The impact of low carbon generation on the future price of electricity

There are relatively few who would argue that tackling climate change, and therefore reducing carbon emissions, should not be a priority for society and the energy sector. But significant increases in energy prices are a necessary consequence of that policy. Using published sources this paper estimates that by 2020 UK and EU regulatory mechanisms designed to promote lower carbon energy will increase average household electricity prices by between 23% and 42%, and median industrial electricity prices by between 30% and 60%

Exploring the future low-carbon electricity system: impacts of nuclear power and demand patterns

To achieve the climate goals set by the Paris Agreement, the global electricity system is expected to transition towards a low-carbon electricity system. The future low-carbon electricity system is uncertain regarding both generation and demand. First, the cost of variable renewable energy (VRE) technologies, such as wind and solar, has been decreasing over the past decade and the share of\ua0 VRE in the electricity system is increasing. This trend is likely to continue for the foreseeable future. However, there is no consensus as to whether the goal of deep decarbonization of the electricity system can be accomplished without large cost escalation if nuclear power and fossil fuel plus carbon capture and storage (CCS) are excluded. Second, the future electricity demand is highly uncertain due to economic growth, e-mobility, electric heating, electric cooling, etc. These factors affect not only the volume of annual electricity demand, but also the inter-temporal electricity demand pattern. The change in demand pattern may affect a low-carbon electricity system with a high penetration level of wind and solar, as such a system is less capable of load following, as compared with the conventional electricity system based on dispatchable thermal power plants.This thesis investigates the impacts of nuclear power and demand patterns on the future low-carbon electricity system, and addresses the following research questions: What is the cost of a future low-carbon electricity system without nuclear power for Sweden?; and How will the electricity demand pattern affect the electricity system cost and the electricity supply mix? A greenfield techno-economic cost optimization model with a high temporal resolution for the electricity system is developed and used to answer these questions.The results of this work reveal that including nuclear power in the electricity system reduces the nodal net average system cost by 4% for Sweden. This implies that the economic rationale for Sweden as a country to invest in nuclear power is limited if there is a transition towards a low-carbon electricity system in Europe. In addition, we find that varied electricity demand patterns (seasonal and diurnal variations) affect only slightly the electricity system cost, except for the case of summer peak, where the system cost may increase by up to 8%. The demand pattern may have a stronger impact on the electricity supply mix, especially solar and storage capacities, than on the electricity system cost. This thesis contributes to a better understanding of the potential future low-carbon electricity system. The results are beneficial in identifying the implications for the planning of the future electricity system, policy support for low-carbon technologies, and demand profile treatment for modeling studies

Climate policy costs of spatially unbalanced growth in electricity demand: the case of datacentres. ESRI Working Paper No. 657 March 2020

We investigate the power system implications of the anticipated expansion in electricity demand by datacentres. We perform a joint optimisation of Generation and Transmission Expansion Planning considering uncertainty in future datacentre growth under various climate policies. Datacentre expansion imposes significant extra costs on the power system, even under the cheapest policy option. A renewable energy target is more costly than a technology-neutral carbon reduction policy, and the divergence in costs increases non-linearly in electricity demand. Moreover, a carbon reduction policy is more robust to uncertainties in projected demand than a renewable policy. High renewable targets crowd out other low-carbon options such as Carbon Capture and Sequestration. The results suggest that energy policy should be reviewed to focus on technology-neutral carbon reduction policies

Recent Developments in Renewable Energy in Remote Aboriginal Communities, Yukon, Canada

Remote aboriginal communities in Canada’s Yukon Territory are undergoing a transition from carbon-intensive diesel generated electricity to low carbon, renewable sources of electricity. Hydroelectricity is the main source of power in the territorial grid so the extension of the grid and the addition of new hydroelectricity sources offers one path to low carbon electricity future for some communities. In more remote parts of the territory, wind, solar and smaller hydroelectric generation projects are considered to reduce diesel consumption and the associated greenhouse gas emissions. Yukon’s Climate Change Action Plan promotes cutting the carbon intensity of electricity. This paper reviews community electricity systems, past renewable electricity projects, as well as available renewable resources, generation alternatives, and policies, plans and proposed future projects that could help transform the supply of electricity in the remote communities. The transition to cleaner electricity systems also creates an opportunity for new investment models and development options where communities or private parties may replace public utilities as investors in new generation technologies. Government supports for the transition of communities from greenhouse gas intensive diesel generation to low carbon renewable sources of electricity include the microgeneration and Independent Power Producer policies. Initial success with small renewable energy projects in the remote Yukon communities is leading to additional and larger projects being planned.Keywords: Yukon, remote aboriginal communities, indigenous communities, diesel, renewable electricity, energy transition, climate action policie

The role of biomass in the renewable energy system

Europe is striving for zero carbon electricity production by 2050 in order to avoid dangerous climate change. To meet this target a large variety of options is being explored. Biomass is such an option and should be given serious consideration. In this paper the potential role of biomass in a NW-European electricity mix is analyzed. The situation in NW-Europe is unique since it is a region which is a fore runner in renewable technology promotion but also an area with little sun, almost no potential for hydro and a lot of wind. This will result in a substantial need for non-intermittent low-carbon options such as biomass. The benefits and issues related to biomass are discussed in detail from both an environmental and an economic perspective. The former will focus on the life cycle of a biomass pellet supply chain, from the growth of the trees down to the burning of the pellets on site. The latter will provide detailed insights on the levelized cost of electricity for biomass and the role of biomass as a grid stabilizer in high intermittent scenarios. During the discussion, biomass will be compared to other competing electricity technologies to have a full understanding of its advantages and drawbacks. We find that biomass can play a very important role in the future low carbon electricity mix, the main bottleneck being the supply of large amounts of sustainably produced feedstock

