Economic Energy Allocation of Conventional and Large-Scale PV Power Plants

Abstract

During the past few decades, rapid progress in reducing the cost of photovoltaic (PV) energy has been achieved. At the megawatt (MW) to gigawatt (GW) scale, large PV systems are connected to the electricity grid to provide power during the daytime. Many PVs can be installed on sites with optimal solar radiation and other logistical considerations. However, the electricity produced by the PV power plant has to be transmitted and distributed by the grid, which leads to more power losses. With the widespread commissioning of the large-scale solar PV power plants connected to the grid, it is crucial to have an optimal energy allocation between the conventional and the PV power plants. The electricity cost represents the most significant part of the budget in the power distribution companies, which can reach in many countries billions of dollars. This optimal energy allocation is used to minimize the electricity cost from buyers’ (distribution companies) point of view rather than sellers’ (owners of power plants, i.e., investors) point of view. However, some constraints have to be considered and met, such as water demand, network limitations, and contractual issues such as minimum-take energy. This paper develops a model for the economic energy allocation of conventional and large-scale PV power plants, which considers both the operational aspects and the contractual provisions. The model can be used either in the design or operation phases to minimize the operating cost. Moreover, the proposed model can be used for budgeting tasks. The developed model is entirely generic and can be used for any country or electricity system regardless of the PV energy contribution. Furthermore, the Al-Karsaah power plant located in Qatar is discussed as a case study to validate the claimed contribution.