ee w05.1 m_ 2. electricity generation _ part 4 (generation technologies)
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1
2. Why coal rather than (new) gas
generatiors?
1.Why a diversity of generation
types?
3. Negative prices?
Different fixed & variable cost
profiles x
variability in demand
2
Previous lecture
9 12 15 170 24
1
2
3
TIME
Daily Demand in MW Load Curve
Daily variations (UK)
DURATION (%)100500
1
2
3
9 12 15 170 24
1
2
3
TIME
Daily Demand in MW
Daily Demand in MW
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Load Curve
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily Demand in MW
Daily Demand in MW
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Load Curve
FIND THE MISTAKE!!!
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily Demand in MW
Daily Demand in MW
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Load Curve
33.3
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily Demand in MW
Daily Demand in MW
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Load Curve
33.3
A bit a difficult load-duration curve (and also
quite a-typical)
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily Demand in MW
Daily Demand in MW
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Load Curve
How to get this more typical,
nicer LD curve?
DURATION (%)100500
1
2
3
9 12 15 170 24
1
2
3
TIME
Daily Demand in MW
Daily Demand in MW
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Load Curve
DURATION (%)100500
9 12 15 170 24 TIME
1
2
3
1
2
3
Daily Demand in MW
Daily Demand in MW
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Load Curve
DURATION (%)100500
1
2
3
Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 50
Daily Demand in MW D=3-2* Duration
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Technology Costs Table
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
(=8760 hours/year)
Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 50
0%
Cost/MWhScreening curve
(Capacity-cost based)
Technology Costs Table
Screening curve(Capacity-cost based)
Screening curve(Energy-cost based)
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
(=8760 hours/year)
Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 50
0%
Cost/MWh
Use baseload when capacity factor > 60%
Use peakers when capacity factor < 60%
Screening curve(Capacity-cost based)
Technology Costs Table
Install baseload when capacity factor > 60%
Install peakers when capacity factor < 60%
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
Daily Demand in MW
60
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Screening curve(Capacity-cost based)
Nuclear
Oil
Old, inefficient plants (old Coal & OCGT)
Gas (CCGT)
Coal
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
18Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 50
DURATION (%)
100500
1
2
3
Daily Demand in MW
D=3-2* Duration
Load-Duration Curve
Technology Costs Table
Overview newly introduced curves & table
9 12 15 170 24
Daily Demand in
MW
1
2
3
TIME
Load Curve
0
60
40
Capacity factor
Baseload
Peaker
100%60%
10
0%
Cost/MWh
Screening curve(Capacity-cost based)
19
This lecture
20
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
Daily Demand in MW
S50
0
0 1.81 32
DMAX
P
DMIN
Q
Supply & demand curve
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
MC=0
MC=50
Uniformly distributed
21
Nuclear Coal Gas Oil Shortage
Exceptionally highVery highModerateLow
Load curve
00 05 07 10 13 15 18 24
Very Low
Low
Moderate
Very high
Exceptionally high
Very LowP
0
20
30
50
P=0
P=20
P=30
P=50 P=CAP
Hours
21
Price is set by the variable costs of the most expensive generator
needed to meet demand
Supply & demand curve
22
Optimal Dispatch of Peakers &
Missing Money
23
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
S50
0
0 1.81 32
D
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
60%
60
Daily Demand in
MW
πPEAKER=…πPEAKER=0 πPEAKER=…πPEAKER=0
P
Q
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Supply & demand curve
Technology Costs Table
24
D
S
$/MWH
50
0
PCap
Baseload plants (P=MC=0)
40%
Peaker plants(P=MC=50)
60-x%
0 1.81 32
Shortage!!(P=PCap)
x%
PCap =?PCap =VOLL
(Value Of Lost Load)
the “missing money” problemzero-profit condition
Supply & demand curve
25
S50
0
0 1.81 32
DP
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
59.9%
PCAP=10.0500.1%
πPEAKER= 0 πPEAKER= 0 πPEAKER=
≈9hrs/year
zero-profit condition
πPEAKER=0.1% * 10.000= 10
Very high!
