News Article | May 9, 2017
As the recent offshore wind auction in Germany showed, unsubsidized renewables are rapidly becoming a reality. But how do you calculate the revenues from intermittent solar and wind power plants that receive no financial support, in particular in view of the frequent occurrence of zero or negative power prices? Carlos Perez Linkenheil, Marie-Louise Niggemeier and Simon Göß from Energy Brainpool, independent Berlin-based energy market experts, have developed a model for a plausible and realistic price index that takes into account the effects of negative power prices on revenues. Various price indices are available for assessing electricity market revenues. Most common are baseload, peakload and market value. Baseload is the average non-weighted price for electricity in the day-ahead market from Monday to Sunday, 0 to 24h. Thus, it is the average price of all hours in a defined period of time, while peakload only takes into account electricity prices in the day-ahead market from Monday to Friday, 8 to 20h. Market value is the average weighted price of a technology in the spot market at all hours during which the corresponding technology is feeding electricity into the grid. Negative prices are taken into account when calculating market value. The monthly market value provides the basis for the calculation of the market premium under the German Renewable Energy Act (EEG). The market premium received by solar and wind power plants varies with the prices the different renewable technologies can achieve on the EPEX spot market (market value). All installations larger than 100 kW (some 90-95% of wind power and 25% of solar power capacity) have to sell their electricity on the EPEX Spot exchange. The market premium, hence the support they get, is based on the difference between the feed-in tariff (FiT) and the (normally) lower market value, i.e. the price renewables achieve on the exchange. In a power market with variable renewable energy sources (vRES), power prices react to the fixed remuneration systems which sell electricity even at negative prices. However, renewable power plants that are not supported via a feed-in tariff will switch off at negative prices in order to avoid losses. For this reason, a non-supported plant will switch off more frequently than a supported plant and thus achieve lower sales volumes. Taking this into account, Energy Brainpool developed the sales value index. This is the average weighted price a technology (solar or wind) can achieve in the spot market at all hours during which the corresponding technology can feed in electricity. Only positive prices are considered in this concept. The sales value recognizes the fact that vRES are switched off in times of negative prices to avoid losses. So, put differently, the sales value is the average weighted price a technology (solar or wind) can achieve in the spot market in all hours during which the price is higher than or equal to 0 EUR/MWh. Figure 1: Example of a typical feed-in behaviour of subsidised and non-subsidised fluctuating renewable energies Conversely, the share of annual production that cannot be marketed due to prices less than 0 EUR/MWh, is not taken into account when determining the sales value. The marketable quantities, or sales volumes, will be lower than current marketed volumes of feed-in tariff supported vRES. Using a combination of the sales values and the sales volume for individual assumptions of annual production and full load hours of vRES, the sales revenue can be calculated. It is the revenue that a technology can receive on the electricity market (energy-only market),. This approach is explained in the following example calculation for a wind power plant. For a realistic assessment of the sales revenue potentials of unsupported renewables, the sales value in combination with the sales volume should be chosen. This metric takes into account that variable renewable energies do not feed in continuously and that operators of power plants switch off at times of negative prices. Offshore tenders with 0 €/MWh need to consider this index In mid-April, the first German tender for offshore wind turbines took place with surprising results. Dong Energy and EnBW offered a total of 1380 MW at a price of 0 cent/kWh. That means they will receive no FiT support. In the light of this result, the Energy Brainpool approach described above becomes pertinent to calculate the potential revenue of these projects. We have followed this approach to evaluate the revenue potential of offshore wind farms in the years from 2025 to 2035. Current power price scenarios from Energy Brainpool model the expected average revenues of offshore wind plants in Germany until 2050 in three scenarios characterized by different sensitivities: Standard, Conservative and Low-Price. Figure 2 shows the main differences between the three modeled scenarios. The three scenarios vary in their most important parameters: The Low price scenario and the Standard scenario follow the plans of the federal government in Germany with a share of renewable energies in gross electricity consumption of 80% in 2050. The Conservative scenario follows the “reference” scenario of the European Union which is based on a