How Smart Power Generation Could you Up Millions in Direct Costs
With climate change mitigation high on the political agenda, new regulations and market structures emerging, and subsidies prevalent in many markets, the field of power generation is undergoing perhaps the most significant shift in its 130-year history. Most agree that the amount of intermittent renewable power generation will increase, and that more flexibility will be needed in power systems to accommodate the intermittency. What is missing, however, is an understanding of the cost implications of these changes.
In late 2012, Baringa Partners and Imperial College London set out to put a value on flexibility and the service it provides to a power system, specifically in the presence of a considerable amount of intermittent renewable generation, e.g., wind and solar. The results of this pioneering study clearly indicate that flexibility has tremendous value on a system level. Specifically, the study found that adding 4.8 GW of Smart Power Generation to the UK study could create annual savings of up to £550m by 2020, mainly by optimizing reserve allocation as well as the operations of existing, less flexible capacity.
Unfortunately, current market structures in Europe offer very little scope for monetizing the value of flexibility. This realization opens some interesting discussions on market structures. For instance, the idea of a capacity mechanism is gaining ground in many countries. In light of the study’s results, however, what’s most urgently lacking is flexibility not capacity, and thus a capacity mechanism will not necessarily ensure system stability in the most economic way. Consequently, other market arrangements should be studied.
This webinar presents a unique opportunity to increase your understanding of the importance of flexibility and the value it can provide in the future power system, as well as the potential market arrangements to incentivize flexibility.
Issues that are addressed in this webinar:
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Watch the FREE webinar here.