Potential value propositions for CSP
Symposium on The future of
Iain MacGill
concentrating solar power in
Associate Professor, School of Electrical Australia: transitions and benefits
Engineering and Telecommunications
UTS ISF, ASME and Austela
Joint Director (Engineering), CEEM
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
Potential value propositions for CSP
2
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
Inherent demand
storage (eg. hot
water,) or additional
(eg.
EV) propositions for CSP
Potential
value
Aggregated
demand &
Dx network
(adapted from ENA, 2009)
3
Value in the NEM – costs, prices, tariffs...
Generator 1
Generator Y
Derivative trading for risk, investment
Intentions,
offers &
payments
40%
Multi-region
five-minute
energy
& FCAS
markets
Intentions,
bids &
payments
40%
Electricity
flow
Transmission
Sector: –
TNSPS
10%
Electricity
flow
Retail
Markets
Retailer 1
Retailer Z
AEMO: market & system operator
Generation
Sector:large
generators
Retail
sector
End-users
cash flow
50%
Generation
Sector
Distribution
Sector: DNSPS
Electricity
flow
Potential value propositions for CSP
(adapted from Outhred, 2007)
End-use
Sector:end-use
equipment
4
4
Two ‘worlds’ for renewables integration
Distributed
Renewables +
other DRs
Centralised
Renewables
Derivative trading (cashflow?)
Intentions, Multi-region
five-minute
offers &
payments energy
& FCAS
cash flow markets
Intentions,
Retailer 1
bids &
payments
40%
AEMO:
market & system operator
Retailer Z
Retail
Markets
Embedded
generators
End-users
cash flow
50%
Generation
Sector:large
generators
Retail
sector
10%
Generation
Sector:Transmission
Distribution
Energy flow
large
Sector
Energy flow sector
generators
Potential
value propositions for CSP
End-use
Energy flow
sector
(including DR
5
The NEM for energy resources w/o inherent
energy storage… and as penetrations grow
Potential value propositions for CSP
(AEMO, 2011)
6
Value – nature of underlying RE resource
Potential value propositions for CSP
(AEMO, 2011)
7
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.
(Forrest and MacGill, 2013)
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
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)
(Cutler, Boerema,
Potential value propositions
for CSP MacGill and Outhred, Energy Policy J., 2011)
9
Wider energy storage value propositions
Potential value propositions for CSP
(Sue, 2013)
10
Recent valuation study for the NEM
Potential value propositions for CSP
(Sue, 2013)
11
Potential storage value proposition
Potential value propositions for CSP
12
Aggregation key.. but difficult in practice
Potential value propositions for CSP
(Sue, 2013)
13
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 frameworks that drive appropriate deployment at speed and scale required
 Alternative scenarios
– BAU a plausible longer-term proposition?
Potential value propositions for CSP
14
CSP plays a valuable complementary role
Potential value propositions for CSP
(AEMO, 2013)
15
UNSW least cost 100% RE findings
A$b/yr for AETA high and low
technology cost scenarios
Without
transmission
With
transmission
Low
cost
High
cost
Low
cost
High
cost
19.6
22.1
21.2
24.4
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
Generation mix
By capacity
Low AETA
cost scenario
High AETA
cost scenario
(Elliston et al, 2013)
By energy
Wind
PV
CST
Pumped hydro
Hydro
GTs
+ 8.8 TWh
spilled
+ 24.9 TWh
spilled
16
AEMO 100% RE – least cost capacity mix
Potential value propositions for CSP
(AEMO, 2013)
17
AEMO 100% RE – least cost generation mix
Potential value propositions for CSP
(AEMO, 2013)
18
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
Potential value propositions for CSP
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Thank you… and questions
Many of our publications are available at:
www.ceem.unsw.edu.au
PV and the Merit Order Effect in the NEM