share of renewable energies in gross electricity consumption of 57% by 2050. Thus, the three scenarios cover a broad range of possible developments in a plausible and consistent way. Figure 3 shows the range of results of the sales values modelled for the period 2025 to 2035. Figure 3: Results of the sale values of the three different scenarios In the Standard scenario, an offshore wind power plant can achieve a sales value of 53 EUR/MWh in the year 2025. The sales value could rise to 76 EUR/MWh by the year 2035. In comparison, the sales value of the Conservative scenario, relative to the Low-price scenario, is 23 percent higher for the year 2025 and 37% higher in 2035. For the Standard scenario the sales value ranges in between. (The higher value in the Conservative scenario is caused by a higher general price level in this scenario and fewer negative prices.) As unsupported vRES must switch off more frequently at negative power prices, they cannot sell all quantities. Figure 4 shows the share of sales volumes compared to annual generation for onshore and offshore wind power from 2025 to 2035 in Germany. Figure 4: Sales volumes of onshore and offshore power plants in comparison Due to the high installed capacity of onshore wind, the “cannibalization-effect” for onshore installations is more serious than it is for offshore installations. A further factor influencing the sales volumes is the production profiles of the technologies, which are different for onshore and offshore wind farms. Based on these differences, sales volumes for offshore plants are higher than for onshore plants. In the Standard scenario, an average of 95 percent of the offshore production in the years 2025 to 2035 can be marketed at positive prices, compared to only 89 percent for onshore plants. This volume risk in the marketing of non-supported plants must be taken into account in any sound assessment of potential revenues. So for a hypothetical offshore plant with a size of 1 MW and expected full-load hours of 3200, the following revenues would result for the years 2025 and 2035: We believe our approach will help make plausible and solid assessments of the potential revenues of unsupported renewables projects. Risks due to negative electricity prices are taken into account, whereas at the same time the expectations of sales revenues compared to current market values are increased. The comparison of sales volumes for onshore and offshore plants is very relevant to sales revenue, since the volumes marketed at positive prices represent a decisive factor in the revenues of both technologies. Those who are interested in cost comparisons between wind power and other forms of power generation, may conclude that, if the most recent bids are based on rational economic calculations, the cost of offshore wind will be something between 53-76 EUR/MWh over 20 years. An in-depth discussion of the topics sales value, sales volume, sales revenue and the effect on unsupported offshore wind can be found in the White Paper „Valuation of electricity market revenues of fluctuating renewable energy sources“ and in the case study “Assessment of revenue potentials of offshore plants” by Energy Brainpool.
News Article | May 15, 2017
Longer blades, larger turbines, taller towers – the strive for bigger sized wind components has driven down levelised cost of electricity worldwide. In Northern Europe, government support through subsidies is expected to decrease as countries transition to auction-based mechanisms. The low levels make wind energy cost competitive with conventional fuels, exaggerated by the additional costs of environmental controls that fossils have to bare. See how renewables compare in cost effectiveness: http://bit.ly/2q2ufJv World’s first subsidy-free projects go to DONG and EnBW Germany’s first round of offshore wind power auctions has gone to DONG Energy and EnBW, with at least one of them bidding at the lowest rate of 0.00 EUR/kwH. The projects will mark the first in the world to rely solely on market prices rather than subsidy or other government support. MAKE predicts these economies of scale to make for a reduction in cost, resulting in comfortable IRR levels. To gage the expected returns of this development, see MAKE’s full IRR and LCOE analysis based on a case scenario: http://bit.ly/2pKJLci The forecast is looking stormy for wind power markets in the US and Canada over the next ten years. After an initial boom period, MAKE expects a slowing up of wind power in the US from 2020 due to ongoing challenges of project installation as well as looming policies by the Trump government. Further up North, growth of wind power will continue in Eastern Canada until 2019 before shifting towards Western States amidst shrinking electricity demand. Get an insight into what this means for North American wind power stakeholders in MAKE’s North America Regional Report: http://bit.ly/2p3KbK2 Vestas has again made it to the top of the list of MAKE’s turbine OEM rankings, setting the record for new capacity globally – only this time with an even greater distance to its competitors. Western turbine OEMs could outdo their Chinese counterparts thanks to their larger geographical footprint. The full overview on turbine OEMs is