Achieve Grid Parity Research Articles

Subsidizing the Shift to Renewable Energy in Korea: A Levelized Cost Analysis and Computation of Required Subsidies

This study addresses the pivotal challenge of transitioning from nuclear to renewable energy sources, considering the distinctive energy landscape of South Korea characterized by high land costs and high dependence on nuclear energy. Amidst global momentum toward sustainable and carbon-neutral energy, South Korea’s Renewable Energy 3020 Implementation Plan aims to achieve 20% of power generation from renewables by 2030. Shifting away from nuclear energy, however, may lead to rising energy costs, supply disruptions, and environmental ramifications. Furthermore, achieving grid parity between renewable energy and nuclear power by the late 2030s is unlikely, in contrast to earlier projections. This is primarily due to the comparatively lower production cost of nuclear energy. To expedite the shift toward renewable energy, our study suggests transitioning from the Renewable Energy Portfolio Standard (RPS) to a Feed-in-Tariff (FiT) system. This change would offer voluntary incentives for investment in renewable energy. Additionally, we compute Feed-in-Tariff subsidies required to achieve grid parity by 2030, concluding that the amount of subsidies required to reach grid parity by 2030 is 54% of retail electricity price. This research offers valuable insights for policy formulation and energy transition planning.

Adaptive Decentralized Payback Normalization for Socio-Economic Rebalancing of RE subsidies - A Case Study

Clean energy subsidies are designed to stimulate consumer participation and deliver greater benefits to society. India has a fixed centralised federal subsidy model for residential rooftop solar (RTS). Different states have different tariff schemes for electricity consumption and RTS feed-in. Thus, grid parity, payback period (PBP), and willingness to pay (WTP) differ for consumers of different states and income classes, resulting in social and geographical disparity in RTS implementation. A Socio-Economic Rebalancing of RE subsidies thus becomes necessary. This paper proposes a novel adaptive decentralised heterogeneous PBP equalisation-based subsidy policy to enhance the WTP for all prosumers and ensure uniformity of RTS implementation. A two-stage subsidy optimisation is conducted using a case study in diverse states to achieve Grid Parity initially and subsequently desired PBP for all states and income classes. The proposed subsidy ensures grid parity for all, sufficient to transit all the prosumers to 100% net electricity from RTS. The subsidy is further normalised by equalising the PBP to a target PBP thereby ensuring uniformity of RTS implementation in the country bridging the rural-urban WTP disparity, leading to a better social scenario. The strategy is adaptive to the future, as the subsidy can be revised with changes in techno-economic parameters.

Helical Fins for Concentrated Solar Receivers: Design Optimization and Entropy Analysis

Abstract Concentrated solar power (CSP) with thermal energy storage (TES) has the potential to achieve grid parity. This can be realized by operating CSP systems at temperatures above 700 °C with high-efficiency sCO2 power cycles. However, operating CSP systems at such temperatures poses several challenges, among which the design of solar receivers to accommodate increased thermal loads is critical. To this end, this work explores and optimizes various swirl-inducing internal fin designs for solar receiver tubes. These fin designs not only improve the thermal performance of receiver tubes but also levelize temperature unevenness caused by non-uniform thermal loading. In this work, the geometric parameters of the fin designs are optimized to maximize the Nusselt number with a constraint on the friction factor. This optimization, however, is computationally intensive, requiring hundreds of simulation calls to computational fluid dynamics (CFD) models. To circumvent this problem, surrogate models are used to approximate the simulation outputs needed during the optimization. In addition, this study also examines the fin designs from an entropy generation perspective. To this end, the entropy contributions from thermal and viscous effects are quantitatively compared while varying the operational Reynolds number.

