ELEC9714

Electricity Industry Planning &Economics

Assignment 1

Summery:

With utilization of traditional screening curves method, it would derive the optimal plant capacity mix for Victorian electricity industry in 2036-7 for $30/tCO2 and $100/tCO2. Carbon price with $100/tCO2 would bring about $871 revenue a year to Australia government, and this could be used to public welfare, or it could be used to compensate electricity price for consumers. Hydro is fully dispachable during peak demand hours. If incorporate existing hydro (2000GW 2GW) into Victorian electricity industry with $30/tCO2 scenario during peak hours of LDC, existing hydro without build cost and operating cost would decrease total annual cost (TAC) significantly. Besides, remix of optimal plant capacity for thermal plants would be achieved by adding hydro. If incorporate 100MW biomass for the scenario of $30/tCO2. In comparison with generation plan without biomass, TAC of Victorian electricity industry almost does not change, but it is more ecofriendly. During 2016-17, the incorporation of 3GW PV with FPP and SAT into Victoria, TAC of electricity industry is approximately same between these two types. It has the same situation to 6GW PV with FPP and 6GW PV with SAT, hence, PV with SAT is more valuable. When adding 3GW of wind, TAC is almost same as that of adding 6GW of wind, as the additional cost for 6GW which exceed 3GW would becompensated by lower thermal generation cost (OCGT, CCGT, Coal SC). Hence, 6GW wind is more valuable. When adding 3GW of PV SAT and 6GW of wind, TAC of adding the above renewables is about as same as TAC without renewables for the scenario of $30/tCO2.

（a）Plot the total annual cost ($/MW/yr) for each of the relevant ‘new build’ plants for Victoria with 2 carbon price scenarios.

Total Annual Cost(TAC)= (KxCRF+FOM)+[(Fuel+VOM)xCF]

K=capital cost ($/KW )

CRF =i x (1+i)m / [(1+i)m -1] (m=plant life, i=discount rate=5%)

FOM=Fix O&M

VOM=Variable O&M

CF=Capacity Factor

For each generation in this assignment, the total annual cost is:

TAC($/MW/yr)=(BuildCostxCRF+FOM)x1000+(VOM+FuelCostxH

eatRate+TotalCO2xCarbon Price/1000)xCFx8760

For Example: CCGT

CF=0,TAC=(1557.88x0.0651+10) x 1000=111340($/MW/yr)

CF=1,TAC=111340+[7+8.88x6.93+(27.4+367.51)x30/1000]x8760=8

15740($/MW/yr)

Methodology of screening curves, drawing with two point one line for

each generation

CF=0 Total Annual Cost=Total Fix Cost

CF=1 Total Annual Cost=Total Fix Cost + Total Variable Cos

Use above data to plot total annual cost of each of relevant ‘new

build’ plants with carbon price $30/tCO2:

Use above data to plot total annual cost of each of relevant ‘new

build’ plants with carbon price $100/tCO2:

(b) Potential limitations with this technology of traditional screening curve if modelling the NEM as a whole

It is important to be aware of the limitations associated with screening curves, important factors such as forced outages, unite sizes and system reliability are not treated directly with screening curves. One of limitations is that it is assumed that 100% capacity factor for each plant (CCGT, OCGT, Coal, SCP). Besides, another assumption is that the above plants are non-constrained, fully dispatchable. However, in practice, generation has scheduled maintenance and forced outage rate, and thermal solar is constrained by solar, these mean capacity factor can not reach 100%. Generation unit also have limitation of maximum and minimum output, and when a unit is being loaded after a cold start up, there is a maximum rate at which the unit can approach full power (ramp rate). As generation has this ramp limitation, hence it not highly dispachable. Apart from that, the optimal capacity mix should consider System reliability, generation output should be affordable for transmission lines.

(c d) Plot LDC for Victoria for the year 2036-7, estimate the optimal plant capacity mix for Victoria for two carbon price.

$30/tCO2

OCGT: (11633-8000)/11633=31%

CCGT: (8000-5000)/11633=26%

Coal SC: 5000/11633=44%

$100/tCO2

OCGT: (11633-8000)/11633=31%

CCGT: (8000-5000)/11633=26%

CSP Storage:5000/11633=44%

The method is to construct cost curve for each technology and then to match the breakeven points to LDC, this could determine optimal plant capacity mix.

CO2 price          OCGT         CCGT         Coal SC         CSP Storage

$30/tCO2           31%          26%            44%

$100/tCO2         31%          26%                                   44%

(e) Estimate Total annual cost with two carbon price.

