title: Hydrogen Turbines Follow On - CCS and H<sub>2</sub> Dispatch modelling - Scenarios 1 &amp; 2 Results Pack
Creators: name: Baringa Partners LLP
Publisher: name: ETI
Year: 2017
Subjects: subject: Carbon Capture and Storage
subject: HYDROGEN and FUEL CELLS (Hydrogen - Hydrogen storage)

description: Various scenarios for the UK’s power fleet composition in 2030 and 2040 were developed. Dispatch modelling in Plexos was carried out by Baringa on these fleets to investigate the role gas-fed plants might have in future. This includes the ability to study load factors, stop/starts etc., and together with concomitant pricing, provide a picture of investment remuneration.The effect of key drivers is studied e.g. gas price<br><br>This slide set summarises the results for scenarios 1 and 2, along with the assumptions underlying the modelling, and these will be used to inform the final S3 market runs which will then be the basis of the subsequent asset valuation analysis<br><br>Key conclusions arePlant operationH<sub>2</sub> turbine is highly sensitive to gas and carbon prices (more so to gas price)CCGT CCS generation is far less sensitive and provides baseload power most of the time across the scenarios testedNote the £35.1/tCO<sub>2</sub> and 7.7 £/GJ case has an output subsidy on CCS hence load factor is slightly higherPower pricesESME fleet capacity margin is tightCM clearing price cap hit and significant scarcity/uplift in wholesale pricesSubsidies for low carbon generation not having material impact on power prices (limited impact on CCGT CCS LF)Choice of final wholesale market scenario and ESME fleet is important as this will form the basis for asset valuationDrives asset dispatch against market pricesImpacts CM clearing price (combination of de-rated capacity and revenues from wholesale market impacting bids)Potential changes to ESME run for scenario 3, before re-running PLEXOSSuggest using Baringa commodity prices in ESME (based on recent IEA WEO publication) as more recent than ESMEContinue to use ESME output carbon price, but noting that real 2030 policy incentive could be significantly lowerInitial CM analysis based on ESME fleet suggests capacity is ‘too tight’ pushing up CM clearing and wholesale prices, need to revisit peak margin constraint in ESME to ensure more capacity is built –two parts to this:De-rating factors in ESME more optimistic compared to GB CM factors (except for interconnectors), but haven’t been updated for a while, question about whether to use BEIS CM numbersReserve margin constraint currently 15% above peak demand, but this needs to covers a range of factors which may not all be included or have different underlying assumptionsCurrent constraint only against end-use demand -needs to include distribution/transmission losses ~6.5%-Account for mark-up between ESME timeslice blocks to ½ hour peak (~7% delta in current scenarios)Actual reserve margin target (3.4% current CM target, although this may change in future)Largest infeed loss (currently ~900MW but expected to increase to e.g. 1600 with new nuclear)TimescalesNeed to have fully finalised scenario 3 wholesale market run (potentially different spot years of same mix) by early in w/c 20th to ensure sufficient time for asset analysis, but ideally bring this forward