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Variable Electricity Supply

Page history last edited by Ulrich Bonne 12 years, 8 months ago

Influence of variable electricity supply on synthetic fuel price.

Ulrich Bonne, Kailua-Kona, Hawaii, ulrichbonne@msn.com,

6 June 2011, rev. 10 August 2011



We looked into the economics of how much the cost of renewable but variable wind, PV or grid electricity would have to drop to compensate for the added cost of enlarged but part-load equipment and/or storage, to achieve (1) an effectively 24/7 steady power supply to a synthetic fuels plant, and (2) produce fuel of the same price as with a constant electricity supply.  We used a simplified life-cycle cost analysis in which electric energy availability varies according to an assumed periodic daily cycle. Equipment and/or battery size and cost increase, as electricity supply capacity factor and the fraction of time decrease at which electricity flows directly from source to plant without storage (batteries) or enlarged front-end equipment with product storage, as illustrated in the block diagram at right.

     Of course in reality, wind speed, PV and grid power averages may not only experience daily cycles, but also longer, seasonal cycles, which were ignored in this analysis.

     For one example involving an electricity availability capacity factor of 50%, using popular lead-acid batteries, electricity cost would have to drop by over 5 ¢/kWh to compensate for the battery cost, and enable synfuel to be priced at the same level as with a 100 % capacity factor.  An enlarged H2 front-end production system with appropriate H2 tank storage of a synfuel plant, in which H2 needs to be produced anyway for further processing, turned out be more economical than battery storage. In this case, a capacity factor of 50% may only require a decrease of 0.6 ¢/kWh in the maximum cost of electricity, in order to still meet the same fuel price goals.

     We also quantified what effect profit goals can have on the maximum allowable electricity cost: For example a 5% drop in the 30-year-levelized ROI was equivalent to a 1 ¢/kWh of allowable increase in the cost of electricity.

     By not including in this analysis the effects of CPI (consumer price index) and fuel price escalations, the results are more conservative than if those effects had been included.

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