Projected Costs of Generating Electricity - OECD Nuclear Energy ...

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Figure A10.4 also shows the changes in CCGT plants’operating costs in relation to varying gas prices. 6 The issue here is to understand whether coal-fired or CCGT plants are more competitive at different fuel prices, and at what CO 2 price are these technologies equivalent in terms of competitive bids. The breakeven CO 2 price equals 18.5 €/tonne of CO 2 under the assumptions that the gas price is at 3.5 €/GJ, and the coal price is estimated at 1.5 €/GJ. Figure A10.4 – Sensitivity of short-run marginal costs to gas price variations €/MWh 70 60 50 40 30 SRMC high fuel costs CCGT at 4.59 €/GJ SRMC base cost CCGT at 3.5 €/GJ SRMC base case coal SRMC low fuel costs CCGT at 1.89 €/GJ 18.5 €/tCO 2 CO 2 price €/tCO 2 34 €/tCO 2 20 10 0 0 5 10 15 20 25 30 35 40 45 50 This breakeven price of CO 2 is very sensitive to the fuel prices. If gas prices rise to 4.59 €/GJ, the maximum European gas import price over 1998-2001 period (see Figure A10.3), the carbon price would have to rise to 34 €/tonne of CO 2 to equalise the competitiveness of coal and gas. A 40% change in gas prices leads to an 84% change in the breakeven price. The relative competitiveness of coal and gas is twice as sensitive to gas price differentials as it is to CO 2 price. Given the sensitivity of the breakeven price to gas assumptions, the switch in competitiveness between the two technologies could occur in a range 7 of different CO 2 price, depending on plant specifics (location, fuel price, efficiency, etc.). If, however, the gas price falls under 2.23 €/GJ, CCGT plants will always be more competitive than coal plants at a 1.50 €/GJ coal price, regardless of any carbon emission price. In this case, the price of coal as a fuel for power generation will naturally decline in order to allow a better competitiveness of this type of fuel. A response from coal producers would then be likely to occur in order to maintain their market shares. The scenarios for the range of coal prices are based on the ARA index variations between January 2000 and August 2003. During this period, the coal price varied between 0.95 €/GJ to 1.54 €/GJ (see Figure A10.5). This breakeven price of CO 2 is also sensitive to the coal prices, but to a lesser extent than to gas price variations. If coal prices rise to 1.66 €/GJ, the maximum price forecasted in 2010, the breakeven CO 2 6. A similar sensitivity analysis could be made for varying coal prices. 7. The range of CO 2 breakeven prices could be from zero (if the gas price makes the CCGT plant more competitive than the coal plant) to an upper end (34 €/tonne of CO 2 ). 224
Figure A10.5 – Steam coal price variations January 2000 to August 2003 (ARA Index) USD/GJ 1.6 1.2 0.8 0.4 0.0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct 2000 2001 2002 2003 Source: Datastream Figure A10.6 – Sensitivity of short-run marginal costs to coal price variations €/MWh 70 60 50 SRMC coal high fuel costs at 1.66 €/GJ SRMC base case coal at 1.50 €/GJ SRMC base case CCGT at 3.50 €/GJ SRMC coal low fuel costs at 0.95 €/GJ 40 18.5 €/tCO 2 29 €/tCO 2 17.7 €/tCO 2 CO 2 emission price €/tCO 2 30 20 10 0 0 5 10 15 20 25 30 35 40 45 50 price decreases to 17.7 €/tonne of CO 2 . If, however, the coal price falls to 0.95 €/GJ, the carbon price would have to rise to 29 €/tonne of CO 2 to equalise the competitiveness of coal and gas (see Figure A10.6). A 28% decrease in coal prices leads to a 57% increase in the breakeven point. In this case, the relative competitiveness of coal and gas is less than twice as sensitive to coal price differentials as it is to CO 2 price. Similarly, a sensitivity analysis on the CCGT plants’ efficiency highlights the effects on the CO 2 price which makes the two technologies equivalent in terms of competitiveness. The efficiency rate in the CCGT base case equals 49%. As illustrated on Figure A10.7, at a low efficiency rate of 45% for existing plants, there is a 9% increase in the CCGT’s fuel costs and an 8% increase in the short-run marginal cost (SRMC). Henceforth, the CO 2 price which equalises the competitiveness of coal and CCGT plants rises by 32% to 24.5 €/tonne of CO 2 . 225
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NUCLEAR ENERGY AGENCY INTERNATIONAL
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ORGANISATION FOR ECONOMIC CO-OPERAT
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Table of Contents Table of Contents
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Figures Figure 3.1 Specific overnig
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The introduction of liberalisation
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150 USD/MWh at a 5% discount rate a
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The technologies and plant types co
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locations and/or very favourable co
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conclusions of the study were used
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Chapter 2 Input Data and Cost Calcu
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equipped with emission control devi
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Table 2.2 - Exchange rates (as of 1
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Table 2.4 - Coal plant specificatio
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Table 2.7 - Wind and solar power pl
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Table 2.10 - Other plant specificat
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Figure 3.1 - Specific overnight con
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exchange rates, the coal prices var
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Construction time Gas-fired power p
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USD/MWh 70 60 Figure 3.5 - Levelise
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O&M costs The specific annual O&M c
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Cost ranges for coal, gas and nucle
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Ratio 1.9 Figure 3.12 - Cost ratios
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Table 3.11 - Overnight construction
