly lower. The prospects are shown to be good for producing the environmentally clean fuel hydrogen via water electrolysis driven by renewable energy sources. Nonetheless, the cost of wind- and solar-based electricity is still higher than that of electricity generated in a natural gas power plant. With present costs of wind and solar electricity, it is shown that, when electricity from renewable sources replaces electricity from natural gas, the cost of greenhouse gas emissions abatement is about four times less than if hydrogen from renewable sources replaces hydrogen produced from natural gas. When renewable-based hydrogen is used in a fuel cell vehicle instead of gasoline in a IC engine vehicle, the cost of greenhouse gas emissions reduction approaches the same value as for renewable-based electricity only if the fuel cell vehicle efficiency exceeds significantly (i.e., by about two times) that of an internal combustion vehicle. It is also shown that when 6000 wind turbines (Kenetech KVS-33) with a capacity of 350 kW and a capacity factor of 24% replace a 500-MW gas-fired power plant with an efficiency of 40%, annual greenhouse gas emissions are reduced by 2.3 megatons. The incremental additional annual cost is about $280 million (US). The results provide a useful approach to an optimal strategy for greenhouse gas emissions mitigation.     

New nuclear power generation in the UK: Cost benefit analysis

This paper provides an economic analysis of possible nuclear new build in the UK. It compares costs and benefits of nuclear new build against conventional gas-fired generation and low carbon technologies (CCS, wind, etc.). A range of scenarios are considered to allow for uncertainty as regards nuclear and other technology costs, gas prices and carbon prices.     

Emissions reduction scenarios in the Argentinean Energy Sector

In this paper the LEAP, TIAM-ECN, and GCAM models were applied to evaluate the impact of a variety of climate change control policies (including carbon pricing and emission constraints relative to a base year) on primary energy consumption, final energy consumption, electricity sector development, and CO₂ emission savings of the energy sector in Argentina over the 2010–2050 period. The LEAP model results indicate that if Argentina fully implements the most feasible mitigation measures currently under consideration by official bodies and key academic institutions on energy supply and demand, such as the ProBiomass program, a cumulative incremental economic cost of 22.8 billion US$(2005) to 2050 is expected, resulting in a 16% reduction in GHG emissions compared to a business-as-usual scenario. These measures also bring economic co-benefits, such as a reduction of energy imports improving the balance of trade. A Low CO₂ price scenario in LEAP results in the replacement of coal by nuclear and wind energy in electricity expansion. A High CO₂ price leverages additional investments in hydropower. By way of cross-model comparison with the TIAM-ECN and GCAM global integrated assessment models, significant variation in projected emissions reductions in the carbon price scenarios was observed, which illustrates the inherent uncertainties associated with such long-term projections. These models predict approximately 37% and 94% reductions under the High CO₂ price scenario, respectively. By comparison, the LEAP model, using an approach based on the assessment of a limited set of mitigation options, predicts an 11.3% reduction. The main reasons for this difference include varying assumptions about technology cost and availability, CO₂ storage capacity, and the ability to import bioenergy. An emission cap scenario (2050 emissions 20% lower than 2010 emissions) is feasible by including such measures as CCS and Bio CCS, but at a significant cost. In terms of technology pathways, the models agree that fossil fuels, in particular natural gas, will remain an important part of the electricity mix in the core baseline scenario. According to the models there is agreement that the introduction of a carbon price will lead to a decline in absolute and relative shares of aggregate fossil fuel generation. However, predictions vary as to the extent to which coal, nuclear and renewable energy play a role.     

Integrated MAED–MARKAL-based analysis of future energy scenarios of Nepal

This paper employs an integrated model for analysis of energy demand and MARKet ALlocation modelling framework for assessing different pathways for the development of energy systems of Nepal. Four energy scenarios are analysed with the time horizon from 2010 to 2030. With high electrification and energy efficiency and demand-side management, the analysis reveals that all three major goals of sustainable energy for all can be achieved by 2030, but that the total discounted systems costs required account for three times the costs of the reference scenario. In the policy scenario, net fuel import costs and greenhouse gas emissions will decline by 20% and 35%, respectively and the share of renewable energy will increase from 3% in 2010 to 22% in 2030. The analysis provides insights for selecting a better pathway for the sustainable energy development and energy security of the country.     