presented in as many as three new products on MAKE’s website: the Market Share Research Note, the Historical Wind Turbine OEM Database and the Wind Turbine OEM Market Share Forecast: http://bit.ly/2qX2FQL MAKE’s 2016 Regional Report for South American wind power markets predicted a slowing up of strong Mexico and Brazil amidst concerns about the prospects of wind at the auctions. Argentina and Colombia on the other hand were looking to be promising markets for new growth. One year onwards, MAKE’s upcoming ten-year Latin America Wind Power Outlook will assess the situation anew, again taking into account key drivers and barriers, such as political risks in the region. http://bit.ly/2r4xgJp After forecasting steady growth for wind power in the Middle East and Africa last year, MAKE’s upcoming regional outlook reports large new capacity additions from 2017 to 2026. This is largely thanks to the immense wind resources and the rapid learning of developers and turbine OEMs in the region, resulting in some of the cheapest bidding prices ever seen globally. On top of this, the long-awaited launch of Saudi Arabia’s tender program will make the country leader in the region by medium term. http://bit.ly/2q4UocE
Agency: European Commission | Branch: FP7 | Program: CP | Phase: ENERGY.2009.5.1.1 | Award Amount: 6.06M | Year: 2010
In post-combustion CO2 capture, a main bottleneck causing significant reduction in power plant efficiency and preventing cost effectiveness is the low flue gas CO2 partial pressure, limiting membrane flux, solvent selection and capacity. In pre-combustion CO2 capture, key bottlenecks are number of processing steps, possible low hydrogen pressure, and high hydrogen fraction in the fuel Global deployment of CO2 capture is restrained by a general need for prior removal of SO2. iCap seeks to remove these barriers by developing new technologies with potential for reducing the current energy penalty to 4-5% points in power plant efficiency, to combine SO2 and CO2 removal, and to reduce the avoidance cost to 15 /tonne CO2. iCap will: Develop solvents forming CO2 hydrates or two liquid phases enabling drastically increased liquid phase CO2 capacity, radically decreasing solvent circulation rates, introducing a new regime in desorption energy requirement, and allowing CO2 desorption at elevated pressures; Develop combined SO2 and CO2 capture systems increasing dramatically the potential for large scale deployment of CCS in BRIC countries and for retrofit in Europe. Develop high permeability/ high selectivity low temperature polymer membranes, by designing ultra thin composite membranes from a polymeric matrix containing ceramic nano particles. Develop mixed proton-electron conducting dense ceramic-based H2 membranes offering the combined advantages of theoretically infinite selectivity, high mechanical strength and good stability. Develop and evaluate novel coal and gas-based power cycles that allows post-combustion CO2 captures at elevated pressures, thus reducing the separation costs radically. Integrate the improved separation technologies in brownfield and greenfield power plants, and in novel power cycles in order to meet the performance and cost targets of the project
Agency: European Commission | Branch: H2020 | Program: IA | Phase: LCE-03-2015 | Award Amount: 25.07M | Year: 2016
DESTRESS is aimed at creating EGS (Enhanced geothermal systems) reservoirs with sufficient permeability, fracture orientation and spacing for economic use of underground heat. The concepts are based on experience in previous projects, on scientific progress and developments in other fields, mainly the oil & gas sector. Recently developed stimulation methods will be adapted to geothermal needs, applied to new geothermal sites and prepared for the market uptake. Understanding of risks in each area (whether technological, in business processes, for particular business cases, or otherwise), risk ownership, and possible risk mitigation will be the scope of specific work packages. The DESTRESS concept takes into account the common and specific issues of different sites, representative for large parts of Europe, and will provide a generally applicable workflow for productivity enhancement measures. The main focus will be on stimulation treatments with minimized environmental hazard (soft stimulation), to enhance the reservoir in several geological settings covering granites, sandstones, and other rock types. The business cases will be shown with cost and benefit estimations based on the proven changes of the system performance, and the environmental footprint of treatments and operation of the site will be controlled. In particular, the public debate related to fracking will be addressed by applying specific concepts for the mitigation of damaging seismic effects while constructing a productive reservoir and operating a long-term sustainable system. Industrial participation is particularly pronounced in DESTRESS, including large energy suppliers as well as SMEs in the process of developing their sites. The composition of the consortium involving major knowledge institutes as well as key industry will guarantee the increase in technology performance of EGS as well as an accelerated time to market.