Pricing Carbon for Electricity Generation: National and International Dimensions

In this paper, which forms a chapter in the forthcoming Book “Delivering a Low Carbon Electricity System: Technologies, Economics and Policy”, Grubb and Newbery examine how carbon for electricity generation should be priced. They begin by suggesting that it is not clear what the correct price of carbon is, but that it spans the whole range of economically plausible prices. They then go on to discuss the theoretical merits of taxes versus quotas, concluding that theoretically a stable tax would best reflect the true social cost of emissions, which should not change with market conditions. They then go to evaluate the EU Emissions Trading Scheme where allowances for the emission of CO2 are traded (EUAs). The price signals offered by the scheme in its first trading period have been very unsatisfactory with high variability and the price trending down towards very low levels as it has become clear that governments were much too generous in their initial allocation of quotas. What is needed is a stable investment environment for low carbon generation investments. They discuss a number of policy options to achieve this: long period commitments on quotas; allowing unconstrained banking and borrowing of EUAs over multiple periods; long term price declarations to be used in allocation auctions; government issued contracts for differences on the future carbon price; or simply to issue low-carbon electricity contracts. The authors conclude with a discussion of the scope for international agreements on carbon emissions reduction. They conclude that imperfect though it is the EU ETS is a good place to start to link up emerging trading regimes, and that quota systems have more of a chance of commanding international agreement at least initially. However any international climate change agreement will be difficult to establish

Electricity Network Investment and Regulation for a Low Carbon Future

The requirement for significantly higher electricity network investment in the UK seems certain as the capacity of distributed generation and large scale renewables increases on the system. In this paper, which forms a chapter in the forthcoming Book “Delivering a Low Carbon Electricity System: Technologies, Economics and Policy”, the authors make a number of significant suggestions for improvement to the current system of network regulation. First, they suggest that the RPI-X system needs to be overhauled in favour of a simpler yardstick based system and which allows for more merchant transmission investments. Second, future regulation should involve more negotiated regulation involving agreements between network owners and purchasers of network services. This would be particularly advantageous for decisions on new network investments. Third, more extensive use needs to be made of locational pricing within the transmission and distribution system in order to facilitate the least cost expansion of low carbon generation, including micropower. Fourth, consideration needs to be given to ownership unbundling of distribution networks from retail supply. This would better facilitate the entry of distributed generation and the development of appropriate competition between grid and off-grid generation supply and demand side management. Finally, there needs to be a significant increase in R&D expenditure in electricity networks supported by customer levies

Sustainable Low-Carbon Isolated Island Electricity Systems - Policy and Investment Impacts Assessed Using System Dynamics

This thesis presents a novel System Dynamics (SD) policy and investment analysis framework for future low-carbon electricity systems, using an electrically isolated island system as its case study. Current electricity systems are undergoing a long-term transition towards reduced fossil fuel use, primarily driven by high fuel costs, environmental concerns and the desire for energy security. These systems are facing a number of evolving policy drivers: most notably, current attempts to pursue higher levels of renewable energy sources, greater energy efficiency and other supporting technologies. Emerging challenges are shaping the low-carbon objectives of future electricity systems and the ensuing implications for future policy and investment decisions. This thesis presents a number of critical policy recommendations allied with longer-term investment observations, evolving from the nexus between the environmental and energy security concerns of an island-based electricity system. Island systems such as São Miguel, are small enough to be understood while being large enough to reveal highly complex structures and inherent time and spatial interactions within and between social, economic and technical factors. It is argued that a systematic SD-based approach can reveal possible system structure trajectories, with such insights assisting the understanding of overall sustainability while recognising emergent challenges and behaviours. The thesis shows that learning-by-doing renewables cost reductions exists but are not very significant in island electricity systems. Additionally, it shows that setting low-carbon policy targets is beneficial for emissions reductions, but meeting these targets too early is either inefficient or impractical if targets are unrealistic. Critical evaluations of endogenous electricity demand growth and the system capacity margin are provided, which highlights consequential policy challenges for island-based systems. The most important and influential low-carbon agendas giving endogenous impacts on electricity demand are elaborated. The thesis also confirms that more effective policies, for sustained renewables uptake and improved investor decision-making for the generation mix, can be achieved. Insights distilled from smaller electricity systems can help frame the outlook of larger systems

California’s Renewables Portfolio Standard (RPS) requires 33% renewable electricity generation by 2020 - Dream or Reality?

Progress on California’s Renewable Portfolio Standard (RPS), which requires 33% of all retail electricity sales to be served by renewable energy sources by 2020, excluding large hydro, is reported in this paper. The emerging renewable electricity mix in California (CA) and surrounding states which form the Western Electricity Coordination Council (WECC) is analysed using the Carbon Emission Pinch Analysis (CEPA) and Energy Return on Energy Invested (EROI) methodologies. The reduction in emissions with increased renewables is illustrated and the challenge of maintaining high EROI levels for renewable generation is examined for low and high electricity demand growth. The role of the California government in facilitating progress towards a more sustainable renewable electricity future is also highlighted. The investigation shows that wind and solar PV collectively form an integral part of California reaching the 33% renewables target (excluding large hydro) by 2020. Government intervention of tax rebates and subsidies, net electricity metering and a four tiered electricity price has accelerated the uptake of renewable wind and solar PV. Residential uptake of solar PV is also reducing overall California electricity grid demand. Emphasis on new renewable generation is stimulating development of affordable wind and solar technology in California which has the added benefit of enhancing social sustainability through improved employment opportunities at a variety of technical levels