Page 80 - Impiantistica Industriale - Settembre Ottobre 2014
P. 80
le the cost of discharged fluid emission Capture Storage) the fossil plants operating in
mitigation to meet regulatory requirements is cycling mode. The main reasons are:
usually counted in the kWh cost, the additional the main post combustion processes are suitable
costs associated with the subsequent damages to be used in plants operating at base load and
made by the emissions or with any additional usually cannot operate at loads under about 60%;
impact on the country outside the plants (named oxyfuel process could work on cycling mode, but
external costs) are today supported by others. the cost of kWh will become not competitive and
up to now there are not commercial oxyfuel plants
3.0 Role of fossil and in operation.
nuclear plants in respect to CCS could be applied for EON (Enhanced Oil
renewables and Gas Recovery) and in the world areas where
the impact of renewables is negligible mainly for
All analysts agree that the correct policy is to protect climate reasons.
at its best the environment maintaining competitive
the kWh cost and price. Usually local authorities 5.0 How can electric utilities
request to minimize the environmental impact, but obtain clear regulations and a
this policy increases the cost of kWh. constant government policy?
With reference to the impact of the renewables
on generation mix, it is important to underline Could the set up of adequate capacity payment,
that fossil plants operating in cycling mode has guaranteed by Authorities, solve the problem of the
an higher environmental impact in respect to the integration of renewables into the generation mix,
plants operating at high load for long time. On this including fossil plants?
regard the main questions now are: Electric utilities and IPP investment decisions are
• what could be the best integration criteria of obviously influenced by potential instability and
lack of adequate government regulations. When
renewables within the generation mix? firms perceive that the regulatory initiatives are
• what could be the future role of fossil and unstable, their specific investments appear more
risky. Utilities will be not interested to invest in fossil
nuclear plants in respect to renewables in this plants when they perceive that the future operation
context? of these assets will be not protected by adequate
regulations including the capacity payments.
The role of fossil and nuclear plants within this In Europe up to now each country is studying or
introducing different capacity mechanisms. In US
context will depend on how much electricity will the State policymakers designed RPS (Renewable
Portfolio Standard) to encourage investment in
be supplied by renewable sources renewable electricity generation, assets that have
obviously much less success in the absence of this
All analysts agree within a grid. It is evident that if RPS. And similar actions were made in many EU
that the correct policy the renewables sources power countries.
capacity will be near or equivalent
is to protect at its or higher of the maximum load 6.0 Financial challenge for
best the environment required by the grid, the production fossil fuel power plants
maintaining competitive of fossil and nuclear plants will be
the kWh cost and price. minimized. The Transaction Cost Economics (TCE) theory
Usually local authorities Competitive and not regulated could help the new investors within power
markets will necessarily lead generation sector to face this financial challenge.
request to minimize the to underinvestment in fossil A transaction cost is the cost incurred in making an
environmental impact, generating capacity and/or to economic exchange (that is the cost of participating
but this policy increases an inefficient mix of generating in a market). Transaction costs can be divided into
the cost of kWh. capacity and to additional costs the following three broad categories:
for energy storage and grid • search and information costs relating to the
improvements. choice of the good;
• bargaining costs, that are the costs required
Within this context it could becoming important to
to come to an acceptable agreement with the
introduce the capacity payment that is a mechanism other parties involved in the transaction;
• policing and enforcement cost, that are the
to reimburse fossil and (nuclear) generators for their costs of making sure the other parties agree
on the terms of the contract.
capital and operation costs so to push these to TCE is exploring also how a regulatory instability
accept a cycling operation of their plants and to
work as back up of renewables.
4.0 Role of carbon capture
and storage (if any)
The impact of renewables into the generation mix
reduce the opportunities to equip with CCS (Carbon
Impiantistica Italiana - Settembre - Ottobre 2014 79
mitigation to meet regulatory requirements is cycling mode. The main reasons are:
usually counted in the kWh cost, the additional the main post combustion processes are suitable
costs associated with the subsequent damages to be used in plants operating at base load and
made by the emissions or with any additional usually cannot operate at loads under about 60%;
impact on the country outside the plants (named oxyfuel process could work on cycling mode, but
external costs) are today supported by others. the cost of kWh will become not competitive and
up to now there are not commercial oxyfuel plants
3.0 Role of fossil and in operation.
nuclear plants in respect to CCS could be applied for EON (Enhanced Oil
renewables and Gas Recovery) and in the world areas where
the impact of renewables is negligible mainly for
All analysts agree that the correct policy is to protect climate reasons.
at its best the environment maintaining competitive
the kWh cost and price. Usually local authorities 5.0 How can electric utilities
request to minimize the environmental impact, but obtain clear regulations and a
this policy increases the cost of kWh. constant government policy?
With reference to the impact of the renewables
on generation mix, it is important to underline Could the set up of adequate capacity payment,
that fossil plants operating in cycling mode has guaranteed by Authorities, solve the problem of the
an higher environmental impact in respect to the integration of renewables into the generation mix,
plants operating at high load for long time. On this including fossil plants?
regard the main questions now are: Electric utilities and IPP investment decisions are
• what could be the best integration criteria of obviously influenced by potential instability and
lack of adequate government regulations. When
renewables within the generation mix? firms perceive that the regulatory initiatives are
• what could be the future role of fossil and unstable, their specific investments appear more
risky. Utilities will be not interested to invest in fossil
nuclear plants in respect to renewables in this plants when they perceive that the future operation
context? of these assets will be not protected by adequate
regulations including the capacity payments.
The role of fossil and nuclear plants within this In Europe up to now each country is studying or
introducing different capacity mechanisms. In US
context will depend on how much electricity will the State policymakers designed RPS (Renewable
Portfolio Standard) to encourage investment in
be supplied by renewable sources renewable electricity generation, assets that have
obviously much less success in the absence of this
All analysts agree within a grid. It is evident that if RPS. And similar actions were made in many EU
that the correct policy the renewables sources power countries.
capacity will be near or equivalent
is to protect at its or higher of the maximum load 6.0 Financial challenge for
best the environment required by the grid, the production fossil fuel power plants
maintaining competitive of fossil and nuclear plants will be
the kWh cost and price. minimized. The Transaction Cost Economics (TCE) theory
Usually local authorities Competitive and not regulated could help the new investors within power
markets will necessarily lead generation sector to face this financial challenge.
request to minimize the to underinvestment in fossil A transaction cost is the cost incurred in making an
environmental impact, generating capacity and/or to economic exchange (that is the cost of participating
but this policy increases an inefficient mix of generating in a market). Transaction costs can be divided into
the cost of kWh. capacity and to additional costs the following three broad categories:
for energy storage and grid • search and information costs relating to the
improvements. choice of the good;
• bargaining costs, that are the costs required
Within this context it could becoming important to
to come to an acceptable agreement with the
introduce the capacity payment that is a mechanism other parties involved in the transaction;
• policing and enforcement cost, that are the
to reimburse fossil and (nuclear) generators for their costs of making sure the other parties agree
on the terms of the contract.
capital and operation costs so to push these to TCE is exploring also how a regulatory instability
accept a cycling operation of their plants and to
work as back up of renewables.
4.0 Role of carbon capture
and storage (if any)
The impact of renewables into the generation mix
reduce the opportunities to equip with CCS (Carbon
Impiantistica Italiana - Settembre - Ottobre 2014 79
