[ad_1]
New Delhi |
December 14, 2020 8:34:22 pm
Written by Gireesh Shrimali and Abhinav Jindal
Worldwide, coal plants are grappling with environmental points and low capability utilisation ranges. They haven’t solely develop into unprofitable to utilities, they’re additionally uneconomical to clients.
While retiring end-of-life coal plants can total be beneficial, and certainly needed as finance continues to exit the fossil gas sector pushed by the worldwide power transition, the execution might encounter resistance for a number of causes akin to prices concerned, identification of plants, influence on the present workforce and therefore communities, and different system flexibility concerns.
We recommend retirements can be higher rationalised with a transparent empirical estimation of prices and advantages incurred in decommissioning plants vis-à-vis repurposing them.
For energy utilities, repurposing coal plants provides many benefits. First, repurposing reduces decommissioning prices as a result of it avoids a number of the environmental remediation necessities and permits partial re-use of present belongings such because the degraded land in addition to the turbines, substations and grid connections. Second, it reduces the price of commissioning greenfield renewable capability at the identical website. Third, for coal plants situated in city and semi-urban areas, repurposing manifests in a number of finish makes use of, resulting in financial diversification and industrial rejuvenation, benefiting native economies and the workforce. Fourth, it may present a profitable exit technique for stranded and burdened coal plants. And fifth, repurposing coal plant tools (for instance the turbo-generator) permits for retaining part of the reactive energy service for voltage management initially supplied by the coal plant — a useful service when quickly including renewable power.
Developed international locations with vital coal capacities akin to Australia, Canada, Germany, the United Kingdom and the United States are taking totally different approaches to weaning away from coal. One such strategy contains retiring (that’s, decommissioning) and repurposing coal plants for numerous productive finish makes use of, together with solar plants (for instance in Nanticoke, Canada), wind farms (for instance in Brayton level, US), information centres (for occasion in Widows creek, US), and power storage (for instance in Liddell, Australia).
Developing international locations akin to South Africa, Chile and India might acquire a lot from the expertise of their developed counterparts. Coal has performed a significant function in assembly the power wants of those international locations so far. However, every of those nations is now witnessing quickly falling tariffs for renewable power resulting in accelerated penetration of renewable energy-based era into their grids, whereas the power price of coal-based era has remained excessive compared, making its’ dispatch economically much less possible. As these international locations sit up for altering their carbon footprints, repurposing significantly addresses the potential resistance to the decommissioning of coal plants, and the advantages of early coal plant retirement may create a supply of funds for new renewable power initiatives.
In order to function a blueprint, we examined the worth proposition of repurposing utilizing a consultant 1 gigawatt (GW) Indian coal plant as a case examine. Compared to comparable evaluation in developed international locations, we imagine our evaluation can be helpful to different growing international locations with vital coal capacities. For instance, compared to the US, decommissioning price estimates for Indian plants are relatively low. While the imply decommissioning prices within the US are $117 million/GW, in India they’re almost half that at round $58 million/GW
We calculated the current worth of underlying prices, advantages, and web advantages (advantages minus prices) of repurposing coal plants for acceptable mixtures of three probably well-liked repurposing choices — solar energy, solar and battery storage, and solar and battery storage with a synchronous condenser. While the power and flexibility worth of solar power and battery storage is well-known, synchronous condensers — primarily repurposed turbo-generators from coal plants — can play a key function in offering a lot wanted reactive energy even put up coal plant retirement.
We additionally thought of each the plant-specific (or direct) in addition to system/society particular (or oblique) facets of each prices and advantages. Representative examples of direct prices embrace jobs and environmental remediation; oblique prices embrace system balancing; direct advantages embrace salvage worth and land utilisation; and oblique advantages embrace peaking energy and carbon.
Our findings are as follows. First, the online advantages of repurposing coal plants are constructive. The direct, oblique and whole advantages of repurposing outweighed the corresponding prices of decommissioning. For occasion, whereas the direct, oblique and whole decommissioning prices had been $58.1 million, $45.8million and $103.9 million respectively; the corresponding repurposing advantages had been as much as $122.Eight million, $468.zero million and $590.Eight million. Among direct advantages, scrap worth was the foremost contributor, and by itself coated the entire direct decommissioning prices, whereas, amongst oblique advantages, carbon advantages had been the foremost contributor.
Second, the online advantages of repurposing coated a major fraction of the capital expenditure in pursuing repurposing choices, thus probably enhancing the economics of those initiatives. For instance, even after excluding oblique social advantages, the online advantages of repurposing coated 10.three per cent of solar capital expenditure; 16.four per cent of solar and battery storage capital expenditure; and 32.1 per cent of solar, battery storage and synchronous condenser capital expenditure.
Third, repurposing for solar and battery storage will supply larger web advantages as a share of mixed capital expenditure into the longer term, given the continued speedy fall in battery costs. For occasion, the online advantages of repurposing by way of solar and battery storage might improve from 16.four per cent of corresponding capital expenditure at current to 26.Eight per cent by 2029-30. Furthermore, as ancillary markets develop world wide, repurposing by way of a synchronous condenser would offer a significant income stream.
Our outcomes spotlight the potential financial advantages of approaching end-of-life coal plant repurposing for utilities, the ability system and society at large, together with enabling the much-needed power transition from coal to renewable power in growing international locations.
(Shrimali is a Precourt Scholar at the Sustainable Finance Initiative at Stanford University and Jindal is a PhD Scholar in Economics at Indian Institute of Management, Indore and is working as Senior Manager (Commercial), NTPC Ltd)
[ad_2]
Source hyperlink