Market profitability of CSP-biomass hybrid power plants: Towards a firm supply of renewable energy

CSP-biomass hybrid power plants are promising options for displacing electricity from flexible fossil systems and increasing the share of dispatchable renewable energy in power grids. However, they are investment-intensive technologies whose competitiveness in electricity markets is still uncertain. This paper explores for the first time the profitability of CSP-biomass hybrid systems, assuming their participation as price-taking technologies in the Iberian day-ahead electricity market. For this purpose, a new economic evaluation metric called the Profitability Factor is proposed to extend the scope of the levelized cost of electricity (LCOE) by including the variability of market electricity prices. Besides, a stochastic approach integrating uncertainty related to investment costs, electricity prices and biomass costs through Monte-Carlo sampling methods has been applied. Results show that CSP-biomass schemes have up to 33% probability of being profitable in the electricity market before considering external financial support. High biomass share (approx. 76%) leads to a profitability increase of up to 0.11 USD/kWh (median value) compared to an equivalent CSP stand-alone plant. In addition, best-performing hybrid configurations would require a maximum add-in tariff between 0.040 and 0.071 USD/kWh (95% probability) to achieve grid parity. The resulting external financial support is significantly lower than those set through Power Purchase Agreements for the first generation CSP stand-alone plants (still in operation). Thus, CSP-biomass hybrid plants could provide flexibility and other services to power grids, which, if valued in the electricity market, would further increase the technology's competitiveness.

Grid Parity of Residential Building Rooftop Solar PV in India

Rooftop solar photovoltaic(PV) installation in India have increased in lastdecade because of the flat 40 percent subsidy extended for rooftop solarPV systems (3 kWp and below) by the Indian government under the solarrooftop scheme. From the residential building owner’s perspective, solar PVis competitive when it can produce electricity at a cost less than or equalgrid electricity price, a condition referred as “grid parity”. For assessing gridparity of 3 kWp and 2 kWp residential solar PV system, 15 states capitaland 19 major cities were considered for the RET screen simulation by usingsolar isolation, utility grid tariff, system cost and other economic parameters.3 kWp and 2 kWp rooftop solar PV with and without subsidy scenarioswere considered for simulation using RETscreen software. We estimate thatwithout subsidy no state could achieve grid parity for 2kWp rooftop solarPV plant. However with 3 kWp rooftop solar PV plant only 5 states couldachieve grid parity without subsidy and with government subsidy number ofstates increased to 7, yet wide spread parity for residential rooftop solar PV isstill not achieved. We find that high installation costs, subsidized utility grid supply to low energy consumer and financing rates are major barriers to gridparity

Is local grid parity affordable in China? Discussion on the regional wind power potential and investment returns under policy uncertainty

In China, achieving grid parity is critical for a low-cost carbon-neutral transition over the next decades. However, it may post investment dilemma in renewable energy, given the significant differences in resource endowment across various regions. In this paper, we quantify the regional wind resource endowment and evaluate the impact of different grid parity scenarios on regional wind power investments, including long-term contracts with fixed prices, free contracts with decreasing prices and the marketisation of the electricity market. The results show that while the wind power investment returns decrease in all regions with the feed-in tariff degression, the regions in west China with less developed economies are more affected. Additionally, the regional wind power investment return significantly and positively correlates with the regional wind power potential, but the degree of correlation decreases with the increase of electricity price uncertainty. Regions with abundant wind power resources, such as Inner Mongolia, Xinjiang and Gansu, cannot guarantee a sufficient return on investment when the uncertainty of electricity prices increases. It is suggested that alternative support schemes (e.g., long-term contract) and safeguard policies should be designed to reduce the uncertainty of electricity prices and offset the investment incentives created by subsidies (especially in western regions).