Agency: European Commission | Branch: FP7 | Program: CP | Phase: ENERGY.2011.7.2-1 | Award Amount: 5.25M | Year: 2012
The growing share of electricity generation from intermittent renewable energy sources as well as increasing market-based cross border flows and related physical flows are leading to rising uncertainties in transmission network operation. In the mainland central Europe synchronous area due to large installations of renewable energy generation such as wind and photovoltaic, the difference between actual physical flows and the market exchanges can be very substantial. Remedial actions were identified by previous smart grid studies within the 6th European framework program in operational risk assessment, flow control and operational flexibility measures for this area. At the same time an efficient and sustainable electricity system requires an efficient usage of existing and future transmission capacities to provide a maximum of transportation possibilities. New interconnections and devices for load flow control will be integrated in future transmission networks and will offer new operational options. Further developments of coordinated grid security tools are one of the major challenges TSOs will face in future. The methods to be applied have to take into account all technological measures to enhance flexibility of power system operations. The zonal structure of the European energy market along with the legal responsibilities of TSOs for different system areas will continue to pose increasingly complex requirements to the system operators concerning the quality and accuracy of cooperation. The proposed UMBRELLA research and demonstration project is designed for coping with these challenging issues and boundary conditions. The toolbox to be developed will enable TSOs to ensure secure grid operation also in future electricity networks with high penetration of intermittent renewables. It enables TSOs to act in a coordinated European target system where regional strategies converge to ensure the best possible use of the European electricity infrastructure.
WasserWirtschaft | Year: 2015
The Iffezheim hydropower plant was commissioned in 1978. Due to it being designed for approximately 180 days of exceedance, the plant was predestined to be extended by a 5th unit right from the beginning. Several attempts to start planning failed because of the profitability of such a project, which became possible only in the wake by the German Renewable Energy Act for large-scale hydropower plants. After two planning phases that were very difficult, the construction of the 5th turbine was launched in the beginning of 2009. Not only was the realisation of the building pits in extremely small spaces very complex, but there were also various problems that had considerable repercussions on the time of construction and the execution of construction work. Unusual solutions in the unit's technology finally led to a successful result, which fully met the expectations in terms of production and availability.
Agency: European Commission | Branch: FP7 | Program: CP | Phase: ENERGY.2011.5&6.2-1 | Award Amount: 13.56M | Year: 2012
OCTAVIUS aims to demonstrate integrated concepts for zero emission power plants covering all the components needed for power generation as well as CO2 capture and compression. Operability and flexibility of first generation post combustion processes are demonstrated by TNO, EnBW and ENEL pilot plants in order to prepare full scale demo projects such as the ROAD and Porto Tolle projects that will start in 2015. OCTAVIUS will establish detailed guidelines with relevant data on emissions, HSE, and other operability, flexibility and cost aspects. In addition, OCTAVIUS includes the demonstration of the DMX process on the ENEL pilot plant in Brindisi. This second generation capture process can enable a substantial reduction of the energy penalty and operational cost. The demonstration is an essential step before the first full scale demonstration envisaged to be launched at the end of OCTAVIUS. Application to coal power stations but also NGCC will be considered. OCTAVIUS builds forward on previous FP6 and FP7 CCS projects such as CASTOR and CESAR. The main coordinating research institutes and industrial partners of these projects also take part in OCTAVIUS. Results of the clean coal research are provided by end-users, engineering companies and technology vendors partnering in OCTAVIUS. Each of the demo sub-projects (SP2 and SP3) is led by a power company. The demo sub-projects are supported by work packages in SP1 dealing with RTD support activities and common issues. Two work packages in SP0 are dedicated to management and dissemination actions respectively. The latter work package includes contacting stakeholders outside OCTAVIUS. OCTAVIUS gathers the leading organisations within the field of CCS and clean coal, covering the whole value chain from research institutes to end-users. The consortium consists of 5 research organisations, 2 universities, 1 SME, 1 engineering company, 2 equipment suppliers, and 6 power generators.
