Integration of risk and uncertainty on levelized cost of electricity calculation

The electric sector is still largely dependent on non-renewable energy sources. The importance of using renewable energies is increasingly recognized all across the world yet they are not fully ready to compete with the mature and ancient technologies that use non-renewable energies. The economic characteristics of different energy technologies can be compared by using the method of levelized cost of electricity (LCOE). LCOE represents the total cost of a power plant including investment and operation and maintenance costs over the assumed life-cycle and discounted to account for the time-value of money. In this paper, an analysis of the levelized costs is proposed for two renewable technologies in Portugal: wind power and solar photovoltaic. Firstly, a deterministic value of LCOE was computed for both technologies. Secondly, recognizing the uncertainty associated with all the assumed parameters, a probabilistic risk analysis was conducted with Monte Carlo simulation to complement the analysis. The results show the high variability of the obtained LCOE values, largely influenced by the investment values and load factors.INCT-EN - Instituto Nacional de Ciência e Tecnologia para Excitotoxicidade e Neuroproteção(UID/CEC/00319/2013

System integration of wind and solar power in Integrated Assessment Models: A cross-model evaluation of new approaches

Mitigation-Process Integrated Assessment Models (MP-IAMs) are used to analyze long-term transformation pathways of the energy system required to achieve stringent climate change mitigation targets. Due to their substantial temporal and spatial aggregation, IAMs cannot explicitly represent all detailed challenges of integrating the variable renewable energies (VRE) wind and solar in power systems, but rather rely on parameterized modeling approaches. In the ADVANCE project, six international modeling teams have developed new approaches to improve the representation of power sector dynamics and VRE integration in IAMs. In this study, we qualitatively and quantitatively evaluate the last years' modeling progress and study the impact of VRE integration modeling on VRE deployment in IAM scenarios. For a comprehensive and transparent qualitative evaluation, we first develop a framework of 18 features of power sector dynamics and VRE integration. We then apply this framework to the newly-developed modeling approaches to derive a detailed map of strengths and limitations of the different approaches. For the quantitative evaluation, we compare the IAMs to the detailed hourly-resolution power sector model REMIX. We find that the new modeling approaches manage to represent a large number of features of the power sector, and the numerical results are in reasonable agreement with those derived from the detailed power sector model. Updating the power sector representation and the cost and resources of wind and solar substantially increased wind and solar shares across models: Under a carbon price of 30$/tCO2 in 2020 (increasing by 5% per year), the model-average cost-minimizing VRE share over the period 2050–2100 is 62% of electricity generation, 24%-points higher than with the old model version

The CO2 reduction potential for the Europeanindustry via direct electrification of heat supply(power-to-heat)

The decarbonisation of industry is a bottleneck for the EU's 2050 target of climate neutrality. Replacing fossil fuels with low-carbon electricity is at the core of this challenge; however, the aggregate electrification potential and resulting system-wide CO2 reductions for diverse industrial processes are unknown. Here, we present the results from a comprehensive bottom-up analysis of the energy use in 11 industrial sectors (accounting for 92% of Europe's industry CO2 emissions), and estimate the technological potential for industry electrification in three stages. Seventy-eight per cent of the energy demand is electrifiable with technologies that are already established, while 99% electrification can be achieved with the addition of technologies currently under development. Such a deep electrification reduces CO2 emissions already based on the carbon intensity of today's electricity (∼300 gCO2 kWhel-1). With an increasing decarbonisation of the power sector IEA: 12 gCO2 kWhel-1 in 2050), electrification could cut CO2 emissions by 78%, and almost entirely abate the energy-related CO2 emissions, reducing the industry bottleneck to only residual process emissions. Despite its decarbonisation potential, the extent to which direct electrification will be deployed in industry remains uncertain and depends on the relative cost of electric technologies compared to other low-carbon options

Non-Gaussian power grid frequency fluctuations characterized by Levy-stable laws and superstatistics