Study on Feasibility of Photovoltaic Power to Grid Parity in China Based on LCOE

Today, photovoltaic (PV) power generation accounts for a relatively small proportion of total power generation in China. If photovoltaic power can achieve grid parity, it can replace the original traditional thermal power generation, which has positive significance on the environment. The Levelized Cost of Energy (LCOE) is the main general economic indicator for the evaluation of power generation technology in the world. Based on the traditional LCOE evaluation model and considering the shortcomings of the previous LCOE evaluation models, the cost of photovoltaic power generation is refined in this paper. The cost of the taxation with calculating the depreciation, the loss, and the income of the Clean Development Mechanism (CDM) are taken into consideration. Hence, a more accurate and more comprehensive LCOE model is presented. Moreover, combined with other investment indicators, a photovoltaic power generation benefit model corresponding to the current development status is proposed. Taking a 3-MW distributed photovoltaic power station project in Nanjing as a case study, the sensitivity analysis of factors that affect the benefit of photovoltaic power generation is carried out to further explore the feasibility of photovoltaic power to grid parity.

Treatment of Light-Induced Degradation for Solar Cells in a p-PERC Solar Module via Induction Heating

In the photovoltaic industry, there is great interest in increasing the power output of solar cells to achieve grid parity and to promote the widespread use of solar cells. However, despite many developments, a phenomenon called light-induced degradation causes the efficiency of solar cells to deteriorate over time. This study proposes a treatment that can be applied to cells within solar modules. It uses a half-bridge resonance circuit to induce a magnetic field and selectively heat Al electrodes in the solar cells. The electrical state of a solar module was measured in real time as it was being heated, and the results were combined with a kinetics simulation using a cyclic reaction. As the temperature of the solar module increased, the time taken to reach the saturation point and the recovery time decreased. Moreover, the value of the saturation point increased. The light-induced degradation activation energy was similar to results in the existing literature, suggesting that the kinetic model was valid and applicable even when 72 cells were connected in series. This demonstrates that an entire solar module can be treated when the cells are connected in series, and in future multiple modules, could be connected in series during treatment.

Achieving grid parity of offshore wind power in China–A comparative analysis among different provinces

Achieving grid parity of offshore wind power in China has great implication for the future energy system transition and plays an important role in achieving its carbon-peaking and carbon–neutral targets. However, the pace to reach grid parity among different regions as well as the policy needed to achieve it may be different in view of the disparity in the resource endowment and economic and market conditions. In this work, we collect the data of 83 offshore wind power projects connected to the grid in the period of 2013–2020 in China, and we estimate the learning rates of offshore wind power technology using learning curve model. Then, the future LCOEs of offshore wind power are projected among different provinces. Further, by comparing the future LCOEs and the on-grid price of coal-fired power, whether and when, and under what conditions the grid parity can be achieved are assessed at the province level, and especially the carbon finance policy needed to achieve the grid parity is explored. Finally, the policy strategy aimed to achieve grid parity among different regions is proposed.

The LCOE Evolution and Grid Parity Analysis of Centralized Solar Photovoltaic: A Case Study of Ningxia, China

Achieving grid parity in 2021 is the goal of China’s photovoltaic development, which is not only on the user side but also on the generation side. Relevant studies indicated that distributed PV has realized grid parity basically in China, while centralized PV, which belongs to the generation side, still has some difficulties in achieving grid parity. Therefore, this paper takes Ningxia Province, which is abundant in solar resources, as the research object and compares LCOE with the traditional coal-fired price to analyze the situation of grid parity of the Pingluo project. It is found that this project cannot reach the goal of grid parity. Then, the future evolution of the local LCOE is analyzed, so as to determine the time of grid parity of Ningxia’s centralized PV power stations. In the calculation of LCOE, the presence and absence of environmental benefits and the general and optimistic forecast of cumulative installed capacity are combined into four scenarios. The results show that the centralized PV in Ningxia cannot achieve grid parity in 2021 under the four scenarios. However, in addition to the scenario that there are no environmental benefits and the cumulative installed capacity is generally forecasted and will reach grid parity of the generation side in 2023, the other three situations can achieve the goal in 2022. Moreover, the LCOE value is the lowest under the scenario of considering environmental benefits and the optimistic forecast of future installed capacity.

Can China’s offshore wind power achieve grid parity in time?