Agency: European Commission | Branch: FP7 | Program: CP | Phase: ENERGY.2011.3.7-1 | Award Amount: 7.10M | Year: 2012
Increasing the share of biomass for renewable energy in Europe demands conversion pathways which are economic, flexible in feedstock and energy efficient. The BioBoost project concentrates on dry and wet residual biomass and wastes as feedstock for de-central conversion by fast pyrolysis, catalytic pyrolysis and hydrothermal carbonisation to the intermediate energy carriers oil, coal or slurry. Based on straw the energy density increases from 2 to 20-31 GJ/m3, enabling central GW scale gasification plants for biofuel production. The catalytic pyrolysis reduces oxygenates in the oil to 13% enabling power and refinery applications. The fast pyrolysis and HTC processes of demo-size (0.5-1 t/h) are optimized for feedstock flexibility, yield, quality and further upscaling is studied. A logistic model for feedstock supply and connection of de-central with central conversion is set up and validated allowing the determination of costs, the number and location of de-central and central sites. Techno/economic and environmental assessment of the value chain supports the optimisation of products and processes. Application of energy carriers is investigated in existing and coming applications of heat and power production, synthetic fuels&chemicals and as biocrude for refineries. Promising pathways will be demonstrated over the whole chain. A market implementation scheme of ramping up energy carrier production and subsequent phase in of large scale gasification is developed regarding optimal technical and economic performance. Separation of nutrients and chemicals further increase economics. Seven industrial companies, three of which SME and six R&D institutions from 7 European countries cover expertise along the complete chain: Feedstock, conversion processes, separation and upgrading, transport & logistics, end usage and value chain assessment. Conversion plants in demonstration size will enable the proof of concept and further up-scaling to commercial size.
Agency: European Commission | Branch: FP7 | Program: CP | Phase: ENERGY.2010.8.1-1 | Award Amount: 5.06M | Year: 2010
Low-temperature process waste heat is primarily valorized to provide heat to other applications and, more rarely, to provide cooling or to produce electricity, which is often perceived to be less attractive. However, generating electricity does represent a rational alternative, since it may circumvent drawbacks linked to demand seasonality and location. The LOVE project aims at developing innovative technological solutions to generate electricity from low-temperature (< 120C) waste heat sources identified within various industrial processes, in general, and specifically in the cement industry which is among the more energy-intensive applications worldwide. Innovative thermodynamic cycles will be investigated while existing ones will be optimized. Advanced solutions for heat exchangers operating in hostile environments will be developed along with a particularly efficient turbine solution. A systemic approach will be implemented using a computer-aided tool providing for overall system optimization. Two small and mobile demonstration units will be built and tested in a partner laboratory and again installed and tested at two partner industrial sites. Further applications of the proposed technological solutions to other energy-hungry industrial sectors and to the waste heat recovery on CHP plants will also be evaluated. This project will result in important advances in applied cycle thermodynamics, as well as in industrial system modeling and optimization, thus allowing for significant technological developments which will be applied to the cement production sector. The constitution of the consortium partners ensures an excellent cross-fertilization towards the realization of the project objectives. The consortium combines the strengths of leading actors in the industrial sector of interest, of equipment manufacturers active in the segment, and of academic organizations with active research on-going in the field, along with two major European energy providers.
Agency: European Commission | Branch: FP7 | Program: CSA-CA | Phase: NMP.2013.4.0-6 | Award Amount: 1.33M | Year: 2013
The importance of aging of infrastructures, networks and industrial plants will continue to increase because of (a) need to continue operation of these infrastructures, networks and plants beyond the design life-time, (b) need to operate under changed conditions and (c) the increased role of existing plants in the optimized (smart) supply and utility networks of the future, e.g. as fall-back supply. The effective agreed strategies to address aging issues are yet to be developed and consistently applied. The project, SafeLife-X, will contribute to creating consensus on aging management including potential cascading and/or ripple effects. It will, thus, satisfy the demand within various industrial sectors and help match the EU Grand Challenges and the EU-2020 Strategy, and achieve goals of main stakeholders (e.g. EC, OECD, ECTP, ETPIS). The project will create a multi-disciplinary / multi-sector community able to answer the key issues related aging at EU & International level. The consortium includes members of the EU Technology Platforms ECTP (construction) and ETPIS (industrial safety) and a group of 25 experts to complement the expertise needed, and will be open to all interested parties. This community will meet, share experience and prepare a common vision for the future and main elements needed to realize it. The project will capitalize on best practices of modeling, asset integrity management, decision making, and cost-benefit analysis. CEN Workshop Agreement(s) will be initiated in the course of the project and the development of one European Standard (EN) on Risk-Based Inspection Framework pursued. New projects will propose input for Horizon 2020 within the Strategic Research Agenda & Roadmap. SafeLife-X will explore the issue of aging as an opportunity for new technologies, services and businesses primarily in service and construction sectors, the latter being the largest EU industrial employer representing 9.9% of the GDP and 14.9 million operatives.