Renewable Energy Technologies I Exercise 2 Prof. A. Wokaun Assistant: K. Volkart 23 September 2014 Instructions • Please give the results in the units provided. • Round your results to reasonable precision. • Formulas that are provided in the exercise will also be provided in the exam. If the formula is not given in the exercise, it will not be provided in the exam neither. • Exercises must not be submitted for correction. • Solutions of the exercises will be made available on September 30. • If you have questions, please write an e-mail to: [email protected] 1 Electricity generation costs After the Fukushima disaster in 2011, the Swiss federal government decided to phase-out nuclear energy. In that year, nuclear energy contributed about 41% to the Swiss domestic electricity generation1 . Expecting constant or increasing electricity demands for the future2 , the nuclear generation capacity has to be (more than) compensated by non-nuclear generation. One option for domestic electricity production are natural gas-fired power plants. 1.1 Electricity generation cost of a natural gas power plant Table 1 shows the technical characteristics of a prospective natural gas-fired combined cycle (NGCC) power plant3 . Calculate the annuity factor acc and the electricity generation cost GN GCC [e-cts per kWhe ]. Be careful with the units! 1 Schweizerische Elektrizitaetsstatistik 2011, Federal Office of Energy, Bern, Switzerland. Die Energieperspektiven fuer die Schweiz bis 2050, Federal Office of Energy, Bern, Switzerland. 3 ZEP(2011). The Costs of CO2 capture. Brussels, Belgium. BASE case, middle fuel cost. 2 1 Table 1: Technical characteristics of the NGCC power plant3 Net capacity C Power plant efficiency ηe Life time n Full load hours load Investment costs I Levelised O&M costs OM Interest rate i Natural gas price P CO2 emissions EN GCC 1.2 420 MWe 58% 25 yr 7500 h per yr e714 per kWe e5.8 per MWhe 6% e8 per GJth 0.347 t per MWhe Electricity generation cost for a shale gas scenario Recent developments such as shale gas exploitation have led to substantial changes in the gas prices on regional level. Calculate the electricity generation cost Gshale [e-cts per kWhe ] assuming halving of the natural gas price P. What is the relative change compared to GN GCC (+/-)? What does this tell us about the fuel sensitivity of natural gas-fired power plants? 1.3 Electricity generation cost for a natural gas-fired power plant with CCS Switzerland has a CO2 policy including stringent domestic emission reduction targets. But natural gas-fired power plants do emit significant amounts of CO2 . One option to reduce their CO2 emissions is Carbon Capture and Storage (CCS)4 . The implementation of CCS at power plants leads to an increase in capital and O&M costs, and a decrease in the power plant’s efficiency3 . Calculate the electricity generation cost of a NGCC power plant with CCS, GCCS [e-cts per kWhe ], using the information from Table 2. What is the relative change compared to GN GCC (+/-)? Table 2: Technical characteristics of the NGCC power plant with CCS3 Capacity C Power plant efficiency ηe Life time n Full load hours load Investment costs I Levelised O&M costs OM Interest rate i Natural gas price P CO2 emissions ECCS 350 MWe 48% 25 yr 7500 h per yr e1662 per kWe e12.6 per MWhe 6% e8 per GJth 0.059 t per MWhe 4 CCS is a technology that reduces the CO2 emissions of point sources such as power and cement plants. CO2 is captured at the plant and subsequently transported to a suitable storage site and thereby permanently removed from the atmosphere. Therefore CCS can contribute to the mitigation of climate change. 2 1.4 CO2 avoidance cost In the previous section, it was shown that the implementation of CCS significantly increases the electricity generation cost. On the other hand, CCS reduces the CO2 emissions of fossil-fuelled power generation and therefore supports the mitigation of climate change. Calculate the CO2 avoidance cost A [e per t CO2 ] for the natural gas-fired power plant with CCS from the electricity costs G and the CO2 emissions E using the formula below. A= 1.5 GCCS −GN GCC EN GCC −ECCS Electricity generation cost for onshore wind power generation Another low-CO2 power generation technology option for Switzerland is wind power. How does its cost GW IN D [e-cts per kWhe ] compare to the one of the NGCC power plant with CCS GCCS ? The technology chacteristics for the wind power plant that are provided in Table 3. Table 3: Technical characteristics of the onshore wind power plant Capacity C Life time n Full load hours load Investment costs I Levelised O&M costs OM Interest rate i 2 2 MWe 20 yr 1500 h per yr e1200 per kWe e4.2 per MWhe 6% Learning curves New technologies are subject to so-called technology learning. With increasing capacity installed, the specific technology cost fall due to the gain in experience. The learning curve is an empirical function that relates specific investment cost of technologies to their cumulative installed capacity. An example of a learning curve is displayed in Figure 1. 2.1 Learning index As stated above, wind power is a potential option to expand domestic renewable electricity generation in Switzerland. Up to 2035, the technology is expected to become more competitive compared to conventional natural gas power plants as the currently immature technology undergoes so-called technology learning. Calculate the learning index b of wind energy [-]. Assume the learning rate lr as stated in the lecture notes 5 . 5 A learning rate of 20% implies that with the doubling of the cumulative capacity, the costs are reduced to 80% of their initial value. 3 Figure 1: Learning curve 2.2 Technology learning Calculate the cumulative capacity CC [MWe ] of wind power that is required to achieve specific costs SC of 1200 e/kWe in 2035. Assume that 800 e/kWe of the 1680 e/kWe investment costs required in 2010 are the floor cost (floor ), whereas the rest of the investment cost (SC0 ) undergoes technology learning. The installed wind capacity CC0 in 2010 was 18 MWe . 2.3 Limitations of the approach Which considerations have been omitted in the way previous question was formulated? Give arguments and propose a more realistic formulation for the technology learning for wind power. 4