(547a) Go Now or Wait and See? - Optimal Investment Timing in National Power Systems

The reluctant deployment of low-carbon and zero-carbon power generation and energy storage technologies, perhaps besides wind and solar power technologies, are impeding the transition to power system decarbonisation. We put to test the notion that a strategy of waiting for a "unicorn technology'' to become available could be more effective than deploying technologies which are commercial and viable today.
Especially in the context of Carbon Capture and Storage (CCS) equipped power plants, we are facing the question if it is economically and environmentally more sensible to ''go now'' or to "wait and see''.

To answer such a question, we have expanded on previous work [1], in developing a mixed-integer linear formulation of a hybrid power generation capacity expansion and unit commitment model with a high level of technical detail. We apply a novel time clustering and profiling technique to compress hourly time-dependent data sets achieving an average error in system-level results of -1.7 % to 2.5 % compared to the full hourly time series over the planning horizon from 2015 to 2050. The national-scale model is implemented in different facets of temporal and spatial (dis-)aggregation; it considers up to 2000 units of 16 different power generation and storage technologies, including international interconnectors for electricity import and export, and grid-level energy storage. The Electricity System Optimisation framework (ESO-XEL) includes the consideration of endogenous learning for technology capital cost in a piece-wise linear fashion.

We compare a baseline scenario on the power system expansion of the United Kingdom (UK) with a scenario where a ''unicorn technology'' becomes available for deployment in 2035. This technology is parametrised as a zero-carbon emission, dispatchable, highly flexible power generation option at low capital and operational cost. We observe that the effect of such a technology becoming available reduces the deployment for nuclear, unabated gas-fired power generation, as well as intermittent renewables. Also, CCS-equipped power generation would reduce by 36 %, however, it remains a vital part of the least-cost capacity mix in 2050. Furthermore, its optimal investment timing remains unaffected by the availability of the future disruptive technology. Total system cost are reduced by 2 % by the deployment of the unicorn technology. More significantly however, without the deployment of CCS-equipped gas and coal-fired power plants total system cost by 2050 could be 44 % greater compared to the baseline scenario.

[1] C. F. Heuberger, I. Staffell, N. Shah, and N. Mac Dowell. Levelised Value of Electricity - A Systemic Approach to Technology Valuation. In 26^th European Symposium on Computer Aided Process Engineering, volume 38, pages 721-726, 2016.