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Opportunities for New Electricity Generation Technologies in South Australia
Ntasha Berry, BSc. (Honours) Finance
Project submitted in partial fulfilment of the requirements for the degree of MSc (Energy and Resources), UCL School of Energy and Resources, Australia.
Torrens Medal Winner 2012
Over the next decade the electricity market in Australia will undergo unprecedented changes because of technological innovation of new generation technologies, climate change policies and movements in fossil fuel prices. As a result of these changes the relative cost of generating electricity from new generation technologies could change substantially.
My research identified potential for new generation technologies in South Australia by considering the effect of key parameters; these being access to finance, carbon price, fuel price and stability of specific energy policies that could be deployed in the future.
I did this by considering the electricity generation market in South Australia and analysing the potential for new generation technologies in the context of the Clean Energy Future legislation and the expected rise in domestic gas prices.
In order to comprehend the effect of these changes on the electricity generation landscape in the future, my research analysed the prospects for new generation technologies by considering the levelised cost of generating electricity from them. While the levelised cost of electricity is the appropriate tool for analysing the comparative costs of various generation technologies against each other, it fails to reflect the uncertainties which power systems are subjected to, at various levels.
Hence, in order to determine opportunities for new generation technologies under uncertainty in South Australia, I used least-cost generation expansion modelling, using Plexos® Desktop Edition – the power system modelling software by Energy Exemplar. The objective of the least-cost generation expansion model was to determine a set of generation options from a range of technologies, which minimised the cost (operational plus capital) over time, considering the demand, carbon price, and gas price uncertainty in the future.
However, each technology has potentially decisive strengths and weaknesses which do not always get reflected in their cost estimates; hence this research has also considered the outlook of investors towards various technologies and subsequently identified their strengths and weaknesses.