Improving the flexibility of coal-fired power generators: Impact on the composition of a cost-optimal electricity system

A transformation of the electricity generation system is required to drastically reduce the associated CO2 emissions. In future systems, variable renewable energy sources (wind and solar) are expected to provide a significant fraction of the electricity supply, increasing the requirement for variation management compared with today’s situation. This paper investigates the impacts of measures designed to increase the competitiveness of coal-fired power plants in future energy systems, which are facing restrictions related to CO2 emissions and variable operation as a consequence of high penetration levels of wind and solar power. We investigate the cost-optimal compositions of three regional electricity generation systems with different conditions for generation using renewables with a linear cost-minimizing investment model. The model is applied in two energy policy scenarios: one with a tight cap on CO2 emissions, and one with a stringent requirement for generation from renewables. In a system with a stringent requirement for electricity generation from renewables but without a CO2 cap, coal-based technologies with improved cycling properties provide variation management, given that the development of measures for ensuring improved flexibility continues and reaches full-scale implementation at moderate cost. The effects of improved cycling properties on the system composition are especially relevant for regions with moderate potential for wind and solar generation, in that they reduce wind curtailment and improve the underlying conditions for investments in solar power. In the system with a tight CO2 cap, only coal-based technologies with Carbon Capture and Storage (CCS) and co-firing of biomass are feasible. Increasing the share of biomass in co-firing technologies to achieve negative CO2 emissions increases the competitiveness of these technologies to a greater extent than if simply the cycling properties are improved. A larger co-firing fraction reduces the total system costs, since it facilitates the provision of low-cost flexibility by Natural Gas Combined Cycle (NGCC) plants, and it is especially important in regions where nuclear power is otherwise cost-competitive, as low-cost flexibility stimulates investments in wind and solar power at the expense of nuclear power.