Investigation on survivability of the entity investing in integrated energy system service under contract for difference

Abstract

As an important measure of promoting renewable energy sources (RESs), Integrated Energy System (IES) has caused wide concern. However, investors are staying on the sidelines due to the shortage of the details about investment returns. Therefore, here investigates the survivability of investment entity in Chinese IES service under contract for difference (CFD). Integrated with the intricate relationship of different entities, here constructed three evaluation models including the dynamic payback period (DPP), net present value (NPV) and internal rate of return (IRR). Considering the multipath feature of IES operation, the priority of energy utilization is proposed to promote RES consumption. According to the existing circumstance of RESs and IES, 12 operation scenarios are classified to investigate economic benefit of investment entity. Plenty of simulations show that the project benefit is affected by the contract tariff risk bigger, by the contract cycle risk slighter. Also, RESs absorption rate and RESs increase have significant influence on the investment benefits. The performances of IES with combined supply mode (CSM) are superior to that with sub-supply mode(SSM). With Chinese existing technologies and policies, the optimal scenario is S2 of which the payback period is about 6.38 years, and the internal rate of return is 18.47 %.