Investment In Electricity Generation Research Articles

Integrated analysis of end-use electrification and cross-border electricity trade policies for hydropower enabled energy transformation in Nepal

Whether an enormous untapped hydropower resource should be utilized domestically by heavily electrifying energy end-uses or should be exported to neighboring countries is often debated in Nepal. This study attempts to bring both policy options together and justifies with evidence the need to integrate end-use electrification and cross-border electricity trade policies in the energy transformation of Nepal. We found out that Nepal will continue to import electricity till 2027 to meet its electricity demand throughout the year though it has already started exporting its surplus electricity during the wet season because of the full availability of run-of-river type hydropower. The run-of-river will continue to dominate Nepal's least-cost generation mix with a two-thirds share resulting in considerable surplus electricity during the high-flow season. Such surplus will exceed one-third of its total energy generation capacity in long-run in all end-use electrification scenarios (low to high). Nepal can use its existing cross-border electricity trade mechanism to sell its surplus electricity and can generate revenue of 67 billion USD in the high electrification scenario, which, combined with savings from fossil fuel import savings, can provide 85 % of total electricity generation investment needs.

Determinants of Project Finance success for renewable energy

World electricity consumption has grown permanently since 1990, dramatically increasing the emission of greenhouse gases. The worldwide efforts to reduce them and address climate change are leading to the massive electrification of different end-users, increasing the power demand. Therefore, achieving Sustainable Development Goals regarding affordable and clean energy requires the extensive availability of capital investments in electricity generation from renewable sources. Project Finance (PF) is a suitable financing alternative for large projects. This paper presents the advantages of PF contracts in allocating risks to appropriate counterparts and reducing the likelihood of default. Additionally, this study analyzes the characteristics that favor PF financing for renewable energy projects. The results reveal that country's governance levels, well-developed financial systems, and project costs affect the financing probability of a PF initiative, particularly for low and middle-income countries. Therefore, public policies aimed at increasing the availability of resources to renewable projects must tackle these factors.

Does economic growth promote electric power consumption? Implications for electricity conservation, expansive, and security policies

The purpose of this study is to determine the relationship between electric power consumption per capita (kWh) and real GDP per capita (PEN, constant 2007 prices), in Peru, during the period 1971–2014. The four theoretical hypotheses behind this relationship are the growth hypothesis –electricity consumption explains economic growth–, the conservation hypothesis –economic growth explains electricity consumption–, the feedback hypothesis –mutually affecting explanation between electricity consumption and economic growth–, and neutrality hypothesis –electricity consumption does not explain economic growth and vice versa–. Empirically, we initially conclude that the conservation hypothesis can be confirmed using the Granger Causality test, after estimating the dynamic impacts of the long-run equilibrium and short-run models. We highlight the inelastic behavior of electric power consumption per capita with regard to real GDP per capita. These results have implications for electricity conservation, expansive and security policies. We also discussed investments in electricity generation, transmission and distribution from renewable energy sources such as hydro, wind and solar. These eco-sustainable energies also called green and clean energies, are necessary for the sustainability of the electric power demand and the level of national electrification.

Independent power producers and deregulation in an island based small electricity system: The case of Papua New Guinea

The small island economy of Papua New Guinea (PNG) is facing severe electricity shortages and is therefore turning to implementing broader power sector reforms as a vehicle to attract private capital and investments in electricity generation. This study, based on a case-study approach, revisits the reform progress and plans in the electricity sector of PNG alongside the development and integration of IPPs in its small power system. Lessons of reform experiences and IPPs integration are drawn from three other smaller systems of Nepal, Nicaragua and the Northern Territory of Australia including stakeholder consultations, which includes two IPPs of PNG. We find a widening gap between reform ‘theory’ and ‘practice’ in the PNG power sector. Cost reflective pricing is implemented while cost recovery is never achieved by the vertically integrated state-owned utility and the insolvency of this state-owned single buyer poses the greatest perceived revenue risk to the IPPs. This lack of revenue reimbursement to the IPPs by the single buyer is a barrier towards attracting private capital into electricity generation. We recommend that strong political will and strengthening of institutional arrangements are urgent reform measures to attract private capital in power generation as political instability continue.

