Levelized avoided cost of electricity model based on power system operation

This paper presents a methodology to estimate the Levelized Avoided Cost of Electricity (LACE) of new generation projects based on the assessment of economic and operational benefits perceived by an existing power system. The marginal economic benefit caused by the integration of a new generation pr...

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Bibliographic Details
Published in:Dyna (Medellín, Colombia) Colombia), 2018-07, Vol.85 (206), p.79-84
Main Authors: Cristian Camilo Marin-Cano, Mejía-Giraldo, Diego Adolfo
Format: Article
Language:English
Subjects:
avoided costs of electricity
constrained optimal power flow
costo evitado de electricidad
costo nivelado de electricidad
Cybersecurity
Decision making
Economics
Electricity
Electricity pricing
ENGINEERING, MULTIDISCIPLINARY
flujo óptimo de potencia con restricciones de seguridad
generation expansion planning
Lace
levelized costs of Electricity
optimización de sistemas de potencia
planeación de expansión de generación
Power flow
power system optimization
Security
security-constrained optimal power flow
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Summary:This paper presents a methodology to estimate the Levelized Avoided Cost of Electricity (LACE) of new generation projects based on the assessment of economic and operational benefits perceived by an existing power system. The marginal economic benefit caused by the integration of a new generation project is captured using the Differential Revenue Requirement method (DRR); whereas the operational benefits are observed by analyzing the performance of the new project through a preventive DC Security-Constrained Optimal Power Flow (SCOPF) tool. The SCOPF also allows quantifying economic benefits due to replacement of expensive generation, transmission congestion, and N-1 security improvement. Additionally, another metric, called Net Benefit (NB) of a generation project, expressed as the difference between LACE and LCOE (Levelized Cost of Electricity) is also employed in this work. It provides a realistic, easy-to-compute, and intuitive index that helps identifying the most promising generation projects during system expansion planning procedures. Finally, the proposed methodology is applied for computing LACE and NB of different generation projects in Colombia. According to the results, geothermal projects display the most significant LACE and NB. These metrics (LACE and NB) can become useful tools for decision-making in planning process.
ISSN:0012-7353
2346-2183
DOI:10.15446/dyna.v85n206.69577