Grid integration of intermittent renewable energy sources using price-responsive plug-in electric vehicles

Plug-in electric vehicles (PEVs) are expected to balance the fluctuation of renewable energy sources (RES). To investigate the contribution of PEVs, the availability of mobile battery storage and the control mechanism for load management are crucial. This study therefore combined the following: a stochastic model to determine mobility behavior, an optimization model to minimize vehicle charging costs and an agent-based electricity market equilibrium model to estimate variable electricity prices. The variable electricity prices are calculated based on marginal generation costs. Hence, because of the merit order effect, the electricity prices provide incentives to consume electricity when the supply of renewable generation is high. Depending on the price signals and mobility behavior, PEVs calculate a cost minimizing charging schedule and therefore balance the fluctuation of RES. The analysis shows that it is possible to limit the peak load using the applied control mechanism. The contribution of PEVs to improving the integration of intermittent renewable power generation into the grid depends on the characteristic of the RES generation profile. For the German 2030 scenario used here, the negative residual load was reduced by 15–22% and the additional consumption of negative residual load was between 34 and 52%.     

Representation of variable renewable energy sources in TIMER,an aggregated energy system simulation model

The power system is expected to play an important role in climate change mitigation. Variable renewable energy (VRE) sources, such as wind and solar power, are currently showing rapid growth rates in power systems worldwide, and could also be important in future mitigation strategies. It is therefore important that the electricity sector and the integration of VRE are correctly represented in energy models. This paper presents an improved methodology for representing the electricity sector in the long-term energy simulation model TIMER using a heuristic approach to find cost optimal paths given system requirements and scenario assumptions. Regional residual load duration curves have been included to simulate curtailments, storage use, backup requirements and system load factor decline as the VRE share increases. The results show that for the USA and Western Europe at lower VRE penetration levels, backup costs form the major VRE cost markup. When solar power supplies more than 30% of the electricity demand, the costs of storage and energy curtailments become increasingly important. Storage and curtailments have less influence on wind power cost markups in these regions, as wind power supply is better correlated with electricity demand. Mitigation scenarios show an increasing VRE share in the electricity mix implying also increasing contribution of VRE for peak and mid load capacity. In the current scenarios, this can be achieved by at the same time installing less capital intensive gas fired power plants. Sensitivity analysis showed that greenhouse gas emissions from the electricity sector in the updated model are particularly sensitive to the availability of carbon capture and storage (CCS) and nuclear power and the costs of VRE.     

Optimized Integration of Renewable Energy Technologies Into Jordan's Power Plant Portfolio

Jordan has experienced a significant increase of peak load and annual electricity demand within the last years due to economic development and population growth. The experienced growth rates are expected to continue during the next decades, making large investments in new power plant capacity necessary. Additionally, when gas supply from Egypt was interrupted several times and crude oil world market prices increased simultaneously, recent years have shown painfully that a power supply exclusively based on fossil fuel imports is subject to a very high risk and can have a strong negative impact on the national budget. Electricity-sector authorities are therefore looking for suitable solutions to keep up with the increasing electricity demand, to make Jordan more independent from fossil fuel imports, and to provide electricity at reasonable prices in the future. This paper presents a methodology for the optimized integration of renewable energy (RE) technologies into Jordan's existing power plant portfolio. The core of the methodology is the mixed integer linear optimization program REMix-CEM, developed at the German Aerospace Center (DLR), which optimizes capacity expansion and unit commitment of RE and conventional power generation technologies simultaneously. After describing Jordan's electricity sector and the available RE resources, the developed methodology and the results are presented. The paper shows that by the year 2022, Jordan could generate at least 47% of its electricity demand by a well-balanced mix of concentrating solar power, utility-scale photovoltaics, and onshore wind power. This scenario would maintain the security of electricity supply, absorb present growth rates of power generation costs, and make Jordan significantly more independent of fossil fuel imports.     

Putting renewables and energy efficiency to work: How many jobs can the clean energy industry generate in the US?

An analytical job creation model for the US power sector from 2009 to 2030 is presented. The model synthesizes data from 15 job studies covering renewable energy (RE), energy efficiency (EE), carbon capture and storage (CCS) and nuclear power. The paper employs a consistent methodology of normalizing job data to average employment per unit energy produced over plant lifetime. Job losses in the coal and natural gas industry are modeled to project net employment impacts. Benefits and drawbacks of the methodology are assessed and the resulting model is used for job projections under various renewable portfolio standards (RPS), EE, and low carbon energy scenarios We find that all non-fossil fuel technologies (renewable energy, EE, low carbon) create more jobs per unit energy than coal and natural gas. Aggressive EE measures combined with a 30% RPS target in 2030 can generate over 4 million full-time-equivalent job-years by 2030 while increasing nuclear power to 25% and CCS to 10% of overall generation in 2030 can yield an additional 500,000 job-years.     

