System LCOE: applying a whole-energy system model to estimate the integration costs of photovoltaic

Limpens, Gauthier;Jeanmart, Hervé
(2021) Efficiency, Cost, Optimization, Simulation and Environmental Impact of Energy Systems — Location: Taormina, Italy (28.June.2021)

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On the road to a carbon-neutral continent, Europe will have to implement major changes to its energy system. The following transformations are needed: massive integration of renewable energies, from which intermittent ones; electrification of the heat and mobility sectors; use of renewable fuels (e.g. biogas and hydrogen); and use of storage technologies. As a result, the energy system of tomorrow will be very different from that of today. Recently, technologies based on intermittent renewable announced cheaper production costs than their equivalent fossils. However, these announced costs usually do not account for the adaptation of the energy system to implement back-up technologies or reinforce the grid. The levelised costs of electricity (LCOE), a common metric to compare electricity generation technologies, is extended in this work to compare dispatchable technologies with intermittent ones. By applying an energy model (EnergyScope TD) that optimises the system design and operation, it computes the integration costs of photovoltaic energy and therefore its system LCOE. We find that accounting for the integration costs almost double the system LCOE of the photovoltaic compared to a LCOE calculated on the technology only. Another key finding is the importance of the electrification among sectors, which facilitates the integration of additional intermittent renewables and at a cheaper cost.
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Limpens, G. (2021). System LCOE: applying a whole-energy system model to estimate the integration costs of photovoltaic. Proceedings of Efficiency, Cost, Optimization, Simulation and Environmental Impact of Energy Systems, 34. https://hdl.handle.net/2078.5/166016 (Original work published 2021)