Costs and benefits of energy transition - Revision history

Tony Yen at 02:52, 5 August 2020

2020-08-05T02:52:35Z

Tony Yen at 02:50, 5 August 2020

2020-08-05T02:50:46Z

Tony Yen at 02:46, 5 August 2020

2020-08-05T02:46:27Z

Tony Yen at 02:37, 5 August 2020

2020-08-05T02:37:49Z

Tony Yen at 15:54, 25 September 2019

2019-09-25T15:54:40Z

Tony Yen at 00:12, 20 September 2019

2019-09-20T00:12:47Z

Tony Yen at 00:10, 20 September 2019

2019-09-20T00:10:36Z

Tony Yen at 00:06, 20 September 2019

2019-09-20T00:06:36Z

Tony Yen at 00:04, 20 September 2019

2019-09-20T00:04:19Z

Tony Yen at 00:02, 20 September 2019

2019-09-20T00:02:50Z

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 The increase of integration costs during energy transition is nonetheless small compare to the overall benefits gained by generation costs. Even if we add all the additional integration costs to the generation costs of renewables, VRE are still cost competitive to other conventional alternatives in most modeled scenarioes<ref name="carbon brief">In-depth: The whole system costs of renewables, https://www.carbonbrief.org/in-depth-whole-system-costs-renewables</ref>.
-It is also important to keep in mind that such comparison is sometimes misleading because the integration costs do not only depend on the amount of VRE but also the [[Flexibility (Power System)|flexibility of the energy system]] the renewable sources are deployed. For example, a study conducted by&nbsp;<span style="font-size: 13.6px">Aurora Energy Research found out that the integration costs of a large amount of solar installation in UK can drop significantly when there are no nuclear on line, and can even go negative if battery storage becomes very cheap<ref>Intermittency and the cost of integrating solar in the GB power market, http://www.solar-trade.org.uk/wp-content/uploads/2016/10/Intermittency-and-the-cost-of-integrating-solar-Aurora-Energy-Research-September-2016.pdf</ref>.</span>
+It is also important to keep in mind that such comparison is sometimes misleading because the integration costs do not only depend on the amount of VRE but also the [[Flexibility (Power System)|flexibility of the energy system]] deployed. For example, a study conducted by&nbsp;<span style="font-size: 13.6px">Aurora Energy Research found out that the integration costs of a large amount of solar installation in UK can drop significantly when there are no nuclear on line, and can even go negative if battery storage becomes very cheap<ref>Intermittency and the cost of integrating solar in the GB power market, http://www.solar-trade.org.uk/wp-content/uploads/2016/10/Intermittency-and-the-cost-of-integrating-solar-Aurora-Energy-Research-September-2016.pdf</ref>.</span>
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 [[Category:Impacts_Economic]]

