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Global Challenges in Wind Energy: Risks and Costs

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12 diapositives · 246 Views · Aug 22, 2014

Learn about the risks and costs associated with wind energy globally and in European countries, including optimal generation portfolios and economic considerations. Explore key variables for economists and the importance of addressing climate change. Discover strategies for managing project risks and enhancing energy systems planning.

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  1. Risks & Cost ofWind Energy Global Challenges and Opportunities European Wind Energy Conference Milan, Italy 9 May, 2007 Soren Krohn, World Bank Group, ESMAP, Energy Sector Management Assistance Program

  2. Summary • Global Risk & Cost: Climate Change & Mitigation Cost • National Risk & Cost: Optimal Generation Portfolio • Project Risk & Cost: Optimal Risk Sharing Buyer / Seller

  3. Global Risk & Cost • Climate change debate (Stern)driving policy planning • Key Variables for Economists: • Temperature = f(greenhouse gas concentration) • Mitigation cost / ton CO2 equivalent ...and development over time • Baseline energy consumption path • GDP / Capita development • Elasticity of marginal utility of income • Pure rate of time preference

  4. Global Risk & Cost • Concern that wind turbine prices have grown as much as oil prices • Could lead to wind being left outin favor of • Energy Efficiency • Other Renewables (Solar PV case) • Nuclear • "Clean" coal • Adaptation to climate change • Doing nothing • Concern about uncertainty of CO2 prices • Global carbon price needed

  5. (National) Economic Risk & Cost • WBG Guideline:Neither risk aversion nor risk seeking at project level • Exception:Population welfare at stake(oil-GDP effect)

  6. (National) Economic Risk & Cost • Traditional method, China: • Find least cost technology solution

  7. (National) Economic Risk & Cost • Systematic resource risk(bad hydro experience) =>diversification away from hydro • Fuel price volatility =>Weighing cost against risk(not happening at present) • Models inadequate

  8. MadnessorMethod? • Accounting forfuel price risk in power systems planning Economic methodology development withmore to come…

  9. Risk in Power Systems Planning • Develop quantitative model based on: • National fuel prices (large uncertainty) • O&M costs (some uncertainty) • Capital costs (no uncertainty) • Other risks, e.g. CO2 value (large uncertainty) • Risk preferences • Develop recommendations on data • Test model on 2 countries (backcasting), discuss, upgrade • Plug-in for WASP, train users & use it!

  10. Project Risk & Cost • Develop tool for energy regulators for optimal risk sharing between buyer and seller • Exogenous risks • Oil prices, exchange rate, interest rate, ... • Endogenous risk • Seller controlledProject cost overrun, generator availability, mean wind,... • Buyer controlledGrid availability, nationalization, ...

  11. WBG Wind Energy Projects • Argentina, Bolivia, Brazil, Bulgaria, • Cap Verde, Chile, China, Colombia, • Costa Rica, Croatia, Djibouti, • Dominican Republic, Ecuador, Egypt, • Estonia, Ghana, Honduras, Hungary, • India, Jordan, Kazakhstan, Latvia, • Malaysia, Mexico, Kenya, Morocco, • Nicaragua, Outer Mongolia, Pakistan, • Panama, Philippines, Poland, Romania, • Russia, South Africa, Slovakia, Sri Lanka, • Tanzania, Tunisia, Turkey, Ukraine, • Uruguay, Western Balkans, Yemen

  12. Thank You ! • Contact • Soren Krohn,World Bankskrohn@worldbank.orgworldbank.orgESMAP.orgworldbank.org/retoolkit