Multiple types of fluctuations impact the collective dynamics of power grids and thus challenge their robust operation. Fluctuations result from processes as different as dynamically changing demands, energy trading and an increasing share of renewable power feed-in. Here we analyse principles underlying the dynamics and statistics of power grid frequency fluctuations. Considering frequency time series for a range of power grids, including grids in North America, Japan and Europe, we find a strong deviation from Gaussianity best described as Lévy-stable and q-Gaussian distributions. We present a coarse framework to analytically characterize the impact of arbitrary noise distributions, as well as a superstatistical approach that systematically interprets heavy tails and skewed distributions. We identify energy trading as a substantial contribution to today’s frequency fluctuations and effective damping of the grid as a controlling factor enabling reduction of fluctuation risks, with enhanced effects for small power grids

Feasible mitigation actions in developing countries

Energy use is not only crucial for economic development, but is also the main driver of greenhouse-gas emissions. Developing countries can reduce emissions and thrive only if economic growth is disentangled from energy-related emissions. Although possible in theory, the required energy-system transformation would impose considerable costs on developing nations. Developed countries could bear those costs fully, but policy design should avoid a possible 'climate rent curse', that is, a negative impact of financial inflows on recipients' economies. Mitigation measures could meet further resistance because of adverse distributional impacts as well as political economy reasons. Hence, drastically re-orienting development paths towards low-carbon growth in developing countries is not very realistic. Efforts should rather focus on 'feasible mitigation actions' such as fossil-fuel subsidy reform, decentralized modern energy and fuel switching in the power sector

Constant elasticity of substitution functions for energy modeling in general equilibrium integrated assessment models:a critical review and recommendations

Applying constant elasticity of substitution (CES) functions in general equilibrium integrated assessment models (GE-IAMs) for the substitution of technical factor inputs (e.g., replacing fossil fuels) fails to match historically observed patterns in energy transition dynamics. This method of substitution is also very sensitive to the structure of CES implementation (nesting) and parameter choice. The resulting methodology-related artifacts are (i) the extension of the status quo technology shares for future energy supply relying on fossil fuels with carbon capture, biomass, and nuclear; (ii) monotonically increasing marginal abatement costs of carbon; and (iii) substitution of energy with non-physical inputs (e.g., knowledge and capital) without conclusive evidence that this is possible to the extent modeled. We demonstrate these issues using simple examples and analyze how they are relevant in the case of four major CES-based GE-IAMs. To address this, we propose alternative formulations either by opting for carefully applied perfect substitution for alternative energy options or by introducing dynamically variable elasticity of substitution as a potential intermediate solution. Nevertheless, complementing the economic analysis with physical modeling accounting for storage and resource availability at a high resolution spatially and temporally would be preferable

Renewable, ethical? Assessing the energy justice potential of renewable electricity

Energy justice is increasingly being used as a framework to conceptualize the impacts of energy decision making in more holistic ways and to consider the social implications in terms of existing ethical values. Similarly, renewable energy technologies are increasingly being promoted for their environmental and social benefits. However, little work has been done to systematically examine the extent to which, in what ways and in what contexts, renewable energy technologies can contribute to achieving energy justice. This paper assesses the potential of renewable electricity technologies to address energy justice in various global contexts via a systematic review of existing studies analyzed in terms of the principles and dimensions of energy justice. Based on publications including peer reviewed academic literature, books, and in some cases reports by government or international organizations, we assess renewable electricity technologies in both grid integrated and off-grid use contexts. We conduct our investigation through the rubric of the affirmative and prohibitive principles of energy justice and in terms of its temporal, geographic, socio-political, economic, and technological dimensions. Renewable electricity technology development has and continue to have different impacts in different social contexts, and by considering the different impacts explicitly across global contexts, including differences between rural and urban contexts, this paper contributes to identifying and understanding how, in what ways, and in what particular conditions and circumstances renewable electricity technologies may correspond with or work to promote energy justice