Comments on: Water ups and downs for steady power flows http://www.energypolicyblog.com/2009/10/30/water-ups-and-downs-for-steady-power-flows/ Sustainable energy policy, more competition, better regulation, improved policies. Fri, 03 Feb 2012 13:54:12 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David Lemasson http://www.energypolicyblog.com/2009/10/30/water-ups-and-downs-for-steady-power-flows/comment-page-1/#comment-67481 David Lemasson Thu, 15 Apr 2010 19:53:19 +0000 http://www.energypolicyblog.com/?p=874#comment-67481 The article emphasizes an important point: a reason of the low competitiveness of renewable energies lies in the fact that electricity cannot be stored. Renewable energies production is quite out of control and is therefore disconnected to the demand. “Electricity storage” seems all the more necessary since renewable energies will imply other production facilities to compensate their period of non-production. Moreover, the only plants able to start up and shut down very quickly use fossil fuels, such as gas. If a country wants to meet the 3x20 target by 2020 as set by the European Union, it seems difficult to meet at the same time a great part of renewable energies and the reduction of greenhouse gases, unless electricity can be “stored”. However, perspectives of pump storage in France seem not very broad. The return on investments for this kind of installations is supposed to be obtained after about 40 years and therefore, we should take a look of the economic and technological transformations to come. Besides the drawback of the scarcity of sites, the issue of the development of electric cars may threaten the return on those installations. Knowing that the present energy consumption for road transport in France is about 480 TWh (http://www.developpement-durable.gouv.fr/IMG/spipwwwmedad/pdf/Etudes_documentsN3_cle519651.pdf) and assuming that the efficiency of a thermal motor is about 30% and that the electric car fleet will represent half the present car fleet and a 100% efficiency of electrical motors, 80 TWh of electricity will be needed to load those cars. This represents a power of 9 GW along the whole year, whereas the amplitude of demand reaches 20 GW nowadays (http://clients.rte-france.com/htm/fr/vie/telecharge/prev_conso_elec.pdf). As cars will mainly be reloaded at night, when the cars are not used, the off-peak periods will be limited. Furthermore, cars batteries will certainly also be used to store and deliver electricity to the grid. The profitability of electricity storage using water pools may therefore be limited. The article emphasizes an important point: a reason of the low competitiveness of renewable energies lies in the fact that electricity cannot be stored. Renewable energies production is quite out of control and is therefore disconnected to the demand. “Electricity storage” seems all the more necessary since renewable energies will imply other production facilities to compensate their period of non-production. Moreover, the only plants able to start up and shut down very quickly use fossil fuels, such as gas. If a country wants to meet the 3×20 target by 2020 as set by the European Union, it seems difficult to meet at the same time a great part of renewable energies and the reduction of greenhouse gases, unless electricity can be “stored”.
However, perspectives of pump storage in France seem not very broad. The return on investments for this kind of installations is supposed to be obtained after about 40 years and therefore, we should take a look of the economic and technological transformations to come. Besides the drawback of the scarcity of sites, the issue of the development of electric cars may threaten the return on those installations. Knowing that the present energy consumption for road transport in France is about 480 TWh (http://www.developpement-durable.gouv.fr/IMG/spipwwwmedad/pdf/Etudes_documentsN3_cle519651.pdf) and assuming that the efficiency of a thermal motor is about 30% and that the electric car fleet will represent half the present car fleet and a 100% efficiency of electrical motors, 80 TWh of electricity will be needed to load those cars. This represents a power of 9 GW along the whole year, whereas the amplitude of demand reaches 20 GW nowadays (http://clients.rte-france.com/htm/fr/vie/telecharge/prev_conso_elec.pdf). As cars will mainly be reloaded at night, when the cars are not used, the off-peak periods will be limited. Furthermore, cars batteries will certainly also be used to store and deliver electricity to the grid. The profitability of electricity storage using water pools may therefore be limited.

]]> By: Juan Lopez-Terradas Mota http://www.energypolicyblog.com/2009/10/30/water-ups-and-downs-for-steady-power-flows/comment-page-1/#comment-67306 Juan Lopez-Terradas Mota Tue, 13 Apr 2010 18:25:48 +0000 http://www.energypolicyblog.com/?p=874#comment-67306 Let’s call it “Trading” A great word for describing pump-storage is “Trading”. Economists use this word for describing the activity where a trader buys a product in a market and then he sells it in another market with different (lower) price. The price difference makes the activity profitable. Pump-storage enables traders (electricity suppliers…) to sell on-peak electricity bought in off-peak periods. From an economic point of view, trading increase market liquidity in the two markets and so the capacity available in peak periods. More capacity available in peak periods means that the electric system, as a whole, is safer and the blackout probability will be lower. Trading is said to be an auto destructive activity. When a trader buys a product in the first market, because of the demand-supply law, he will make prices increase. Likewise, when he will try to sell the product he bought, by the same principle, he will make prices decrease on the second market. The activity will be profitable while there is a price difference. The more the trader trade, the less price gap will exist. On a long-term perspective, the difference of these two prices is the cost of moving the product from the first market to the second. This means that if we install enough pump-storage facilities, the price difference between on-peak electricity and off-peak electricity will be the pump-storage cost (capital costs plus operation costs). But the pump-storage global capacity is limited by geographic reasons so the trading equilibrium is probably never achieved. In the article, the author also evocated another trading scheme: the trading between two moments on the intraday market. This market (also called balancing market/mechanism) is used by the System Operator as a tool to equilibrate the supply of electricity with the demand on real time. The pump-storage facilities will be flexible enough to sell ( produce) electricity when the system is on shortage and to buy (consume) when its on excess. Let’s call it “Trading”

A great word for describing pump-storage is “Trading”. Economists use this word for describing the activity where a trader buys a product in a market and then he sells it in another market with different (lower) price. The price difference makes the activity profitable. Pump-storage enables traders (electricity suppliers…) to sell on-peak electricity bought in off-peak periods. From an economic point of view, trading increase market liquidity in the two markets and so the capacity available in peak periods. More capacity available in peak periods means that the electric system, as a whole, is safer and the blackout probability will be lower.

Trading is said to be an auto destructive activity. When a trader buys a product in the first market, because of the demand-supply law, he will make prices increase. Likewise, when he will try to sell the product he bought, by the same principle, he will make prices decrease on the second market. The activity will be profitable while there is a price difference. The more the trader trade, the less price gap will exist. On a long-term perspective, the difference of these two prices is the cost of moving the product from the first market to the second. This means that if we install enough pump-storage facilities, the price difference between on-peak electricity and off-peak electricity will be the pump-storage cost (capital costs plus operation costs). But the pump-storage global capacity is limited by geographic reasons so the trading equilibrium is probably never achieved.

In the article, the author also evocated another trading scheme: the trading between two moments on the intraday market. This market (also called balancing market/mechanism) is used by the System Operator as a tool to equilibrate the supply of electricity with the demand on real time. The pump-storage facilities will be flexible enough to sell ( produce) electricity when the system is on shortage and to buy (consume) when its on excess.

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