| Abstract |
Various scenarios for the UK’s power fleet composition in 2030 and 2040 were developed. Dispatch modelling in Plexos was carried out by Baringa on these fleets to investigate the role gas-fed plants might have in future. This includes the ability to study load factors, stop/starts etc., and together with concomitant pricing, provide a picture of investment remuneration. The effect of key drivers is studied e.g. gas price
This slide set summarises the results for scenarios 1 and 2, along with the assumptions underlying the modelling, and these will be used to inform the final S3 market runs which will then be the basis of the subsequent asset valuation analysis
Key conclusions are- Plant operation
- H2 turbine is highly sensitive to gas and carbon prices (more so to gas price)
- CCGT CCS generation is far less sensitive and provides baseload power most of the time across the scenarios tested
- Note the £35.1/tCO2 and 7.7 £/GJ case has an output subsidy on CCS hence load factor is slightly higher
- Power prices
- ESME fleet capacity margin is tight
- CM clearing price cap hit and significant scarcity/uplift in wholesale prices
- Subsidies for low carbon generation not having material impact on power prices (limited impact on CCGT CCS LF)
- Choice of final wholesale market scenario and ESME fleet is important as this will form the basis for asset valuation
- Suggest usingBaringa commodity prices in ESME (based on recent IEA WEO publication) as more recent than ESME
- Continue to use ESME output carbon price, but noting that real 2030 policy incentive could be significantly lower
- Initial CM analysis based on ESME fleet suggests capacity is ‘too tight’ pushing up CM clearing and wholesale prices, need to revisit peak margin constraint in ESME to ensure more capacity is built –two parts to this:
- De-rating factors in ESME more optimistic compared to GB CM factors (except for interconnectors), but haven’t been updated for a while, question about whether to use BEIS CM numbers
- Reserve margin constraint currently 15% above peak demand, but this needs to covers a range of factors which may not all be included or have different underlying assumptions
- Current constraint only against end-use demand -needs to include distribution/transmission losses ~6.5%-
- Account for mark-up between ESME timeslice blocks to ½ hour peak (~7% delta in current scenarios)
- Actual reserve margin target (3.4% current CM target, although this may change in future)
- Largest infeed loss (currently ~900MW but expected to increase to e.g. 1600 with new nuclear)
- Timescales
- Need to have fully finalised scenario 3 wholesale market run (potentially different spot years of same mix) by early in w/c 20th to ensure sufficient time for asset analysis, but ideally bring this forward
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