ABSTRACT Facing an increasing financial burden and declining costs, China plans to phase out supporting policies for renewable energy before 2030. In this context, whether offshore wind power can achieve grid parity by the time the subsidies are eliminated is a great concern for policy makers as well as potential investors. To address this issue, we employ the learning curve framework to analyze the critical conditions under which the key factors of offshore wind power technology should evolve to achieve grid parity in time. Ceteris paribus, to achieve grid parity in 2030, the learning rate needs to be as high as 12.0%, the annual deployment needs to be 5.9 GW, and the capacity factor needs to be improved to 40.7%. The feasibility of achieving these key conditions is discussed, and we conclude that the enhancement of innovative technologies is crucial for offshore wind power to improve its cost competitiveness in a finite time without policy support.

The influence of COVID-19 on grid parity of China's photovoltaic industry.

With the more efficient involvement of both technology and policy factors in China’s whole industry-chain, the year 2020 is a key period for photovoltaic (PV) industry to achieve grid parity. In this context, COVID-19 may trigger a certain time-delay in new installed PV projects, thereby bringing an uncertain influence on the whole PV industry. To forecast the influence degree and influence cycle of COVID-19 on PV industry, this paper firstly clarifies the key features of epidemic situation as well as the basic rule of such pandemics’ transmission along industry-chain. Then this paper constructs a system dynamics model targeting at cost accounting of PV power generation under the influence of COVID-19 and thus forecasts the variation rules, superposition effects and influence cycle of levelized cost of energy (LCOE) of PV power generation and the operations cost of each sub-system. Empirical results show that PV industry has a lag response to the COVID-19 for 1 quarter and periodic response for 4 quarters, which is mainly embodied in the rise of short-term production cost. At the same time, the influence of COVID-19 on the upstream firms of PV industry is stronger than that on downstream firms. With the gradual recovery of whole industry-chain, LCOE of PV power generation will rapidly return to the previous expected level of grid parity by the end of 2020.

Which policy can promote renewable energy to achieve grid parity? Feed-in tariff vs. renewable portfolio standards

Abstract China’s electricity market reform poses an urgent demand for grid parity of renewable energy (RE), however, the high initial investment cost makes it difficult to achieve. Although feed-in tariff (FIT) and renewable portfolio standards (RPS) schemes are both practical policy tools to support the development of the RE industry, which policy is more consistent with the goal of grid parity? Accordingly, based on the system dynamic model, this research studies the levelized cost of RE (LCOE) under FIT and RPS, respectively. The results show that: First, under the current FIT scheme, wind (onshore) and photovoltaic (PV) power both cannot achieve grid parity. To realize it, extra payouts in four categories of areas should at least be 0.236, 0.244, 0.299 and 0.261 CNY/kWh. Similarly, additional subsidies for PV in Tibet and the northwest region except Tibet need to be 0.924 and 0.764 CNY/kWh. Second, under the RPS, wind (onshore) power can basically achieve grid parity, but PV cannot. Subsidies for PV need at least to be 0.525 and 0.364 CNY/kWh to achieve grid parity. Therefore, compared with the current FIT in China, the policy combination of FIT and RPS adjusted to local conditions is more conducive to realizing grid parity.

Achieving grid parity of solar PV power in China- The role of Tradable Green Certificate

Achieving grid parity of solar photovoltaic (PV) power in China has great implication for the future energy system transformation. In this work whether and when, and under what conditions the grid parity can be achieved are assessed, and especially the role of Tradable Green Certificate (TGC) policy in achieving the grid parity is explored. We first estimate the future levelized cost of electricity (LCOE) of solar PV power using learning curve method, and then by comparing it with on-grid price of coal-fired power, the grid parity of solar PV power is determined. Specifically, using a panel dataset consisting of information of 541 solar PV power projects over the period of 2010–2016, the learning rate of PV power is estimated, based on which the future LCOEs are estimated. The results show that the LCOE of PV power decreases from 0.4631 CNY/kWh in 2018 to 0.3345 CNY/kWh in 2030 under the baseline scenario of the cumulative installed capacity, and the grid-parity of solar PV power may be achieved between 2023 and 2025. With the TGC policy being implemented, the grid parity can be achieved earlier. Specifically, with the TGCs price reaching 100 CNY, the grid parity can be achieved in 2020.

