Invoice Ponton
On this article, I’ll quantify the associated fee to UK electrical energy prospects of doubling wind energy era. This price can be along with what prospects are paying at the moment. Consider it as a premium one pays to advantage sign.
Let’s begin by taking a detailed have a look at the present state of electrical energy era within the UK. In 2022, the UK derived: 24% of its electrical vitality from wind era, 43% from fuel turbine era and 33% from different sources comparable to coal, nuclear, hydro and biomass. Desk 1 particulars the precise portions in MWH for every energy era supply. The info used to derive these portions was downloaded from GridWatch with energy era in MW from every supply noticed at 2.5 min intervals [1]. Determine 1 is a stacked graph of the wind, fuel turbine and different energy era. The graph is instructive in that it reveals wind era various in magnitude over time and fuel turbine era being dispatched to offset these fluctuations.
Desk 1:
Determine 1:
The UK at the moment has 28 GW wind energy capability, 14 GW of onshore and 14 GW of offshore, with the potential to generate 245,280 GWH per 12 months [2]. It truly generated 61,631 GWH in wind vitality in 2022 or roughly 25% of the overall wind energy capability.
To grasp the affect {that a} doubling of wind energy capability would have on wind vitality era, one must double the worth of wind energy era at every remark level within the 2022 GridWatch dataset. It leads to complete wind era of 123,311 GWH per 12 months. As well as, fuel turbine energy era must be lowered at every interval by the quantity required to maintain the brand new sum of wind and fuel turbine energy era equal to the unique sum. Nevertheless, at intervals the place a doubling of wind energy exceeds the unique sum, wind energy ought to be restricted to the worth of the unique sum. As well as, fuel turbine energy era should not fall under 2,000 MW at any time. (That is additionally the case with the precise knowledge the place fuel turbine energy era solely falls under 2,000 MW for 0.25% of the time) These constraints lead to a curtailment of wind vitality era of 31,438 GWH (or 25.5% of the overall wind vitality generated) and helpful wind vitality era of 91,873 GWH (or 35% of the overall vitality offered to the grid) as detailed in Desk 2. Determine 2 is a stacked graph of yearly knowledge below the doubling of wind energy situation.
Desk 2
Determine 2
You will need to perceive {that a} doubling of wind energy era doesn’t allow fuel turbine era capability to be lowered. The legacy fuel turbine capability should be obtainable at a second’s discover to ramp up and compensate for vacillations in wind energy. Subsequently, the price of working and sustaining (O&M) fuel turbine era shouldn’t be diminished. Nevertheless, fuel turbine era is lowered by 30,217 GWH per 12 months leading to 194,327,778 MMbtu of thermal vitality financial savings or $971,638,889 of gasoline price financial savings per 12 months as detailed in Desk 3, assuming the prior 20-year common of $5 USD/MMbtu [3].
Desk 3
The capital price of constructing wind energy era, excluding financing expense, is $6,041 USD/kW for offshore and $1,718 USD/kw for onshore [4]. An extra 14 GW offshore and 14 GW onshore would price in capital $84,574,000,000 and $24,052,000,000, respectively. The extra wind energy era O&M price is $115 USD/kW-y for offshore and $27 USD/kW-y for onshore [4]. An extra 14 GW offshore and 14 GW onshore would price in O&M $1,610,000,000/12 months and $378,000,000/12 months, respectively, as proven in Desk 4.
Desk 4
Assuming a WACC after tax of 4.4% [5], financing the capital funding over the 20-year mission life would price UK electrical energy prospects $8,260,542,875 per 12 months. The wind energy O&M price minus the CCGT gasoline financial savings add an extra $1,016,361,111 per 12 months for a complete of $9,276,903,985 per 12 months. The overall price over the lifetime of the mission is $185,538,079,707 (or NPV of $121,991,131,529). With roughly 28,000,000 electrical energy prospects within the UK, the extra price for doubling of wind energy capability is $6,626 (or NPV of $4,357) per buyer.
Shifting the UK wind/CCGT era combine from 24%/43% to 35%/31% by doubling wind energy capability at a price of $185B should be disappointing to true believers within the advantage of wind energy. Furthermore, the price of this scheme dwarfs the price of a scheme that features battery storage as a means of accelerating the contribution from wind energy era.
References:
1. http://www.gridwatch.templar.co.uk/obtain.php
2. https://www.thewindpower.internet/statistics_countries_en.php
3. https://tradingeconomics.com/commodity/uk-natural-gas
4. https://www.eia.gov/outlooks/aeo/assumptions/pdf/table_8.2.pdf
5. https://www.iea.org/articles/the-cost-of-capital-in-clean-energy-transitions
