Methodology for Analysing Electricity Generation Unit Costs in Renewable Energy Sources (RES)

Ryszard Bartnik,Dariusz Pączko

doi:10.3390/en14217241

Abstract

Due to the constant trend of building wind turbine sets and photovoltaic cells, the so-called renewable energy sources, it is important to develop a mathematical model that will allow us to analyse the economic viability of their operation. By using this model, multivariate calculations should be carried out and developed in the form of universal nomograms that will allow us to estimate this viability almost on an immediate basis. In this paper, such a model for the unit cost of electricity production from renewable energy sources is presented. It is based on a continuous-time Net Present Value notation. The multi-variant calculations performed with it take into account different subsidy levels and operating time of the renewable energy sources. The paper presents values of unit costs of electricity production from renewable energy sources and values of maximum subsidies for this production. It turns out that subsidies are necessary for renewable energy sources to exist on the energy market. An additional disadvantage is the fact that renewable energy sources are not able to provide a stable electricity supply throughout the year.

Highlights

Energies 2021, 14, 7241. https://In recent years, according to the European Union (EU) policy, a growing emphasis is placed on sustainability and CO2 reduction
The investment outlays J0 discounted at the moment of starting the renewable energy sources (RES) operation are expressed by the formula [23,28]: R=
The total maximum discounted net profit NPVmax achieved in the entire range of years h0, T i of RES operation is determined from the following equation (see Formula (1)): τexpl

Summary

Introduction

In recent years, according to the European Union (EU) policy, a growing emphasis is placed on sustainability and CO2 reduction. The advantage of a techno-economic analysis of the electric power system made with a continuous model is, among other things, the possibility of specifying which energy technologies should be invested in It allows for predicting how the energy market is affected by the prices of energy components and unit pollution tariffs and how their values change over time. The model is completely innovative, allowing to determine the economical efficiency of RES for absolutely arbitrary and time-varying parameters and input quantities affecting their operation, as well as for any time of their operation, any investment outlays, etc It should be once again explicitly verbis stated that the model presented in this paper makes it possible to show the nature of the time course of the economical effectiveness values of RES sources and, extremely importantly, that it is a dynamic model

The Methodology in the ‘Continuous’ Record of the Analysis of the Economic

The Highest Achievable Profit NPVmax from Operating a Renewable Power

The Lowest Achievable Profit NPVmin from Operating a Renewable Power

Universal Charts of Unit Costs of Electricity Production in RES

Summary and Final Conclusions