Abstract
Decarbonizing the power sector forms a critical part of the global combat against climate change. This requires inter alia retirement of the global coal power plant fleet of 2,100 GW. Although a significant part of this capacity is aging, there are complex issues that need to be addressed including the economic viability of existing coal plants in some countries relative to renewable projects and barriers to exit of coal. We have used detailed power plant level operational cost data for ten developing countries with significant share of coal and compared these with levelized cost of renewables, to demonstrate that competitiveness of coal varies significantly across different geographies. Countries like India where renewable projects have been highly competitive and there is an aging fleet of coal plants many of which are far away from mines, are already highly uncompetitive. On the other hand, countries like South Africa that have relatively inexpensive coal plants, but the average cost of renewable projects have not yet dropped sufficiently (as of 2020), will require special efforts to phase out coal completely beyond plants that have reached, or gone well past their technical life. Accelerated retirement of coal would require a new business model that allows repurposing some of these sites for alternative usage including generation from renewables, conversion of the incumbent generator into a synchronous condenser coupled with a fly wheel to provide reactive power and inertia; and installation of energy storage systems. As a repurposed coal plant for energy related activities can retain part of the workforce, it can also address some of the complex social issues. In order to develop a comprehensive repurposing program at a national level, the process needs to follow a least-cost planning methodology to identify prospective coal plant candidates for repurposing and then undertake a cost-benefit analysis of individual projects. We have demonstrated this methodology using a case study for Morocco.
Highlights
Several a ssumptions were necessary due to data limitations and to make results comparable across the country case studies: (a) baseline capacity factor is assumed to be 60% for all existing coal plants to maintain comparability; (b) the commissioning year of the plant is determined by the oldest operating unit; (c) additional transmission costs to connect renewable energy and grid balancing costs are ignored that may be quite significant at higher level of renewable penetration[29] – this assumption in a way offsets for thefact that capital costs for existing coal is treated as sunk; (d) no carbon tax is imposed on the generation; (e) all costs are in USD (2020 value)
42% of coal plants are old, especially those in India, South Africa, Ukraine and Kazakhstan. 36% are new with India accounting for 75%of the new units, though Vietnam and Pakistan have relatively young but small fleets
The a bundance of coal reserves in Ka zakhstan and South Africa can bring down the short run marginal cost (SRMC) to $25/MWh and $34/MWh, respectively (Figure 3)
Summary
Globa l CO2 emissions reached 33.4 billion/giga tonnes (bt or gt) in 2019 with significant contribution from the developing nations over the last two decades, reducing the contribution from US and Europe to approximately a third of total emissions. Our first focus in this paper is to undertake a rigorous comparison of LCOE of renewable projects based on IRENA’s 2019 data a nd realistic cost data for coal plants in a number of developing countries deployed as part of power system planning studiesin these countries. Identification of coa l projects that have become uneconomic is a key first step that can start with a simple LCOE analysis This will need a more extensive planning study to assess the requirements for generation (and ancillary services) from a system perspective, namely: can these coal plants be safely retired and repurposed for the system to meet demand and continue to operate in a secure way? Once a set of pla nts is identified to be potential ca ndidates, a costbenefit analysis for each individual plant will need to be conducted to ascertain if repurposing as a RE+FLEX facility ca n bring sufficient benefits to wa rrant the investment and mitigatethe coal decommissioning impacts
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