Elecxit: The cost of bilaterally uncoupling British-EU electricity trade

The UK's withdrawal from the European Union could mean that it leaves the EU's Internal Energy Market for electricity (Elecxit). This paper develops methods to study the longer-term consequences of this electricity market disintegration, especially the end of market coupling. Before European electricity markets were coupled, different market closing times forced traders to commit to cross-border trading volumes based on anticipated market prices. Interconnector capacity was often under-used, and power sometimes flowed from high- to low-price areas. A model of these market frictions is developed, empirically verified on 2009 data (before French and British market coupling) and applied to estimate the costs of market uncoupling in 2030. A less efficient market and the abandonment of some planned interconnectors would raise generation costs by €700 m a year (2%) compared to remaining in the Internal Energy Market. This result is sensitive to how the British and French electricity systems develop over the coming decades. Economic losses are four times greater (€2700 m a year) if France retains substantial nuclear capacity due to its low marginal costs. Conversely, losses are reduced by two-thirds if UK weakens its decarbonisation ambitions, as lower carbon prices subsidise British fossil fuel generation, allowing electricity prices to converge with those in France. A Hard Elecxit would make British prices rise and French prices fall in three of our four scenarios, with the opposite movements in the fourth scenario.     

Electricity consumption and CO2 capture potential in Spain

In this paper, different electricity demand scenarios for Spain are presented. Population, income per capita, energy intensity and the contribution of electricity to the total energy demand have been taken into account in the calculations. Technological role of different generation technologies, i.e. coal, nuclear, renewable, combined cycle (CC), combined heat and power (CHP) and carbon capture and storage (CCS), are examined in the form of scenarios up to 2050. Nine future scenarios corresponding to three electrical demands and three options for new capacity: minimum cost of electricity, minimum CO₂ emissions and a criterion with a compromise between CO₂ and cost (CO₂-cost criterion) have been proposed. Calculations show reduction in CO₂ emissions from 2020 to 2030, reaching a maximum CO₂ emission reduction of 90% in 2050 in an efficiency scenario with CCS and renewables. The contribution of CCS from 2030 is important with percentage values of electricity production around 22–28% in 2050. The cost of electricity (COE) increases up to 25% in 2030, and then this value remains approximately constant or decreases slightly.     

Cost effective integration of hydrogen in energy systems with CO2 constraints

The integration of hydrogen in national energy systems is illustrated in four extreme scenarios, reflecting four technological mainstreams (energy conservation, renewables, nuclear and CO₂ removal) to reduce C emissions. Hydrogen is cost-effective in all scenarios with higher CO₂ reduction targets. Hydrogen would be produced from fossil fuels, or from water and electricity or heat, depending upon the scenario. Hydrogen would be used in the residential and commercial sectors and for transport vehicles, industry, and electricity generation in fuel cells. At severe (50–70%) CO₂ reduction targets, hydrogen would cost-effectively supply more than half of the total useful energy demands in three out of four scenarios. The marginal emission reduction costs in the CO₂ removal scenario at severe CO₂ reduction targets are DFL 200/tCO₂ (ca $ 100/t). In the nuclear, renewable and energy conservation scenarios these costs are much higher. Whilst the fossil fuel scenario would be less expensive than the other scenarios, the possibility of CO₂ storage in depleted gas reservoirs is a conditio sine qua non.     

Price trends and volatility scenarios for designing forest sector transformation

Potential scenarios for the forest bioeconomy are heavily reliant on price assumptions; in particular, any abrupt changes in prices have a profound impact on the relevancy of any sector analysis. The objective of this paper was to demonstrate a new forest sector approach for incorporating price uncertainties in order to improve our assessment of investment decision making alternatives. Methodologically, we linked a multivariate generalized autoregressive conditional heteroscedasticity model (mGARCH (1,1)) with three global land use scenarios that are of strategic importance to the forest bioeconomy. The three scenarios were formulated as i) a business as usual scenario, ii) a high biomass usage scenario and iii) a no-growth scenario. Our results indicate an upward trend in prices over time for all three scenarios and for most woody biomass commodities. Under all scenarios, price volatility in the forest sector would be smaller than that for the fossil fuel energy (i.e. oil and natural gas). Price volatilities from fossil fuel markets are positively influencing woody biomass price volatility and positively influencing pulp volatility. These results are discussed in the context of a case study describing investment alternatives for a district heating facility with options for: woody biomass, natural gas, or heating oil.     

A scenario analysis of investment options for the Cuban power sector using the MARKAL model

The Cuban power sector faces a need for extensive investment in new generating capacity, under a large number of uncertainties regarding future conditions, including: rate of demand growth, fluctuations in fuel prices, access to imported fuel, and access to investment capital for construction of new power plants and development of fuel import infrastructure. To identify cost effective investment strategies under these uncertainties, a supply and power sector MARKAL model was assembled, following an extensive review of available data on the Cuban power system and resource potentials. Two scenarios were assessed, a business-as-usual (BAU) scenario assuming continued moderate electricity load growth and domestic fuel production growth, and a high growth (HI) scenario assuming rapid electricity demand growth, rapid increase in domestic fuel production, and a transition to market pricing of electricity. Within these two scenarios sets, sensitivity analyses were conducted on a number of variables. The implications of least-cost investment strategies for new capacity builds, investment spending requirements, electricity prices, fuel expenditures, and carbon dioxide emissions for each scenario were assessed. Natural gas was found to be the cost effective fuel for new generation across both scenarios and most sensitivity cases, suggesting that access to natural gas, through increased domestic production and LNG import, is a clear priority for further analysis in the Cuban context.     

