Potential value propositions for CSP · Potential value propositions for CSP 3 (adapted from ENA,...

Potential value propositions for CSP

Iain MacGill Associate Professor, School of Electrical Engineering and Telecommunications Joint Director (Engineering), CEEM

Symposium on The future of

concentrating solar power in

Australia: transitions and benefits

UTS ISF, ASME and Austela

Sydney, June 2013

CSP – a valuable electricity industry resource Energy Resource

– “An available energy supply that can be drawn on when needed.”

– “The ability to deal with a difficult or troublesome energy situation effectively”

Dispatchable Resource – Complex in practice. eg. wind can be more dispatchable than coal if windy.

Wind and PV Energy Resource – Highly variable and only somewhat predictable, downwardly dispatchable

Energy Storage Resource – “the storing of some form of energy that can be drawn upon at a later time to

perform some useful operation”

More broadly, complementary resources – Resources that facilitate successful electricity industry operation with

growing penetrations of variable and somewhat unpredictable RE generation, within an industry where supply must equal demand at all times and all locations within network

CSP Resource? Elements of all of the above 2 Potential value propositions for CSP

http://www.wordiq.com/definition/Energy

3 Potential value propositions for CSP

(adapted from ENA, 2009)

Key storable

primary energy

resources –

coal, gas, CST

Overall mix of

generation

resources and

Tx network

Inherent storage

(eg. CSP) or

additional utility

scale storage

Inherent storage

(eg. CSP) or

specific units Aggregated

demand &

Dx network

Inherent demand

storage (eg. hot

water,) or additional

(eg. EV)

4 Potential value propositions for CSP 4

Value in the NEM – costs, prices, tariffs...

Generation

Sector:-

large

generators

Transmission

Sector: –

TNSPS

Electricity

flow

Derivative trading for risk, investment

Distribution

Sector: -

DNSPS Electricity

flow

Multi-region

five-minute

energy

& FCAS

markets

Intentions,

offers &

payments

Intentions,

bids &

payments

Retailer Z

Retailer 1

Retail

sector

End-use

Sector:-

end-use

equipment

Electricity

flow

End-users

Retail

Markets

Generation

Sector

AEMO: market & system operator

cash flow

10%

50

%

40% 40% Generator Y

Generator 1

(adapted from Outhred, 2007)

Potential value propositions for CSP 5

Two ‘worlds’ for renewables integration

Generation

Sector:-

large

generators

Transmission

Sector Energy flow

Derivative trading (cashflow?)

Distribution

sector Energy flow

Multi-region

five-minute

energy

& FCAS

markets

Intentions,

offers &

payments

Intentions,

bids &

payments

Retailer Z

Retailer 1

Retail

sector

End-use

sector

(including DR)

Energy flow

End-users

Retail

Markets

Embedded

generators Generation

Sector:-

large

generators

AEMO: market & system operator

cash flow

10%

50%

40% cash flow

Centralised

Renewables

Distributed

Renewables +

other DRs

5

The NEM for energy resources w/o inherent

energy storage… and as penetrations grow

6 Potential value propositions for CSP (AEMO, 2011)

Value – nature of underlying RE resource


Commercial value

in wholesale market Wind, as with any other gen

investment shifts mkt outcomes,

& hence revenue of all market

participants. In a restructured

electricity industry, such impacts

an intended outcome.

Wind clearly appears to be

impacting wholesale spot prices

(but note complexities of such

analysis wrt overall impacts,

particularly in longer-term, also

wrt ancillary, derivative prices)

Potential value propositions for CSP

(Forrest and MacGill, 2013)

8

Wind energy ‘value’ in NEM? At high penetrations wind generation earns less – appropriate outcome as

technology without primary energy storage has lower value in electricity

industry than generation with such storage (hydro, gas, coal, CST)

Potential value propositions for CSP (Cutler, Boerema, MacGill and Outhred, Energy Policy J., 2011) 9

Wider energy storage value propositions

10 Potential value propositions for CSP (Sue, 2013)

Recent valuation study for the NEM


Potential storage value proposition


Aggregation key.. but difficult in practice


High renewables future electricity scenarios

100% renewables scenarios a ‘worst’ (best) case scenario

– Close match to high renewable + gas scenarios

Some key questions

– Technical feasibility? – can 100% renewables mixes utilizing highly

variable and somewhat unpredictable solar and wind reliably meet

demand at all times and locations

– If yes, Economic feasibility? – is 100% renewables economically worth

doing given likely costs vs costs of inaction, other options

– If yes, Commercial feasibility? – can we establish commercial frame-

works that drive appropriate deployment at speed and scale required

Alternative scenarios

– BAU a plausible longer-term proposition?


CSP plays a valuable complementary role


UNSW least cost 100% RE findings

Without transmission

With transmission

Low cost

High cost

Low cost

High cost

19.6 22.1 21.2 24.4

A$b/yr for AETA high and low

technology cost scenarios

By capacity By energy

Low AETA

cost scenario

High AETA

cost scenario

+ 8.8 TWh

spilled

+ 24.9 TWh

spilled

Generation mix

Wind

PV

CST

Pumped hydro

Hydro

GTs

Current NEM costs

approx. $10b/year.

At carbon prices of

$50-100/tCO2 100%

RE costs can be less

than ‘replacement’

scenario

Potential value propositions for CSP 16 (Elliston et al, 2013)

AEMO 100% RE – least cost capacity mix


AEMO 100% RE – least cost generation mix


Conclusions

CSP a high cost, but potentially high value electricity

industry resource

Current NEM arrangements allow CSP to capture some, but

not all, of its value propositions

CSP value increases with greater deployment of PV, wind

Some key issues

– Future costs

– Scalability

– Hybrid opportunities

– A changing NEM context including uncertain future gas prices, falling

demand

– The competition


PV and the Merit Order Effect in the NEM

Many of our publications are available at:

www.ceem.unsw.edu.au

Thank you… and questions

http://www.ceem.unsw.edu.au/

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