Prediction of electrical energy consumption in Cameroon through econometric models

Electricity consumption is on the rise in developing countries. Most energy demand forecasting research studies aim to provide sufficient electricity forecast for accurate planning of investments in electricity generation and distribution. The main objective of this study is to develop efficient and realistic solutions for forecasting electricity consumption in Cameroon. This article proposes a hybrid model based on vector error correction models (VECM) and Holt-Winters exponential smoothening (HES), combines from an improved algorithm of the gradient descend in order to minimize the forecast error. The prediction results of this hybrid approach are compared to similar studies in the literature, to artificial intelligence models as well as to predictions from official published scientific work. Also, it is applied to forecast the future net electricity consumption of Cameroon until 2024. The results of the study indicate that the proposed model can generate more realistic and reliable forecasts. It can also be argued that it responds better to some unexpected reactions from the time series.

The Importance of Modeling Carbon Dioxide Transportation and Geologic Storage in Energy System Planning Tools

Energy system planning tools suggest that the cost and feasibility of climate-stabilizing energy transitions are sensitive to the cost of CO2 capture and storage processes (CCS), but the representation of CO2 transportation and geologic storage in these tools is often simple or non-existent. We develop the capability of producing dynamic-reservoir-simulation-based geologic CO2 storage supply curves with the Sequestration of CO2 Tool (SCO2T) and use it with the ReEDS electric sector planning model to investigate the effects of CO2 transportation and geologic storage representation on energy system planning tool results. We use a locational case study of the Electric Reliability Council of Texas (ERCOT) region. Our results suggest that the cost of geologic CO2 storage may be as low as $3/tCO2 and that site-level assumptions may affect this cost by several dollars per tonne. At the grid level, the cost of geologic CO2 storage has generally smaller effects compared to other assumptions (e.g., natural gas price), but small variations in this cost can change results (e.g., capacity deployment decisions) when policy renders CCS marginally competitive. The cost of CO2 transportation generally affects the location of geologic CO2 storage investment more than the quantity of CO2 captured or the location of electricity generation investment. We conclude with a few recommendations for future energy system researchers when modeling CCS. For example, assuming a cost for geologic CO2 storage (e.g., $5/tCO2) may be less consequential compared to assuming free storage by excluding it from the model.

Varying Coefficient Models and Design Choice for Bayes Linear Emulation of Complex Computer Models with Limited Model Evaluations

Computer models are widely used to help make decisions about real-world systems. As computer models of large and complex systems can have long run-times and high-dimensional input spaces, it is often necessary to use emulation to assess uncertainties in computer model output. This paper presents methodology for emulation of complex computer models motivated by a real-world example in energy policy. The computer model studied is an economic model of investment in electricity generation in Great Britain. The computer model was used to select parameters in a government policy designed to incentivize investment in renewable technologies to meet government targets. Limited computing time meant that few runs of the computer model were available to fit an emulator. The statistical methodology developed was therefore focused on accurately capturing the uncertainty in computer model output arising from the small number of available model runs. A varying coefficient emulator is proposed to model uncertainty in model output when extrapolating away from model runs. To maximize use of the small number of runs available, this varying coefficient emulator is paired with a criterion-based procedure for design selection.

The key role of historic path-dependency and competitor imitation on the electricity sector low-carbon transition

Market players in the energy sector transition are heterogeneous, have bounded rationality and are influenced by their own past failures, as well as imitating the successes of their competitors. However this agent heterogeneity and complex behaviour in investment choices is not taken into account in traditional energy-economy models used to inform energy sector policies. By using BRAIN-Energy, an agent-based model of investment in electricity generation, which enables to study the impact of actors’ heterogeneous characteristics on the transition pathways of the UK, German and Italian electricity sectors, this paper shows how historic path-dependency in investment choices displaces low-carbon in favour of high-carbon investments under a weak regulatory framework. By contrast, imitation can help the diffusion of renewable technologies, through a self-reinforcing positive feedback when government subsidies to low-carbon investments are in place.