$30/tCO2

OCGT:

FC=(11633-8000)x92041=334milion$/yr

VC=(11633-8000)x4%x(1/3)x( 1318392-92041)=59million$/yr

CCGT:

FC=(8000-5000)x111340=334million$/yr

VC=[(8000-5000)x4%+3000x(0.64-0.04)x0.5]x(815740-111340)=

718million$/yr

Coal SC:

FC=5000x299982=1500million$/yr

VC=[5000x0.64+4000x(1-0.64)+(5000-4000)x(1-0.64)x0.5]x

(706979-299982)=1962million$/yr

TAC=Total fix cost+Total variable cost=4907million$/yr

$100/tCO2

OCGT:

FC=(11633-8000)x92041=334million$/yr

VC=(11633-8000)x0.04x0.33x(1672607-92041)=76million$/yr

CCGT:

FC=(8000-5000)x111340=334million$/yr

VC=[(8000-5000)x0.04+3000x(0.71-0.04)x0.5]x(1057678-

111340)=1065million$/yr

CSP Storage:

FC=5000x747025=3660million$/yrVC=[5000x0.71+4000x(1-0.71)+(5000-4000)x(1-

0.71)x0.5]x(799585-747025)=255million$/yr

TAC=5724million$/yr

Growth of carbon price may reduce fuel combustion, as increase of price would decrease demand. Growth of carbon price would raise variable O&M cost of generators, as part of operating cost comes from fuel costs. Carbon price is associated with generation type, generator output, and number of units. For generator, it has limitation of carbon emission in a year or several years. If there is too much carbon emission from generators, this may result in increase of carbon price in carbon market. Consequently, it would increase electricity price.

Carbon price also be regard as carbon tax. From electricity generation, carbon price is additional cost, it does increase total industry cost. While for government, this revenue would be used to public welfare, or it could be used to reduce electricity price to electricity consumers. So carbon price is paid by electricity generation, not electricity consumers. With carbon price of $100/tCO2, total annual cost for electricity generation is higher than $30/tCO2, it is equivalent to 817million revenue to government.

(f) Incorporate existing 2000GWh hydro with 2GW generation, a new optimal mix for $30/tCO2

Hydro plant would generate 2000GWh/2GW=1000h, as load would be tested twice an hour, testing times of data should be 1000x2 when add hydro to demand side.

Besides, existing hydro has no fix cost and no operating cost, it is valuable to incorporate it during hours of peak load, this assignment use top 2000 data of LDC minus 2GW, new load duration curve including hydro would be derived. The new mix of thermal generation is as follows:

CO2 Price             OCGT          CCGT          Coal

$30/tCo2               27%            19%           54%

(g)Incorporate 100MW biomass generation into analysis, calculate total annual cost of Victorian electricity industry

Unse original load duration curve mimus 100MW biomass would derive new load duraiton curve.

$30/tCO2

Biomass:

FC= 100x480738=48million$/yr

VC=100x(667738-480738)=19million$/year

OCGT:

FC=(11533-79000)x92041=334milion$/yr

VC=(11533-7900)x4%x(1/3)x( 1318392-92041)=59million$/yr

CCGT:

FC=(7900-4900)x111340=334million$/yr

VC=[(7900-4900)x4%+3000x(0.64-0.04)x0.5]x(815740-111340)=

718million$/yr

Coal SC:

FC=4900x299982=1470million$/yr

VC=[4900x0.64+3900x(1-0.64)+(4900-3900)x(1-0.64)x0.5]x

(706979-299982)=1921million$/yr

TAC=Total fix cost+Total variable cost

=4836+48+19=4903million$/yr

(h) Estimate the optimal generation mix and total annual cost when adding 3GW and 6GW of PV for $30/tCO2

Adding 3GW of PV for $30/tCO2

Incorporate renewable into demand side would achieve residual load duration curve(RLDC), data of load duration minus corresponding PV data, then rank new data from largest to smallest would derive RLDC.

$30/tCO2

3GW PV FPP FC=161023x3000=483million$/yr

OCGT:

FC=(9805-6800)x92041=277milion$/yr

VC=(9805-6800)x4%(1/3)x( 1318392-92041)=49million$/yr

CCGT:

FC=(6800-4300)x111340=278million$/yr

VC=[(6800-4300)x4%+2500x(0.64-0.04)x0.4]x(815740-111340)

=493million$/yr

Coal SC:

FC=4300x299982=1290million$/yr

VC=[4300x0.64+1599x(1-0.64)+(4300-1599)x(1-0.64)x0.8]x

(706979-299982)=1671million$/yr

TAC=Total fix cost+Total variable cost=4058+483=4541 million$/yr

(9805-6800)/9805=31%

(6800-4300)/9805=25%

(4300/9805)/9806=44%

Optimal generation mix

OCGT                CCGT              Coal SC

31%                  25%                44%

$30/tCO2

3GW PV SAT FC=190549x3000=572m$/yr

OCGT:

FC=(9695-6800)x92041=266milion$/yr

VC=(9695-6800)x0.04x(1/3)x( 1318392-92041)=47million$/yr

CCGT:

FC=(6800-4200)x111340=289million$/yr

VC=[(6800-4200)x4%+2600x(0.64-0.04)x0.35]x(815740-

111340)=459million$/yr

Coal SC:

FC=4200x299982=1260million$/yr

VC=[4200x0.64+1521x(1-0.64)+(4200-1521)x(1-0.64)x0.7]x

(706979-299982)=1592million$/yr

TAC=Total fix cost+Total variable cost=3913+572=4485million$/yr

(9695-6800)/9695=30%

(6800-4200)/9695=27%

4200/9695=43%