Grid parity analysis of distributed photovoltaic power generation in China

Abstract In the context of the tight deadline to achieve grid parity in China before 2020, this paper analyzes the demand-side (residential, and industrial and commercial) and supply-side grid parity of distributed photovoltaic (DPV) power generation in province-level in detail. The levelized cost of electricity (LCOE) of four resource areas in 2018, 2020 and 2025 is calculated (2020 and 2025, respectively-area I: 0.4197, >0.3628, unit: CNY/kWh). Through comparing the LCOE with retail electricity prices and desulfurization thermal power benchmark prices, we find that in 2018 only six provinces (autonomous regions and municipalities) in China have failed to meet their 2020 target ahead of schedule. Jiangxi and Shanghai are struggling to achieve residential grid parity, based on projections for 2020. According to projections for 2025, DPV would be able to compete strongly with thermal power generation in all but seven provinces (autonomous regions and municipalities). A sensitivity analysis of the parameters affecting LCOE is also performed. Finally, we propose a path towards achieving grid parity and make recommendations for the government and the PV industry.

Research on Grid Parity Predictions of Centralized Photovoltaic Electricity

ABSTRACT Over the past decade, the photovoltaic (PV) industry in China has made great progress. However, this progress benefited from a series of subsidy policies, and with the continuous enlargement of the scale of centralized PV (CPV), the large subsidies have created great pressure on government finance, so achieving grid parity in CPV electricity is an urgent matter. This paper studies the grid parity of CPV electricity. First, this paper calculates the levelized cost of energy (LCOE) of CPV electricity. Second, using historical data and a dual learning curve, the paper predicts the LCOE of CPV electricity under scenarios with different resource zones and utilization times. Third, the paper predicts the LCOE of coal-fired electricity and draws conclusions based on changes in the price of coal and charcoal. Finally, the paper predicts when grid parity in CPV electricity in different resources areas will be achieved.

Policy analysis for grid parity of wind power generation in China

The “13th Five-Year Plan” for wind power has proposed that it will reach grid parity and compete with power and hydropower. Accordingly, many doubts have been raised. Is the wind power in China already equipped with conditions for grid parity? What is the impact on the development of wind power? To solve these doubts, this study employs a system dynamics model to judge whether China can achieve grid parity for wind power. First, the factor indicator system is constructed from the aspects of wind power production, consumption, and curtailment. Second, the trend of wind power curtailment, cost, revenue, and installed capacity are predicted from 2005 to 2030. Third, three scenarios are set to simulate the impact of grid parity on wind power. Empirical results show that: (1) Net revenue and installed capacity will continue to increase, while the wind power curtailment will gradually reduce. (2) When the subsidy is decreased to 0, revenue will significantly reduce, and the installed capacity will reduce by nearly 1/4. (3) The Chinese government should not abolish all subsidies for wind power to achieve grid parity in 2020. To prompt the process for the grid parity of wind power, some policy implications are proposed.

Grid Parity and Defection Studies in Major Philippine Cities Using Solar Photovoltaic-Plus-Storage Configuration

