Capturing low-carbon power system dynamics : Interactions between intermittent renewables and power plants with CO2 capture and storage

Low-carbon power systems are needed by the year 2050 to meet climate change mitigation targets. This dissertation investigates the operational and economic feasibility of such future low-carbon power systems by simulating the Dutch and European power systems. Particular attention is paid to the impacts of intermittent renewable energy sources (iRES) on the power system, the operational and economic performance of power plants with carbon capture and storage (CCS) and the flexibility of the power system. It is found that iRES affect the operation of power systems, but that their impacts are manageable. Overall, sufficient operational flexibility is available in future low-carbon power systems to accommodate variable electricity production of iRES and to supply the extra balancing reserves that are needed to compensate for the forecast error of iRES. Power systems will experience reduced capacity factors of dispatchable generators such as power plants. The efficiency of power plants is hardly reduced by iRES (simulations show efficiency reductions up to 0.3% in scenarios with up to 59% iRES penetration). Also, low-carbon power systems can be realized with various generation portfolios. A large share of power can be generated by either natural gas-fired combined cycle (NGCC) power plants with CCS, nuclear power, or renewable sources, in particular wind and solar power. A higher share of renewables may be better aligned with long-term climate targets up to 2100, but will be 12% more expensive in the year 2050 than deploying more natural-gas fired power plants. This price increase is caused by the higher investment costs of iRES, and “integration costs” associated with integrating the intermittent electricity production in the system. The integration costs are largely caused by underutilization of dispatchable capacity, whose capacity factors are reduced. Balancing costs are also a minor component of the integration costs. Lastly, the roles of three generation portfolio components need to be pointed out: (1) Deployment of gas turbines is important to ensure system adequacy in systems with high shares of iRES; (2) Demand response is a promising flexibility option, but needs further research; (3) Deployment of wholesale electricity storage is not economic, and not essential for system reliability. In addition, necessary investments in power plants will not be made with the current energy-only market design because their business cases are unsound. New investments in power plants will be necessary to replace aging power plants and ensure system adequacy. The current energy-only market design does not provide sufficient revenues to warrant new investments, especially when peak prices are prevented by system reliability targets. The same pattern is observed at a power system level: total European power system costs are 38% - 85% higher than the revenues, so increased revenues are needed to maintain a reliable power system in the future. In addition, the large uncertainty in power plant business cases discourages investments. Future CO2 prices are very uncertain, which makes any business case unattractive.