Zeljko Tomsic

Probabilistic analysis of electrical energy costs comparing: production costs for gas, coal and nuclear power plants

Abstract This paper considers the probabilistic analysis of lifetime discounted costs of electrical energy if produced in coal-fired, gas-fired and nuclear plants entering in operation in Croatia (similar as is in neighboring European countries) versus the end of this decade. The calculation considers all relevant costs in the period of loan repayment and after this period to the assumed end of plant life. The cost data are defined by best-estimated lower and upper cost limits with a probability distribution within these limits. An important factor for comparison of costs is related to assumed limits of rates of fuel cost changes for considered power technologies during plant operation time (during a period approximately from 2010 to 2040). These changes depend upon potential frictions in the fuel market in the considered period. The calculation is performed by using the Monte Carlo method (2000 calculations per technology) and STATS computer code. From the results of the simulations it can be concluded that the distribution of levelized bus bar costs for the combined cycle gas plant is in the range 4.5–8 US cents/kWh, with a most probable value of about 5.8 US cents/kWh; for coal-fired plants the corresponding values are 4.5–6.3 US cents/kWh and 5.2 US cents/kWh and for the nuclear power plant the corresponding values are in the range 4.2–5.8 US cents/kWh and a most probable value of about 4.8 US cents/kWh. In addition, the importance of considering the environmental impact of power plants and the application of corresponding external costs in the analyses of relative competitivity of power technologies is discussed.

Design and Evaluation of Policy Instruments for Energy Efficiency Market

The concept of energy efficiency market as basis for energy efficiency policy making enables better understanding of the overall environment where policy needs to be implemented. Based on the market assessment, policy makers are faced with the challenge of designing policy instrument that will release identified brakes to energy efficiency. Following the market assessment, the framework for design of policy instruments and measures needs to be established. It uses a theory-based approach to provide the insight in the supposed operation of an instrument or measure and integrates the evaluation of impacts already in the design phase. In this paper, the authors categorized policy instruments in several categories and additionally described which side of the market they address and in which typical development stages of the market development their application is the most needed. For every step in the process, indicators are defined and success or failure “values” of these indicators determined. This approach can give clear picture to the policy makers what needs to be monitored and evaluated ex post. This ex post evaluation will enhance the knowledge of instruments operation. In this paper, the authors established a detailed theory (theory-based approach) on how the instrument is supposed to work. Although this theory-based approach is known and utilized in project management, it is not mainstreamed in energy efficiency policy.

Overview of foresight techniques in energy supply

Insuring long term stability of power supply is the reason why planning of technological development in the energy sector has become a question of great importance for governments worldwide. This is also the reason why the number of national and international energy foresight exercises, based on combining forward-looking, policy-making and participative approaches to bringing long-term considerations into decision-making, is constantly increasing. This paper presented a multilevel analysis of using foresight principle in consideration of possible options for energy supply future.

Evaluating accuracy and uncertainty of wind speed estimation by using multiple wind measurements on a site

The objective of this paper is to discuss the accuracy and uncertainty of the standard WAsP model in determining the wind speed on a Croatian bora dominated site by using multiple wind measurements. The results show that on Croatian locations, however simple they might seem, it is essential to establish multiple wind measurements. Even with high quality measurements set at hub-heights and at a reasonable distance from a prospective wind turbine on a location of simple configuration, it is possible to expect significant errors in wind speed assessment.

Securing energy supply by harnessing negajoules

Energy efficiency is often referred to as the best, cheapest and the least environmentally damaging source of energy supply. To prove this statement, the comparison of energy saving costs and costs of energy produced from new generating capacities has been performed. The results confirm energy efficiency as the most feasible energy supply option, which can significantly contribute to the improvement of the overall energy supply security in a country. However, despite these benefits and policy recognition of energy efficiency, vast potential of this new energy source, often referred as “negajoules”, is still untapped. The main reason behind this policy failure is only declarative and not real political commitment and a complete lack of focus on implementing capacities that would ensure full policy uptake.

Analysis of power plants competitiveness using stochastic methods

The paper describes the application of a stochastic method for comparing economic parameters of future electrical power generating systems including conventional and nuclear power plants. The input data for calculation are cost elements defined in the frame of certain limits of expected occurrence with a probability distribution within the limits. The method is applied to establish competitive specific investment costs of future nuclear power plants when compared with combined cycle gas fired units combined with wind electricity generators using best estimated and optimistic input data.

Power generation mix optimization using mean-lower partial moments (LPM) portfolio theory

Optimization of power generation technology mix using portfolio theory is related to finding the optimal set of technologies under acceptable level of (price) risk which will provide minimal cost of electricity production for the generation company, or provide maximum profit. On the other hand, a generation company can set the cost of production as a fixed parameter, and then look for optimal set of technologies which would minimize price risk.The classical approach to power generation mix optimization considers renewable energy as a generation technology without price risk, or to a certain extent considers that risk being very small. In this work intermittency of renewable energy sources and accuracy in the day-ahead forecast was taken into account in the evaluation of price risk of those technologies. Energy not delivered because of wrong forecast must be bought on the balancing market and poses a burden on the price of production from those technologies. Portfolio optimization is performed using mean-LPM approach and compared to the results given by mean-variance approach. The results of the optimization show that based on the historical prices mean-variance and mean-LPM optimization give similar results only in case of second order LPM. Other orders of lower partial moments can account for risk aversion of the investor or decision maker.

Use of solar thermal systems in camping sites - Project Solcamp

Camping sites represent one of the most highly suitable locations for solar thermal systems for preparation of domestic hot water (DHW). Not only that hot water demand at camping sites and the solar energy supply coincide almost perfectly - during the peak season from May until October approx. 75% of annual irradiation occurs - but also the owners and the clients of camping sites show environmentally friendly behavior and are in the most cases promoters of sustainable development at the local level. Despite all that, usage of solar thermal energy in camping sites represents exception rather than routine - even in Mediterranean region with high number of solar days and high irradiation, such as Croatia. The project Solcamp aims to increase number of solar thermal installations on camping sites with targeted marketing and providing its owners with information and basic planning data for their site free of producerspsila interest. In addition to cost effectiveness of solar thermal systems usage, additional value for camping sites is their classification as ldquocamping site in accordance with environmentrdquo, which attracts modern guests and could be used for advertising purposes.

Perspectives of renewable energy use in Croatia

The current share of renewable energy sources in electricity production in Croatia is very high, around 50%. Nevertheless it must be expected that the share of renewables will have to rise and efficient strategies must be examined and adopted. Croatian government has recognised the important role renewable energy sources could play in Croatian energy and electricity supply. The most important barrier for a wider deployment of renewables in energy production is their cost which is still above costs of conventional energy sources. As energy market is currently undergoing the process of liberalisation, support mechanisms that are compatible with open market philosophy must be adopted. In the article, characteristics of the Croatian power system, the expected consumption growth and possible future role of renewables in energy and electricity production has been presented. The current legislative framework relevant for renewables has been analysed and discussed.

External costs: an attempt to make power generation a fair game (case study Croatia)

External costs of electricity represent the monetary value of the environmental damage caused by electricity generation. They are here calculated applying the impact pathway methodology on Croatian specific conditions. This paper estimates the external costs of coal and gas fired power plants determined as main candidates for Croatian power system expansion till 2030. It is analyzed how the estimated external costs, when incorporated into total production costs, would affect the competitiveness of fossil–fired plants compared to other electricity generation options, i.e. how they influence the optimal expansion strategy of the Croatian power system.