(398r) Valuing Flexibility in CCS-Equipped Power Plants

Today's trilemma between avoiding carbon dioxide emissions, managing cost, and maintaining security of electricity supply requires a delicate balance in power system planning and operation. Common metrics for technologies comparison, such as the levelised cost of electricity (LCOE), assess power generation options in isolation and cannot account for integration and grid-level effects. Similarly, such metrics are unable to value specic performance characteristics such as the ability to provide ancillary services, firm capacity, or flexibility.

In this work, we present a methodology to calculate the "System Value" (SV) of a given technology to the electricity system. The SV of a particular technology is dened as the marginal change in total electricity generation cost (capital, energy, ancillary services) arising from the addition of a capacity unit of that technology. The centrepiece of the SV approach is a mixed-integer linear program (MILP) which simultaneously optimises the electricity system design as well as the hourly unit-wise dispatch schedule. We extend a general unit commitment formulation [1, 2] by including environmental and security aspects in addition to constraints capturing the detailed unit operation [3].

We show that the value of a given technology is a function of the existing capacity mix, i.e., the composition of the incumbent energy system into which it is integrated, and that this value continues to evolve as a function of the changing energy landscape. We identify the value of CCS power plants as the potential to reduce total system cost by £500-800/kW of installed CCS-equipped capacity. CCS power plants with increased flexibility (e.g., w.r.t. start-up time, minimum
stable generation, ramp rate) show the ability to accommodate higher shares of intermittent renewable power generation. This provides additional value to the electricity system by reducing start-up costs and turn-down frequency.

[1] Morales-Espana, G., Gentile, C., Ramos, A. Tight MIP formulations of the power-based unit commitment problem. OR Spectrum, pages 1-22, 2015.
[2] Staffell, I., Green, R. Is there still merit in the merit order stack? The impact of dynamic constraints on optimal plant mix. IEEE Transactions on Power Systems, 31(1):43-53, 2015.
[3] C. F. Heuberger, I. Staffell, N. Shah, and N. Mac Dowell. Levelised Value of Electricity - A Systemic Approach to Technology Valuation. In 26^th European Symposium on Computer Aided Process Engineering, volume 38, pages 721-726, 2016.