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 = Overall Concept =
-The study of whether energy transition towards 100% renewables is socially and economically feasible is yet under hot debates. Some famous debates recently in the scientific communities includes the attacks on Mark Z. Jacobson's 100% RE studies<ref name="MZJ 2015">Mark Z. Jacobson, Mark A. Delucchi, Mary A. Cameron, Bethany A. Frew, Low-cost solution to the grid reliability problem with100% penetration of intermittent wind, water, andsolar for all purposes, 2015</ref><ref name="CC 2017">Christopher T. M. Clack et. al, Evaluation of a proposal for reliable low-cost gridpower with 100% wind, water, and solar, 2017</ref><ref name="MZJ 2018">Mark Z.Jacobson, Mark A. Delucchi, Mary A. Cameron, Brian V. Mathiesen, Matching demand with supply at low cost in 139 countries among 20 world regions with 100% intermittent wind, water, and sunlight(WWS) for all purposes, 2018</ref> and also T.W. Brown's response to a critical review of 100&nbsp;% RE systems<ref name="Heard 2017">Burden of proof: A comprehensive review of the feasibility of 100% renewable-electricity systems</ref><ref name="Brown 2018">T.W. Brown, T. Bischof-Niemz, K. Blok, C. Breyer, H. Lund, B.V. Mathiesen, Response to ‘Burden of proof: A comprehensive review of the feasibility of100% renewable-electricity systems’, 2018</ref>.
+The study of whether energy transition towards 100% renewables is socially and economically feasible is yet under hot debates. Some famous debates recently in the scientific communities include the attacks on Mark Z. Jacobson's 100% RE studies<ref name="MZJ 2015">Mark Z. Jacobson, Mark A. Delucchi, Mary A. Cameron, Bethany A. Frew, Low-cost solution to the grid reliability problem with100% penetration of intermittent wind, water, andsolar for all purposes, 2015</ref><ref name="CC 2017">Christopher T. M. Clack et. al, Evaluation of a proposal for reliable low-cost gridpower with 100% wind, water, and solar, 2017</ref><ref name="MZJ 2018">Mark Z.Jacobson, Mark A. Delucchi, Mary A. Cameron, Brian V. Mathiesen, Matching demand with supply at low cost in 139 countries among 20 world regions with 100% intermittent wind, water, and sunlight(WWS) for all purposes, 2018</ref> and also T.W. Brown's response to a critical review of 100&nbsp;% RE systems<ref name="Heard 2017">Burden of proof: A comprehensive review of the feasibility of 100% renewable-electricity systems</ref><ref name="Brown 2018">T.W. Brown, T. Bischof-Niemz, K. Blok, C. Breyer, H. Lund, B.V. Mathiesen, Response to ‘Burden of proof: A comprehensive review of the feasibility of100% renewable-electricity systems’, 2018</ref>.
 In these debates, the question of how much an energy system with 100% renewables costs is often the main reason both parties disagree with each other. Therefore, it may be important to know how a solid, dynamic, and system oriented analysis on the costs and benefits of energy transition should look like.
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 In the reports of International Renewable Energy Agency, energy system related costs are considered to be "techno-economic", while the macroeconomic effects of energy transition are under the category "socio-economic impacts" <ref>Global Renewables Outlook: Energy transformation 2050, IRENA 2020. Link: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_Global_Renewables_Outlook_2020.pdf</ref>.
-Apart from calculating the total system cost from scatch, we can set the current total system cost as the baseline and assign the reduction of total system cost as the "energy value", "capacity value", or any other values on the power system VRE installation can provide. These values will correspond to different costs as explained in this page; for example, the energy value will correspond to the generation cost, while the capacity value will correspond to part of the profile cost, a type of the integration cost. For more on the energy value and capacity value of VRE, see [[:File:Market_Values_of_Variable_Renewable_Energy_(Energy_and_Capacity_Value).pdf|Market Values of Variable Renewable Energy (Energy and Capacity Value)]].
+Apart from calculating the total system cost from scatch, we can set the current total system cost as the baseline and assign the reduction of total system cost as the "energy value", "capacity value", or any other values on the power system VRE installation can provide. These values will correspond to different costs as explained in this page; for example, the energy value will correspond to the generation cost, while the capacity value will correspond to part of the profile cost, a type of the integration cost. For more on the energy value and capacity value of VRE, see [[:File:Market Values of Variable Renewable Energy (Energy and Capacity Value).pdf|Market Values of Variable Renewable Energy (Energy and Capacity Value)]].
 = References =
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 <references /><br/>
 [[Category:Energy_Transition]]

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 After the energy transition took place and some amount of renewable energy was introduced, the fossil fuel power generation cost dropped to 500 units per year, while the maintenance cost of additional renewable energy capacity, was 200 units per year in total (we assume here that there existed no other system-related costs for simplicity). This would result to a net decrease of 300 units per year in the total system cost, which would be the system effect of the transition.
-On the microeconomic level, the wholesale market share dropped to 1500 units per year after the transition, with the renewable energy operators taking 500 units per year and the fossil fuel power plant operators taking 1000 units per year. This meant that the producer surplus of fossil fuel power plant operators dropped 500 units per year. Meanwhile, renewable energy operators receive consumer-paid policy support of 200 units per year, which resulted in a total net profit of 500 units per year for renewable energy operators. For the customers, the prices they need to pay for the electricity dropped from 2000 units per year to 1700 units per year. These results from different viewpoints would be the distribution effect of the transition.
+On the microeconomic level, assume that the wholesale market share dropped to 1500 units per year after the transition, with the renewable energy operators taking 500 units per year and the fossil fuel power plant operators taking 1000 units per year. This meant that the producer surplus of fossil fuel power plant operators dropped 500 units per year. Meanwhile, renewable energy operators receive consumer-paid policy support of 200 units per year, which resulted in a total net profit of 500 units per year for renewable energy operators. For the customers, the prices they need to pay for the electricity dropped from 2000 units per year to 1700 units per year. These results from different viewpoints would be the distribution effect of the transition.
 Finally, if we investigate the impact of, say, the 500 units per year of net profit for the renewable energy operators on the growth of the sector, we will be conducting a study on the macroeconomic effects of the transition;&nbsp;in this case, the gross effect to be specific. A study on how a broader economic metric (ex. GDP) would be affected would be study on the net effect of the transition.
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 = Other Terminologies and Methodologies =
 In the reports of International Renewable Energy Agency, energy system related costs are considered to be "techno-economic", while the macroeconomic effects of energy transition are under the category "socio-economic impacts" <ref>Global Renewables Outlook: Energy transformation 2050, IRENA 2020. Link: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_Global_Renewables_Outlook_2020.pdf</ref>.
 = References =
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 <references /><br/>
 [[Category:Impacts_Economic]]

