The real cost of deep peak shaving for renewable energy accommodation in coal-fired power plants: Calculation framework and case study in China

Abstract

To fulfill the commitment to carbon emission reduction, the grid penetration rate of renewable energy in China has increased rapidly. High penetration of renewable energy brings a significant challenge to the peaking ancillary services providers. In northern China, coal-fired units still play a significant role in peak-shaving, especially in areas where pumped hydropower, gas-fired power, and controllable load are limited. The current peaking ancillary service market in China cannot effectively mobilize the enthusiasm of peaking power plants. Fair calculation of the peak-shaving costs of coal-fired power plants is significant for formulating an ancillary service market mechanism. Current research on peak-shaving costs calculation of coal-fired power fleets is limited to the operating coal consumption costs, wear-and-tear costs, and the additional environmental costs (do not contain pollutant tax and ashes treatment). However, this costs calculation lacks consideration of the additional peaking coal consumption costs, the additional peaking environmental costs with pollution tax and ashes treatment, and the power output loss caused by the peak-shaving process. Therefore, this study proposes a novel calculating framework that includes all the potential peak-shaving costs of the coal-fired generating units mentioned above. To evaluate the proposed framework, a case study was conducted in a coal-fired power plant in Dalian City, Liaoning Province, China, in 2020. The results show that the total costs of peak-shaving in 2020 was only 4.96 million Yuan according to the existing method. However, according to the proposed costs calculation framework, the peak-shaving costs in 2020 should be 16.97 million Yuan. The power grid compensated 12.83 million Yuan to the power plant, and the real peaking net profits was -4.14 million Yuan, which means coal-fired power units are unprofitable under the current peaking compensation mechanism. Compared with the existing traditional costs calculation method, the proposed method could provide a more comprehensive and accurate costs accounting for the deep peak-shaving process of coal-fired units. This study may help formulate the benchmark and reasonable compensation in the peak-shaving ancillary service market.