Renewables, Storage and the New Electricity Landscape

Transcription

1 Renewables, Storage and the New Electricity Landscape Imperial College Business School Richard Green, ELAEE Rio, 217 1

2 Two types of markets Thermal markets are power-limited Hydro markets are energy-limited Imperial College Business School 2

3 Impact of Renewables in a Thermal Market Imperial College Business School 3

4 Demand and Supply The merit order effect /MWh Marginal Cost Nuclear CCGT OCGT GW 4

5 German Energy Prices and The Merit Order Effect Prices ( /MWh) Gas price / 45% Electricity price Installed capacity (relative to peak load) 14% 12% 1% 8% 6% 4% 2% % Source: Green and Staffell, Oxrep, 216 Imperial College Business School 5

6 Costs & Revenues /kw-year Open Cycle Gas Turbine Combined Cycle Gas Turbine Nuclear Hours per year 6

7 Capacity and Load GW OCGT CCGT Nuclear After renewables OCGT CCGT Nuclear Hours per year 7

8 A thermal-renewable market GB, possible future, winter week GW 7 /MWh spill Nuclear Spilled Gas Peaking Wind Solar Rationing Price ( /MWh) -1 Imperial College Business School 8

9 Prices and PV Output Germany, April-September Ratio: 4 electricity price divided by gas price Inspired by Hirth (215) Load Factor PV Load Factor Imperial College Business School 9

10 Renewable Revenues in a Thermal Market Imperial College Business School 1

11 GW Load duration curve for GB 211 demand and weather with 5 GW solar PV Ranked by gross demand Solar Output Net Demand Imperial College Business School 11

12 GW Load duration curve for GB 211 demand and weather with 5 GW solar PV Ranked by net demand Solar Output Net Demand Imperial College Business School 12

13 GW Load duration curve for GB 211 demand and weather with 2 GW solar PV Ranked by net demand Solar Output Net Demand Imperial College Business School 13

14 GW Load duration curve for GB 211 demand and weather with 4 GW solar PV Ranked by net demand (and therefore price) Solar Output Net Demand Imperial College Business School 14

15 PV and Relative Prices Germany, April-September Relative price 1.75 After Hirth (215) PV Load Factor Relative revenues: +36% +24% +12% +3% -4% Imperial College Business School 15

16 The Cost of Solar PV Modules Candelise et al, Ren Sust En Rev, 213 Imperial College Business School 16

17 A moving target Green and Léautier (216) Imperial College Business School 17

18 Capacity mix GB greenfield model GW Offshore wind Onshore wind OCGT CCGT Nuclear Wind capacity GW

19 Annual Average Prices GB greenfield model /MWh Wind capacity Thermal outputweighted Demandweighted GW Time-weighted Onshore wind Offshore wind

20 Electricity Tax Required GB greenfield model /MWh 12 1 Base Case Wind capacity GW Financial Insurance

21 Renewables in a Hydro, or Storage, Market Imperial College Business School 21

22 Supply and Demand /MWh Demand Marginal Cost Price GW Imperial College Business School 22

23 Supply and Demand /MWh Demand Opportunity Cost ( Future Demand) Available Resource Price Remaining Resource Marginal Cost GW Finn s bathtub, from Forsund (27) Hydropower Economics Imperial College Business School 23

24 Reservoir Levels GWh Low price minimises the risk of throwing away energy Energy Capacity Low price again High price minimises the risk of running out of energy Time Imperial College Business School 24

25 A storage-renewable market GB, possible future, winter week GW /MWh s Nuclear s Wind Nuclear Solar L-T storewind S-T store Solar Rationing Demand L-T store Price ( /MWh) Imperial College Business School 25

26 A storage-renewable market GB, possible future, winter week GWh /MWh Discharging Charging Short-term Storage Level (GWh) Price ( /MWh) Imperial College Business School 26

27 Conclusions A Thermal-Renewable market will have volatile prices from hour to hour, and renewable generators will tend to receive prices below the time-weighted average A Hydro-Renewable market will have stable prices from hour to hour, but volatile prices from year to year Renewable generators will still tend to receive prices below the long-term time-weighted average Imperial College Business School 27

28 Thank you! Renewables Ninja: PV output estimates