Calculating dynamic pricing for energy (cost/kwh) for virtual power plant is my main focus now. The scenario is a system where the electricity market is liberalized and renewable energies (WT, Photovoltaic) are supplying a flexible load with a Gas Turbine (primary reserve).
Costs are sum of fixed, variable and operation cost. Finally the MCP is calculated according to how much energy the IPP will be generating the next half an hour. Thereby, I am calculating the Real Time Pricing every 30 minutes. But I have the following questions:
1. Solar doesn't produce power during nights, does the Solar IPP's make a loss during these periods? Or the calculation is already made excluding the non-solar hours for the project duration?
2. How does the producer make a profit/loss after unclear/bad forecasting (may be produces more than expected or ends up produces very less)?
3. What costs of Gas Turbine includes when it is not producing any energy but acting as a primary reserve (reserve costs)?
A healthy discussion is always appreciated and suggestions are welcome. Thank you.
Solar generator does not produce at night but it does not consume any energy. So if you neglect its depreciation, then at night it makes zero profit.
Since demand and supply should be balanced in any point in time, normally PV devices are embedded in network and production should be balanced with other sources (like hydro and thermal).
In liberalized energy markets there is hourly price that is calculated to balance demand and supply. Then the revenue of PV system should be the sum of its output in certain hour multiplied by the price during this hour. However, most of PV owners enjoy feed-in tariff (fixed price to sell to network) and this is a kind of subsidy. Without it PV system working in market conditions would be even less profitable.
you can sense the direction of current and disconnect to prevent loading if there is any
The IPP may decide to sell part or all of its output though a long term power take off agreement (Power Purchase Agreement - PPA) to a user of electricity (or supplier of electricity), this should have the effect of shifting the risk away from the IPP in terms of when it produces - but means that they will have to accept a lower price for their product (the electricity). The PPA will have clauses to mean that the IPP is not expected to produce electricity at nighttime - or if it did - they should find a better legal team for their following projects. The IPP may opt to sell everything through a near-term market - but they may find if they want to borrow money to develop the project - a condition may be that the lender requires a certain percentage to be 'secured' under longer-term agreements so that the lender is happy to lend.
The IPP may decide to sell part or all. Power Purchase Agreement, purchase guarantee or longer-term agreements is important. But this is not preferred in some countries due to attractive price of network. Gas Turbine system (simple and combined,..) is preferred due to time, investment cost, easy operation ... Solar generator does not produce at night but similarly some GT systems is working 16 hours due to high costs or low price.
Thank you for your responses. In the model I am currently developing I have included a grid with a dynamic household powered by two wind turbines, PV and GT. I would like to get an opinion from my fellow researchers. How does it sense that the investment costs of all these are technologies are included in every hourly pricing (even if a technology is not participating in the market. i.e. Is not producing energy)? In other ways the variable costs are included only if the IPP is offering power (as per PPA's). Say for eg. PV has a Investment cost of X Eur for the proj lifetime. and Variable costs are Y per Kwh.
During market participating the PV-IPP gets his part of X/Kwh + Y/Kwh
During out of market it is rateher just X/Kwh (Irrespective whether he is producing or just decided not to sell as the amount of generation is low)
My Question is does it work this way? (in case we have fellow researchers working in the industry, please share your views)
Investment costs F should be included. It is net present value of the project, where N periods are discounted by (1+r)^t. Sometimes if interest is very low but the lifetime of device is finite (let say N=20 years) one can split fixed cost into N periods and contrast it with the stream of payoffs. Then profit in one year will be Pi= P-VC-F/N, where P - revenue, VC - variable cost.
An example. Let F=10000 euro, N=20 years, VC=100 (for PV it may be negligible, but one can add salary for operating with it), and P=1000 euro (per year). Then Pi=1000-100-500=600 euro per year. For PV this revenue is calculated on daily basis, depending how sunny was weather and what is the price of electricity.
Note that average radiation depend on location. Here is an example of daily calculation that also includes radiation map: http://understandsolar.com/calculating-kilowatt-hours-solar-panels-produce/
Thank you Yuri Yegorov. So refering to your answer you mean to say that as variable costs are depending upon the production. If on a day the PV-IPP produces more power, then it makes him to draw more profit from the market!? I kinda had the same opinion and thank you for the link you have attached.
I think so. I monitor the data at pecan street USA and I found that at many time instant there was a negative value of the PV generation but very small.
- Badges
- Science topic
- Similar topics
- Geoscience
- Asia
- India