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 After the energy transition took place and some amount of renewable energy was introduced, the fossil fuel power generation cost dropped to 500 units per year, while the maintenance cost of additional renewable energy capacity, was 200 units per year in total (we assume here that there existed no other system-related costs for simplicity). This would result to a net decrease of 300 units per year in the total system cost, which would be the system effect of the transition.
-On the microeconomic level, the wholesale market share was dropped to 1500 units per year after the transition, with the renewable energy operators taking 500 units per year and the fossil fuel power plant operators taking 1000 units per year. This meant that the producer surplus of fossil fuel power plant operators dropped 500 units per year. Meanwhile, renewable energy operators receive consumer-paid policy support of 200 units per year, which resulted in a total net profit of 500 units per year for renewable energy operators. For the customers, the prices they need to pay for the electricity dropped from 2000 units per year to 1700 units per year. These results from different viewpoints would be the distribution effect of the transition.
+On the microeconomic level, the wholesale market share dropped to 1500 units per year after the transition, with the renewable energy operators taking 500 units per year and the fossil fuel power plant operators taking 1000 units per year. This meant that the producer surplus of fossil fuel power plant operators dropped 500 units per year. Meanwhile, renewable energy operators receive consumer-paid policy support of 200 units per year, which resulted in a total net profit of 500 units per year for renewable energy operators. For the customers, the prices they need to pay for the electricity dropped from 2000 units per year to 1700 units per year. These results from different viewpoints would be the distribution effect of the transition.
 Finally, if we investigate the impact of, say, the 500 units per year of net profit for the renewable energy operators on the growth of the sector, we will be conducting a study on the macroeconomic effects of the transition;&nbsp;in this case, the gross effect to be specific. A study on how a broader economic metric (ex. GDP) would be affected would be study on the net effect of the transition.
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 = References =
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 <references /><br/>
 [[Category:Energy_Transition]]

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 Finally, if we investigate the impact of, say, the 500 units per year of net profit for the renewable energy operators on the growth of the sector, we will be conducting a study on the macroeconomic effects of the transition;&nbsp;in this case, the gross effect to be specific. A study on how a broader economic metric (ex. GDP) would be affected would be study on the net effect of the transition.
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 [[Category:Impacts_Economic]]

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 Suppose before energy transition took place, the fossil fuel power generation costed 1000 units per year in a power system, with an wholesale market share of 2000 units per year.
-After the energy transition took place and some amount of renewable energy was introduced, the fossil fuel power generation cost dropped to 500 units per year, while the maintenance cost of additional renewable energy capacity, among additional network expansion cost, were 200 units per year in total. This would result to a net decrease of 300 units per year in the total system cost, which would be the system effect of the transition.
+After the energy transition took place and some amount of renewable energy was introduced, the fossil fuel power generation cost dropped to 500 units per year, while the maintenance cost of additional renewable energy capacity, was 200 units per year in total (we assume here that there existed no other system-related costs for simplicity). This would result to a net decrease of 300 units per year in the total system cost, which would be the system effect of the transition.
-On the microeconomic level, the wholesale market share was dropped to 1500 units after the transition, with the renewable energy operators taking 500 units and the fossil fuel power plant operators taking 1000 units. This meant that the producer surplus of fossil fuel power plant operators dropped 500 units
+On the microeconomic level, the wholesale market share was dropped to 1500 units per year after the transition, with the renewable energy operators taking 500 units per year and the fossil fuel power plant operators taking 1000 units per year. This meant that the producer surplus of fossil fuel power plant operators dropped 500 units per year. Meanwhile, renewable energy operators receive consumer-paid policy support of 200 units per year, which
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 [[Category:Energy_Transition]]