An analysis of long-term scenarios for the transition to renewable energy in the Korean electricity sector

This paper analyzes the energy, environmental and economic influences of three electricity scenarios in Korea by 2050 using the “Long-range Energy Alternatives Planning system” (LEAP) model. The reference year was 2008. Scenarios include the baseline (BL), new governmental policy (GP) and sustainable society (SS) scenarios. The growth rate of electricity demand in the GP scenario was higher than that of the BL scenario while the growth rate in the SS scenario was lower than that of the BL scenario.Greenhouse gas emissions from electricity generation in 2050 in the BL and GP scenarios were similar with current emissions. However, emissions in 2050 in the SS scenario were about 80% lower than emissions in 2008, because of the expansion of renewable electricity in spite of the phase-out of nuclear energy.While nuclear and coal-fired power plants accounted for most of the electricity generated in the BL and GP scenarios in 2050, the SS scenario projected that renewable energy would generate the most electricity in 2050. It was found that the discounted cumulative costs from 2009 to 2050 in the SS scenario would be 20 and 10% higher than that of the BL and GP scenarios, respectively.     

Techno-economic evaluation of medium scale power to hydrogen to combined heat and power generation systems

The European Hydrogen Strategy and the new « Fit for 55 » package indicate the urgent need for the alignment of policy with the European Green Deal and European Union (EU) climate law for the decarbonization of the energy system and the use of hydrogen towards 2030 and 2050. The increasing carbon prices in EU Emission Trading System (ETS) as well as the lack of dispatchable thermal power generation as part of the Coal exit are expected to enhance the role of Combined Heat and Power (CHP) in the future energy system. In the present work, the use of renewable hydrogen for the decarbonization of CHP plants is investigated for various fossil fuel substitution ratios and the impact of the overall efficiency, the reduction of direct emissions and the carbon footprint of heat and power generation are reported. The analysis provides insights on efficient and decarbonized cogeneration linking the power with the heat sector via renewable hydrogen production and use. The levelized cost of hydrogen production as well as the levelized cost of electricity in the power to hydrogen to combined heat and power system are analyzed for various natural gas substitution scenarios as well as current and future projections of EU ETS carbon prices.     

An integrated scenario analysis for future zero‐carbon energy system

An integrated scenario analysis methodology has been proposed for zero‐carbon energy system in perspectives of social‐economy, environment and technology. By using the methodology, service demands in all sectors were estimated based on social‐economic data, and then the best technology and energy mixes were obtained to meet the service demands. The methodology was applied to Japan toward zero‐carbon energy system out to the year of 2100, and three different scenarios of nuclear power development are considered in light of the Fukushima accident: (i) no further introduction of nuclear, (ii) fixed portion and (iii) no limit of nuclear. The results show that, zero‐carbon energy scenario can be attained in the year 2100 when electricity will supply 75% of total energy consumption, and three power generation scenarios were proposed, 30% renewable and 70% gas‐carbon capture and storage (CCS) in Scenario 1, respective one‐third nuclear, renewable and gas‐CCS in Scenario 2, and 60% nuclear power, 20% renewable and 10% gas‐CCS in Scenario 3. Finally, Scenario 2 is rated as the most balanced scenario by putting emphasis on the availability of diversified power source, considering the inter‐comparison of the three scenarios from the four aspects of cost, CO₂ emission, risk and diversity. Copyright © 2015 John Wiley & Sons, Ltd.     

The development of the German energy market until 2030—A critical survey of selected scenarios

Many scenarios have been generated in the last years analysing the international energy market. The variety of these scenarios is manifold, as they are generated by different institutions using different methodological approaches and different framework assumptions. However, these scenarios can roughly be classified into three main groups: “moderate”, “climate protection” and “resource scarcity and high fossil fuel prices”. Analysing the German energy market makes a fourth scenario group necessary, which considers the possible revision of the decided nuclear energy phase out. Most of the existing scenarios developed by different institutions can be allocated into one of these groups. A representative scenario for each group has been selected to illustrate the development of the energy sector until 2030. Contrary to the worldwide primary energy demand (PED), the German PED decreases in each scenario, even though the drop differs strongly throughout the scenarios. On the other hand the structure of the PED in 2030 varies strongly for each scenario, especially regarding the share of fossil energy sources. However, a common robust result can be observed throughout all scenarios, namely the high increase in the share of the renewable energy resources, although the scenario generation processes are not always robust.