The impact of introducing zonal pricing within GB on investment signals to low carbon generation

This work has investigated the premise that utilising zonal pricing for congestion management within Great Britain (GB) with Scotland as a separate price zone than the rest of GB could disincentivise investment in wind generation within areas of the highest wind resource. Computational modelling has shown consistently less installed wind capacity in Scotland in scenarios representing zonal pricing compared with scenarios representing the current GB system. This suggests that in the long term implementing zonal pricing within GB could negatively impact on the investment of low carbon generation in locations with the best renewable resource, which would be the most cost-effective method of meeting carbon reduction targets under the UK Levy Control Framework;The interaction between investing in low carbon generation within multiple price zones and the subsidy framework including a feed-in tariff with Contracts for Difference (CfDs) is a key focus of this work. Multiple scenarios are developed following a discussion of form that the CfD scheme could take in a two-zone GB. These comprise of a base case scenario representing current electricity trading within GB, a scenario in which the current competitive auction system does not change and CfD strike prices remain GB-wide and a scenario in which locational strike prices are introduced.;Computational modelling has taken the form of a two-node linear solver to introduce and discuss the potential impacts of two price zones in GB on investment in low carbon generation and the Scottish Electricity Dispatch Model (SEDM), an eighteen node investment and dispatch model with greater spatial and temporal complexity and thus a more accurate representation of the GB system. The modelling methodology includes representing a range of objective functions, which has been shown to significantly affect the zonal results. Cases have also been revealed in which the SRMC iteration process did not converge for the two zone solver, highlighting the potential issues involved with modelling a subsidy framework like the CfD mechanism within multiple price zones.This work has investigated the premise that utilising zonal pricing for congestion management within Great Britain (GB) with Scotland as a separate price zone than the rest of GB could disincentivise investment in wind generation within areas of the highest wind resource. Computational modelling has shown consistently less installed wind capacity in Scotland in scenarios representing zonal pricing compared with scenarios representing the current GB system. This suggests that in the long term implementing zonal pricing within GB could negatively impact on the investment of low carbon generation in locations with the best renewable resource, which would be the most cost-effective method of meeting carbon reduction targets under the UK Levy Control Framework;The interaction between investing in low carbon generation within multiple price zones and the subsidy framework including a feed-in tariff with Contracts for Difference (CfDs) is a key focus of this work. Multiple scenarios are developed following a discussion of form that the CfD scheme could take in a two-zone GB. These comprise of a base case scenario representing current electricity trading within GB, a scenario in which the current competitive auction system does not change and CfD strike prices remain GB-wide and a scenario in which locational strike prices are introduced.;Computational modelling has taken the form of a two-node linear solver to introduce and discuss the potential impacts of two price zones in GB on investment in low carbon generation and the Scottish Electricity Dispatch Model (SEDM), an eighteen node investment and dispatch model with greater spatial and temporal complexity and thus a more accurate representation of the GB system. The modelling methodology includes representing a range of objective functions, which has been shown to significantly affect the zonal results. Cases have also been revealed in which the SRMC iteration process did not converge for the two zone solver, highlighting the potential issues involved with modelling a subsidy framework like the CfD mechanism within multiple price zones

Modelling the potential impacts of locational versus system-wide strike prices in contracts for difference for low carbon generation

This paper describes the use of a cost - minimisation algorithm to explore the potential impact of two options for financial support for low carbon generation in the form of contracts for difference in a system with locational marginal pricing: 1. with a system-wide strike price; 2. with locational strike prices. A two zone system is modelled with the additional financial support for low carbon generation represented as negative variable costs that have the effect of filling in the difference between wholesale market prices and the strike price, the latter intended to cover the long-run costs of low carbon generation. The British case is modelled in which there is a limit to the total top-up expenditure. It is shown that the case of a system-wide strike price can result in less new low carbon generation capacity compared with the case of locational strike prices, due to the increased top-up spend in the lower price zone more rapidly meeting the constraint on the total cost of top-up payments to low carbon generation. However, it is also shown that the imposition of this constraint leads to a failure of the model to settle on one solution due to the non-convex relationship between installed capacity of low carbon generation and wholesale market price