Total πPEAKER=0+0+10=10Zero-profit condition
Supply & demand curveTechnology Costs Table
26
S50
0
0 1.81 32
DP
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
59.9%
PCAP=5500.1%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.001 * 500 = 0.5
Total πPEAKER=0+0+.5 = .5
Zero-profit condition
Supply & demand curveTechnology Costs Table
27
S50
0
0 1.81 32
DP
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
58%
PCAP=5502%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10 Total πPEAKER=0+0+10=10Zero-profit condition
Supply & demand curveTechnology Costs Table
28
S50
0
0 1.81 32
DP
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
58%
PCAP=5502%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10
πBASE= 0 πBASE=0.58* 50 = 29
πBASE=0.02 * 550 = 11
Total πBASE=29+11 = 40
Zero-profit condition
Total πPEAKER=0+0+10=10Zero-profit condition
Supply & demand curveTechnology Costs Table
29
S50
0
0 1.81 32
DP
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
58%
PCAP=5502%
πPEAKER= 0 πPEAKER= 0 πPEAKER=0.02 * 500= 10
πBASE= 0 πBASE=0.58* 50= 29
πBASE=0.02 * 550= 11
P¯=P¯=0.4* 0 + 0.58* 50 + 0.02 + 550=
≈180 hrs/year
P¯=0.4* 0 + 0.58* 50 + 0.02 + 550= 0 + 29 + 11 = 40
Total πPEAKER=0+0+10=10Zero-profit condition
Total πBASE=29+11=40Zero-profit condition
Supply & demand curveTechnology Costs Table
30
S50
0
0 1.81 32
DP
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
60%-x
PCAP
Total πPEAKER=0+0+10=10πPEAKER= 0 πPEAKER= 0 πPEAKER=x * (PCAP – MCPeaker) =
10
Peaker
10
CAP
xP MC
Peaker
PeakerCAP
FCxP MC
Zero-profit condition
Supply & demand curveTechnology Costs Table
31
S50
0
0 1.81 32
DP
P=0
P=50 Fixed cost per MWh
Variable cost per MWh
Baseload 40 0
Peaker 10 5040%
58%
P=5502%
DURATION (%)100500
1
2
3
BASELOAD
D=3-2* Duration
1.8
PEAKER
60
Daily Demand in
MW
2
Shortage ≈180 hrs/year
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Supply & demand curve Technology Costs Table
32
BASELOAD
PEAKER
33
Price spike
Can be distinguished from market abuse?
34
What can we do about price-spikes?
- Lower the price-cap- Then we have lower but more frequent spikes
- Capacity payments
35
36
0 .2 0 .4 0 .6 0 .8 1 .0p r o b a b i l l i t y
2
4
6
d e m a n d
0 .2 0 .4 0 .6 0 .8 1 .0p r o b a b i l l i t y
2
4
6
d e m a n d
x~N(1,0.05)
x~N(1,0.1)
x=1
Each level * x
0 .2 0 .4 0 .6 0 .8 1 .0p r o b a b illity
2
4
6
d e m a n d
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
370 .2 0 .4 0 .6 0 .8 1 .0
p ro b ab illity
2
4
6
d em an d
N: 1 unit
C: 1.8 unit
G: 0.2 unit
O: 2.2 unitTotal installed: 5.2 unit
Pr[D>5.2] =
= Pr[5x>5.2]
= Pr[x>(5.2/5)]
= Pr[x>(1.04]
≈ 21%
Daily Load-Duration Curve:Duration[y] = Pr[Demand > y]
Is the “energy-only” model valid?
39
Source: ERUJiří Krejsa
Yearly Load-Duration Curve:Duration[y] = Pr[Demand > y]
Installed power capacity 2011 (MW)Steam 10787,5 53,27%Nuclear 3970 19,60%PV 1971 9,73%Pumped-storage 1146,5 5,66%Hydro 1054,6 5,21%Gas 1101,7 5,44%Wind 218,9 1,08%Total 20250,2 100,00%
Source: ERU Jiří Krejsa
About 2x more capacity than peak demand!!!
• Remains of the good old times of electricity being run as state-owned Vertically Integrated Utilities (VIUs) (up to 2000)– Civil engineers “gold-plate” the system: excess generation
reserves for “just-in-case” disregarding the costs– Prices calculated as average costs + an uplift for capital expenses
• 1990-2000: Onset of liberalization, privatization and competition – Prices are marginal prices– Due to the excess capacity they are relatively low– Thus: no investment in new capacity
• Now: “sweating” the assets
Source: Helm, D. 2005. The assessment: the new energy paradigm. Oxford review of economic policy, vol. 21, no. 1
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