Due to the rapidly declining costs of solar photovoltaic (solar PV) modules and batteries, the possibility of defecting from the grid is starting to become an alternative for some consumers. Should many consumers defect from the grid, given the current rate structures, electricity prices would increase even faster which will further encourage more people to defect from the grid. This positive feedback loop has been called the “utility death spiral”. Previous grid defection studies were conducted in the United States, Australia, as well as some countries in Europe. In this work, the technical feasibility and economic viability of grid parity and defection were determined for residential customers in the major cities of the Philippines (Manila, Cebu and Davao) based on the franchise areas of Manila Electric Company, Visayan Electric Company, and Davao Light and Power Company. The grid defection analysis was divided into customer clustering, levelized cost of electricity (LCOE) calculation, and finally grid parity comparison. Three main clusters were identified based on the k-means clustering by utilizing 18 different features in order to get a more detailed overview on how many customers of each type are more likely to defect based on the representative load profiles from MERALCO. Average silhouette widths of 0.657, 0.587 and 0.585 were obtained for the three clusters. Based on the clusters, the LCOE of optimally sized solar PV-battery systems were calculated using Hybrid Optimization Model for Multiple Energy Resources Software, from 2018 up to 2050. The LCOE data were then compared to the projected retail electricity prices based on the actual data from the mentioned distribution utilities to find the economic viability of grid defection per customer cluster. Results show that grid parity and defection would be possible for residential customers starting in the next 30 y, with customers from Cebu more likely to defect first followed by Manila and then Davao. Based on the clustering, it was observed that the grid parity occurred earliest in Cluster C, followed by Cluster B, and then Cluster A. Different scenarios were also explored depending on the rate of decrease of local prices of photovoltaics, lithium-ion batteries, and a combination of both. Results show that decreasing battery prices play a bigger role achieving grid parity in the country.

City-level analysis of subsidy-free solar photovoltaic electricity price, profits and grid parity in China

In recent years, China has become not just a large producer but a major market for solar photovoltaics (PV), increasing interest in solar electricity prices in China. The cost of solar PV electricity generation is affected by many local factors, making it a challenge to understand whether China has reached the threshold at which a grid-connected solar PV system supplies electricity to the end user at the same price as grid-supplied power or the price of desulfurized coal electricity, or even lower. Here, we analyse the net costs and net profits associated with building and operating a distributed solar PV project over its lifetime, taking into consideration total project investments, electricity outputs and trading prices in 344 prefecture-level Chinese cities. We reveal that all of these cities can achieve—without subsidies—solar PV electricity prices lower than grid-supplied prices, and around 22% of the cities’ solar generation electricity prices can compete with desulfurized coal benchmark electricity prices. Although solar photovoltaic use grows rapidly in China, comparison with grid prices is difficult as photovoltaic electricity prices depend on local factors. Using prefecture-level data, Yan et al. find that 100% of user-side systems can achieve grid parity, while 22% can produce electricity cheaper than coal-based power plants.

Achieving grid parity of wind power in China – Present levelized cost of electricity and future evolution

China has adopted an ambitious plan for wind power to achieve grid parity with the on-grid price of coal-fired power in 2020. Whether this target can be achieved is a great concern for policy makers as well as potential investors. To address this issue, we first estimate the future levelized cost of electricity (LCOE) of wind power using a learning curve method, and then determine whether grid parity can be achieved by comparing it with the on-grid price of coal-fired power. Specially, the effect of carbon pricing on the grid-parity is explored, and a sensitivity analysis on how the discount rates, learning rates, and curtailment rates affect grid parity is conducted. The learning rate of onshore wind power is estimated using a panel dataset consisting of information of 2059 onshore wind projects in China from 2006 to 2015. Based on this learning rate, the future LCOE of Chinese onshore wind power from 2016 to 2025 is calculated. The results show that the LCOE of onshore wind power decreases by 13.91% from 0.40 RMB/kWh in 2016 to 0.34 RMB/kWh in 2025. By comparing the LCOE with the on-grid price of coal-fired power, the grid parity of onshore wind power may be achieved in 2019. With the implementation of the carbon pricing policy, the grid parity will be achieved earlier. More specifically, with the carbon price reaching 10, 35, and 60 RMB/t CO2, the grid parity can be achieved in 2019, 2017, and 2016, respectively. The results of the sensitivity analysis show that in the case of high discount rates, low learning rates, high curtailment rates, high O&M cost and low capacity factor, the grid parity will be delayed, and a high carbon price will be required to achieve the grid parity.