Providing frequency droop control using variable speed wind turbines with augmented control

An augmentation to conventional wind turbine control is presented and its applicability for providing droop control services to the grid is investigated. Both the impact on the fatigue loads of the turbines and the change in energy capture when providing droop control are assessed. Three alternative strategies for providing droop control are simulated. The controller is found to be suitable for providing droop control. When providing droop control, the damage equivalent loads for the tower and for the blades change by between -0.63% and 0.14% and between -0.45% and 0.29% respectively. Energy capture is reduced by between 3.18% and 10.91% compared to normal operation, depending upon the strategy chosen to supply droop control, the wind turbine used and the wind speed distribution

The Scottish electricity dispatch model

This paper presents the Scottish Electricity Dispatch Model (SEDM), a cost minimization power system optimization model designed as a tool to investigate potential development trajectories of the Great Britain (GB) power system with particular focus on the Scottish region. Results of SEDM studies investigating the impact of low carbon policies on carbon emissions, generation portfolios and system costs are described. Two potential policies are investigated: carbon pricing and emissions limits, compared to a base scenario with neither of these policies included, but featuring financial support for low carbon generation in line with current GB policy. Model results suggest that carbon emissions could be reduced by up to 95.6% by 2050 with strict emissions limits, achieved largely through an eighteen fold increase in renewable generation capacity. This results in an increase in system costs (including carbon pricing costs) of up to 23.4% compared to the base case, in which carbon emissions increase by 130.8% from present day to 2050. This suggests current policies will be insufficient to achieve a reduction in carbon emissions to the level suggested by the UK’s Committee on Climate Change (CCC)

Estimating Future Costs of Emerging Wave Energy Technologies

The development of new renewable energy technologies is generally perceived as a critical factor in the fight against climate change. However, significant difficulties arise when estimating the future performance and costs of nascent technologies such as wave energy. Robust methods to estimate the commercial costs that emerging technologies may reach in the future are needed to inform decision-making. The aim of this paper is to increase the clarity, consistency, and utility of future cost estimates for emerging wave energy technologies. It proposes a novel three-step method: (1) using a combination of existing bottom-up and top-down approaches to derive the current cost breakdown; (2) assigning uncertainty ranges, depending on the estimation reliability then used, to derive the first-of-a-kind cost of the commercial technology; and (3) applying component-based learning rates to produce the LCOE of a mature technology using the upper bound from (2) to account for optimism bias. This novel method counters the human propensity toward over-optimism. Compared with state-of-the-art direct estimation approaches, it provides a tool that can be used to explore uncertainties and focus attention on the accuracy of cost estimates and potential learning from the early stage of technology development. Moreover, this approach delivers useful information to identify remaining technology challenges, concentrate innovation efforts, and collect evidence through testing activities

Deriving Current Cost Requirements from Future Targets:Case Studies for Emerging Offshore Renewable Energy Technologies

This work investigates potential cost reduction trajectories of three emerging offshore renewable energy technologies (floating offshore wind, tidal stream, and wave) with respect to meeting ambitious cost targets set out in the Strategic Energy Technology Implementation Plans (SET-Plans) for Offshore Wind and Ocean Energy. A methodology is presented which calculates target costs for current early-stage devices, starting from the 2030 SET-Plan levelised cost targets. Component-based experience curves have been applied as part of the methodology, characterised through the comparative maturity level of each technology-specific cost centre. The resultant early-stage target costs are then compared with actual costs for current devices to highlight where further cost reduction is still required. It has been found that innovation and development requirements to reach these targets vary greatly between different technologies, based on their current level of technological maturity. Future funding calls and programmes should be designed with these variables in mind to support innovative developments in offshore renewables. The method presented in this paper has been applied to publicly available cost data for emerging renewable technologies and is fully adaptable to calculate the innovation requirements for specific early-stage renewable energy devices