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Always useful data. Important to note that electrical grids and markets are more complicated than "average levelized cost". The uptake of intermittent resource
by probablypower 3y ago
Always useful data.
Important to note that electrical grids and markets are more complicated than "average levelized cost". The uptake of intermittent resources will increase the need for ancillary services, and skew the economics towards generators that are flexible.
For example, you can end up in a situation where half the time the price is zero (even negative) and the other half the price is set by your peaking plants. If you own a wind farm, you're likely to be produce most of your energy in low value periods. This effect worsens as you get more renewables. Hydropower owners dominate in this environment, as they can save their water when the prices are low, and sell at peak capacity when it is high. Norway is making a killing on this, for example.
There are also limits to the proportion of renewables you can have generating at any moment in a synchronous area. At present it is likely around 50-60% for most grids (see DS3 project at Eirgrid, where they're closer to 70%). This is largely due to grid inertia and ancillary services. The remaining 30% is interesting. At present the best option is natural gas, to act as peaking, with some old conventional plants hanging in just to eek out value before decommissioning. In the future this may be hydrogen plants and nuclear. In the far future it may be fusion.
- snake_doc 3y agoYou’re describing energy market price (LBMP) dynamics. LCOE isn’t a price, it’s an cost estimate for the lifetime of an “power plant”. LCOE is an input to deciding whether to build a new power plant in a market. The market’s LBMP is another input. Super simplified, if the market’s average LBMP is lower than LCOE for the plant, the plant shouldn’t be built…
- ZeroGravitas 3y agoGrid inertia and ancilliary services are moving to inverter based platforms like renewables/batteries as detailed on pages 20 and 21 of this PDF.
- algo_trader 3y agoYou have discovered "value adjusted LCoE" and "System LCoE" Also South Australia grid (~1GW) has been running at 90% renewable for months, and recently 99% with some new hardware. It is true the last 10% will be very hard, but luckily we have engineers.
- deleted 3y ago[deleted]