De-risking Renewable Energy Investments in Developing Countries: A Multilateral Guarantee Mechanism

Summary Mitigation of global warming requires substantial investment in electricity generation from renewable sources. A large share of new generation capacity is required in regions with adverse financing conditions. We propose a global guarantee mechanism to reduce risk premia of renewable energy investments by means of risk pooling and increased market efficiency. Policymakers could establish this mechanism by scaling up existing international risk guarantee initiatives. We estimate the net present value of overall savings at US$2018 1.5 trillion globally for investments by 2030, with the largest relative savings (between 20.5% and 22%) in Sub-Saharan Africa and the Maghreb. The savings from such a mechanism outweigh its estimated average yearly operating cost. By lowering the cost of decarbonization in high-risk countries, the proposed mechanism offers policymakers a tool to make current global mitigation pledges more achievable and enables the global community to pursue more ambitious climate action.

A Framework for applying Renewable Energy in Floating Hotels: A case of Egypt

There is now a common trend worldwide that reducing gases that have a great impact on the surrounding environment is extremely important, and to overcome this and reduce negative impacts, hotels must reduce dependence on fossil fuels in electricity generation, and replace that with investment in electricity generation from renewable energy sources. This research aims to set a suggested framework for applying renewable energy in the Egyptian floating hotels. The current research used personal interviews with the managers of floating hotels, managers and experts of the renewable energy companies, and based on the distribution of survey forms to the engineers and technicians of the maintenance and engineering department. The interviews were conducted with Forty-Two managers of floating hotels. The valid questionnaires for analysis were 253. The total number of interviews with the managers and experts of renewable energy companies was twelve. Research findings highlighted that it is possible to use solar panels on the floating hotel to provide electrical energy to the rooms of the hotel sample of the research.

Risk Analysis in Renewable Energy System (RES) Investment for a Developing Country: A Case Study in Pakistan

Technological improvements allow changing a significant part of the electricity generation investments to renewable energies. Especially in emerging markets and energy import-dependent countries, shift to renewable energy generation became more important to break the links of dependency. Pakistan relies on imported fossil fuels; however, the country’s experience and ambition about the renewable energy transition gain prominence in recent years. Considering the long-term life cycle of energy infrastructure investments, possible risk factors and their dynamic nature must be analysed before the financial decisions are taken. This article aims to propose a system dynamics model for the risk analysis of investment life cycle. In this study, possible risk factors are detected and discussed in different categories. The casual loop diagram of possible risk factors and risk assessment model are designed, and the impacts are analysed. Case study of the proposed model in Pakistan highlighted the importance of commercial risks. The results achieved through this study will guide investors, sector participants and policymakers to develop stable strategies for promoting renewable energy in the country. JEL: Q42, P48, O13

The co-evolution of climate policy and investments in electricity markets: Simulating agent dynamics in UK, German and Italian electricity sectors

Achieving electricity sector transitions consistent with stringent climate change mitigation under the Paris Agreement requires a careful understanding both of the coordinating role of national governments and of its interactions with the heterogeneous market players who will make the low-carbon investments in the electricity sector. However, traditional energy models and scenarios generally assume exogenous policy targets and fail to capture this co-evolution between policy-makers and heterogeneous private and public investors. This paper uses BRAIN-Energy, a novel agent-based model of investment in electricity generation to simulate and contrast government and investor dynamics in the transition pathways of the UK, German and Italian electricity sectors. Key findings show that a successful transition – which achieves the energy policy “trilemma” (low carbon, secure, affordable) – requires the co-evolution of the policy dimension (strong and frequently updatable CO2 price, renewable subsidies and capacity market) with the strategies of the heterogeneous market players. If this dynamic balance is maintained then incentives are politically feasible and suppliers learn and evolve (in what we term a virtuous cycle). If either the incentives are too weak to drive learning or too expensive so the policy regime collapses, then the transition fails on one of its key dimensions (in what we term a vicious cycle). Getting this balance right is harder in risky markets that also have players with more pronounced bounded rationality and path dependence in how they make investments.