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Table 3.14 - Projected generation c
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Except for the offshore plant in th
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At 10% discount rate, the levelised
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At 5% discount rate, hydroelectrici
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Table 4.6 - Projected generation co
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A CHP plant typically supplies heat
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Figure 5.2 - Levelised costs of ele
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lower unit capital and operating co
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cost calculation for some 130 power
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It should be stressed that the plan
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Concluding remarks The lowest level
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Portugal Mr. António B. Gomes EDP
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Table A2.1 - Nuclear plant investme
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Overnight Capital Costs: Constructi
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Table A2.7 - Gas-fired (including C
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Table A2.10 - Wind plant investment
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Cost structure of supported green e
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The highest investment cost arises
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The expected development of the per
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● ● Autoproducers. These firms
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Canada The electricity market situa
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Natural gas - combined cycle gas tu
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Denmark Basic data Denmark has abou
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In the future, both an increase in
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nuclear operator Teollisuuden Voima
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these power generation methods. Two
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Figure 5 - Competitiveness of vario
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2004. It envisages the gradual incr
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Table 4 - Gross electricity supply
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● ● ● ● ● ● ● ● ●
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Electricity generation costs The to
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photovoltaic device. Finally the su
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Table 1 - Installed electric power
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Japan Consumers in Japan are suppli
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BPE will be established not as a bi
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Coal Coal fired power plants have b
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A new sewage treatment plant with a
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The interconnections between Portug
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In order to respond to these basic
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efficient energies and is reducing
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Liberalisation Basic restructuring
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External costs for electricity prod
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At the beginning of plant operation
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and high ash, moisture and sulphur
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The White Paper did not contain pro
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Table 7 shows the projected load fa
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other investment options available
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The impurities contained in coal ar
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“ultra-supercritical” condition
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unmineable coal seams. All three pr
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Light water reactors require enrich
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concerns. Consequently, the natural
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generators and power electronics el
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conventional fossil-fired plants. B
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● ● very effective and is used
Page 175 and 176: Appendix 5 Cost Estimation Methodol
Page 177: into account in the real price of g
Page 180 and 181: ● ● ● ● Factors under the c
Page 182 and 183: and small power plants. Although th
Page 184 and 185: The general approach remains useful
Page 186 and 187: Two US economic analyses of nuclear
Page 188 and 189: assume future prices follow a rando
Page 190 and 191: The effects of price risk on techno
Page 192 and 193: The option to delay is embedded in
Page 195 and 196: Appendix 7 Allocating the Costs and
Page 197 and 198: Further Fourier’s law for heat tr
Page 199 and 200: Figure A7.4 - The energy conversion
Page 201 and 202: This yields: β = 0.153 α. If α e
Page 203: It is emphasised that depending on
Page 206 and 207: 1 st oil shock 2 nd oil shock Saudi
Page 208 and 209: Table A8.2 - Expected lower and upp
Page 210 and 211: Reliability in electricity systems
Page 212 and 213: is also highly dependent on the typ
Page 214 and 215: In the ILEX study 5 and in another
Page 216 and 217: an increasing share of wind is the
Page 218 and 219: able to work out the optimal operat
Page 221 and 222: Appendix 10 Impact of Carbon Emissi
Page 223 and 224: costs of generation. The introducti
Page 225: price at 3.5 €/GJ are the next fa
Page 229 and 230: The longer term impact on investmen
Page 231 and 232: Appendix 11 List of Main Abbreviati
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