Overcapacity in European power systems: Analysis and robust optimization approach

The planning of national power systems is traditionally based on long-term forecasts of electricity demand and fuel prices. However, over such long time horizons (20–50 years), these forecasts often prove to be inaccurate. As an example, wrong projections of low natural gas prices and high electricity demand in Europe in the early 2000s stimulated massive investments in electricity generation, which led to the current situation of overcapacity in the European electricity market. In this work, we first present the issue of overcapacity in Europe and discuss its causes; in particular, we highlight the relationship between overcapacity and errors in forecasts of electricity demand and fuel prices. Then, we apply a novel robust optimization framework to a real-world strategic energy planning problem, and compare it to the standard, deterministic decision-making approach. The results show that the robust investment strategies are up to 58% less likely to require future modifications leading to overcapacity. Overall, this suggests that considering uncertainties in the long-term planning process can reduce the risk of generating overcapacity in national power systems.

How do energy policies accelerate sustainable transitions? Unpacking the policy transfer process in the case of GETFiT Uganda

Energy policies play an important role in accelerating ‘sustainable transitions’ by enabling and incentivizing investment in electricity generation from renewable sources. Key policies such as feed-in tariffs, tradable permits and auctions were pioneered in OECD nations, notably within the European Union, and in recent years have been the subject of donor-funded projects to transfer such policies to lower-income countries. However, within the wider transition studies literature, there is a lack of detailed understanding regarding the process of how this policy transfer takes place in the renewable energy sector. Our research addresses this gap by analyzing the micro-politics and actor-strategies by which the GETFiT program was implemented in Uganda. In particular, we focus on the interplay of transnational and national actors in pursuit of specific policy objectives. Informed by case study method and qualitative research, we employ theoretical perspectives, archival data sources and semi-structured interviews to adapt the policy transfer framework to the agency perspective of policy translation. We find that transnational influences, resource flows, local embeddedness, and institutional resilience are all necessary prerequisites for a coherent policy outcome. Moreover, this study opens up an avenue of research into co-creation processes and relational perspectives in sustainasbility transitions.

Pluralizing and problematizing carbon finance

Growing emphasis on finance as key to decarbonization requires social science research that critically attends to the emergent and diverse forms taken by carbon finance. First, we pluralize research into carbon finance, building on existing work to identify four main forms: carbon markets; ecosystem services; natural capital investment; and, capital allocated to low-carbon enterprises and projects. Second, we propose that research should problematize the processes through which carbon is variously translated into financial value. Illustrated with reference to low-carbon investment in electricity generation, our agenda thereby extends from the difficulties of producing carbon-as-commodity to the uncertainties of constituting carbon-as-asset.

Development of a New Support Mechanism to Calculate Feed-in Tariffs for Electricity Generation from Renewable Energy Sources in Turkey

Turkish government agencies support capital investments in electricity generation from renewable energy sources. When making support decisions related with renewable electrical energy sources, the government agencies should consider various issues such as renewability, cleanliness, origin of the source, supply security, cost per kilowatt hour (kWh), and total electricity generation capacity. The tariff mechanism being used in Turkey provides constant rates per kWh of electricity generated from renewable energy sources. The levels of the rates are determined to stimulate renewable energy sources’ usage. In this paper, instead of a constant rate, a feed-in tariff is calculated for each individual electricity generation project using renewable energy source and its level is increased according to the source’s desirability with respect to other renewable energy sources. Various criteria are taken into account in determination of electrical energy sources’ desirability. Furthermore, a combination of two multi-criteria decision-making (MCDM) approaches (the fuzzy versions of the analytic hierarchy process (AHP) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS)) is used in obtaining a ranking among alternative renewable electrical energy sources. The developed support model’s applicability is illustrated in this paper. The new model developed in this paper has many key benefits. For example, for an individual renewable electrical energy project, final cost per kWh can be calculated and multiplied by new Support Constant to calculate feed-in tariff purchase price per kWh. In another key benefit of the developed model, only local instead of state-wide renewable electrical energy projects can be compared within the AHP-TOPSIS decision hierarchy.

Investment Incentives in Competitive Electricity Markets

This paper presents the analysis of a novel framework of study and the impact of different market design criterion for the generation expansion planning (GEP) in competitive electricity market incentives, under variable uncertainties in a single year horizon. As investment incentives conventionally consist of firm contracts and capacity payments, in this study, the electricity generation investment problem is considered from a strategic generation company (GENCO) ′ s perspective, modelled as a bi-level optimization method. The first-level includes decision steps related to investment incentives to maximize the total profit in the planning horizon. The second-level includes optimization steps focusing on maximizing social welfare when the electricity market is regulated for the current horizon. In addition, variable uncertainties, on offering and investment, are modelled using set of different scenarios. The bi-level optimization problem is then converted to a single-level problem and then represented as a mixed integer linear program (MILP) after linearization. The efficiency of the proposed framework is assessed on the MAZANDARAN regional electric company (MREC) transmission network, integral to IRAN interconnected power system for both elastic and inelastic demands. Simulations show the significance of optimizing the firm contract and the capacity payment that encourages the generation investment for peak technology and improves long-term stability of electricity markets.

Risk shaping of optimal electricity portfolios in the stochastic LCOE theory

In this paper we review and extend the stochastic LCOE portfolio theory, a mean-risk analysis of electricity generation investment portfolios, focusing on the distinction between risk and deviation risk measures in terms of risk distribution shaping. Using standard and more advanced stochastic optimization risk measures, we derive optimal portfolios in the case of fossil fuels only, and in the case which includes the nuclear asset, interpreted as a risk free asset useful to hedge and reduce LCOE dispersion around its mean, in a US market case study. Four CO2 price volatility scenarios are used to illustrate how the theory handles the impact of indirect correlation among different fuel technologies induced by CO2 costs on the determination of optimal portfolios.

Will Batteries /Capacitors or Any Innovative Storage Technology Define the Future of Renewable Energy?

Renewable energy, especially solar and wind power, are quickly becoming the dominant central focus of new electricity generation investment. A prediction states that $10.2 trillion will be spent on new power generation worldwide through year 2040, 72 percent mostly invested in new wind and solar plants. The challenge is that the growing dependence on wind and solar energy can cause electrical grids to become unstable due to change in weather which affect wind speed and permanent sunny exposure. As these intermittent sources of power grow in importance a back-up network of fossil-fuel generators primarily designed to meet demand peaks will be the traditional way to maintain their stability. Ultimately, the more efficient solution lies in energy storage, particularly in advanced batteries/ capacitors or innovative storage technology that can help in avoiding fluctuation of power output. However, as energy markets accelerate along the transition from conventional to sustainable energy generation, there will be a growing problem that the industry must address to scientific researches in this field. Capacitors store energy using electrodes and electrolytes that both charge and deliver energy quickly. On the other hand, normal batteries conduct the same in a slower sustained performance. However, due to the fact that capacitors have poor energy density shorten its energy storage competition in the market and redirect Scientists and researchers to endeavor in attaining the highest possible energy density or find another innovative economical mode of storing energy. The paper will present evolution of those type of newest improved technology in both batteries /capacitors and other advance technologies and investigate which could possibly lead the market to define the future of renewable efficient and stable energy.

An Overview for Wind Energy Technology for Electricity Generation

Could Wind Energy Power stations Technology Transition Define the Future of Renewable Energy? Renewable energy, especially solar and wind power, are quickly becoming the dominant central focus of new electricity generation investment. A prediction states that $10.2 trillion will be spent on new power generation worldwide through year 2040, 72 percent mostly invested in new wind and solar plants. The challenge is that the growing reliance on wind and solar energy can cause electrical grids to become unstable due to change in weather which affect wind speed and permanent sunny exposure. As these intermittent sources of power grow in importance a back-up network of fossil-fuel generators primarily designed to meet demand peaks will be the traditional way to maintain their stability. However, as energy markets accelerate along the transition from conventional to sustainable energy generation, there will be a growing problem that the industry must address to scientific researches in this field concerning control and structural efficiency including market completion and availability. The paper will present the transition to wind energy including the science and technology of this renewable energy. A case study will be presented about its efficient use in Lebanon and impact cost concerning material use and logistics to be applied. The paper also will address to the control techniques implemented on the wind mill that ensure operation at maximum yield point and this will be tabulated in a case study of how control operation will affect the output power efficiency. Furthermore, structural force analysis on turbine will be presented including simulation analysis. Finally we will conclude about if Wind energy will possibly leads the market to define the future of renewable efficient and stable energy.