3: Supply Curve Development. Methodology

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1 3: Supply Curve Development Methodology

2 Supply Curve Development in China Zhangbei Wind Example Supply curves for renewable energy typically reflect the cumulative quantity of various renewable resources/projects, ranked from lowest to highest cost. Supply curve can be comprised of a single technology or multiple technologies Wind supply curve (Zhangbei) compares capacity of wind technologies and cost Tariff with VAT (yuan per kwh) Available Wind Supply Curve - Zhangbei GE77 DZh S GW77 Turbine Avg ,000 4,000 6,000 8,000 10,000 12,000 Installed Capacity (MW) RETI Example RETI supply curve compiles all renewable energy options in a region into same supply curve -2

3 Steps to Developing Renewable Energy Supply Curve 1. Group resources with similar characteristics using GIS 2. Develop performance and cost assumptions to calculate cost (busbar cost = LCOE) for each Resource Group 3. Create supply curves using LCOE for specified regions by rank ordering lowest to highest cost resources -3

4 Group and Characterize Resources Using GIS maps, determine technical potential. Apply exclusions for developable resources. Identify groups of similar developable resource. Quantify resource. Determine location-specific performance of resource Determine location-specific cost structure of resource. -4

5 Technical Potential Using GIS Mapping Wind Solar PV Solar CSP -5

6 GIS Resource Assumptions and Exclusions Onshore Wind Offshore Wind Solar PV Solar CSP Capacity 5 MW/km 2 5 MW/km 2 30 MW/km 2 30 MW/km 2 Efficiency WPD/CF Used to calculate energy 15% 15% Ground coverage ratio 50% 25% Exclusions Protected areas All Protected Areas Excluded Slope Over 20% Over 20% Over 5% Over 3% Elevation Over 5000 m Over 5000 m Over 4000 m Over 4000 m Depth None Distance from Shore Over 100 km Resource Under 200 WPD Under 300 WPD None Under 5 kwh/m 2 - day Land Use Croplands 50%, Forests 90% None Croplands 100%, Forests 90% Croplands 100%, Forests 90% -6

7 Wind Resource Assessment Wind Resource After Exclusions Applied Apply Exclusions -7 Generation Resource Potential Class TWh WIND ONSHORE Generation Resource Potential Class TWh WIND SHALLOW OFFSHORE DEEP OFFSHORE

8 Solar PV Resource Assessment Solar PV Resource After Exclusions Applied Apply Exclusions Generation Resource Potential Class TWh SOLAR PHOTOVOLTAIC

9 Solar CSP Resource Assessment Solar CSP Resource After Exclusions Applied Apply Exclusions Generation Resource Potential Class TWh SOLAR THERMAL (CSP)

10 Performance and Cost Assumptions for LCOE Resource Generation Potential Capital Cost O&M Capacity LCOE Class TWh RMB / kw RMB/kW-year Factor RMB/kWh WIND ONSHORE WIND SHALLOW OFFSHORE DEEP OFFSHORE SOLAR PHOTOVOLTAIC SOLAR T HERMAL (CSP)

11 China LCOE Supply Curves Wind Solar PV and CSP 1200 RMB/MWh Wind Onshore Wind Offshore RMB/MWh Solar CSP Solar PV ,300 4,500 6,700 9,000 11,000 13,000 16,000 18,000 20,000 22,000 25,000 27,000 TWh ,000 66,000 98, , ,000 TWh 200, , , ,000 2,000 Similar resources ranked from lowest to highest cost (LCOE) RMB/MWh 1,800 1,600 1,400 1,200 1, Wind Onshore Wind Offshore Solar CSP Solar PV Combined Combined for a national, multiresource supply curve ,100 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 TWh 50,000 55,000 60,000 65,000 70,000 75,000 80,000 85,000 90,000 Total 340,000 95,000-11

12 Supply Curves for Different Cost Perspectives Example: Western RE Zones; consideration of valuation, integration, and transmission, capacity planning, dispatch -12

13 Time Based Considerations Declining capital cost over time can alter the supply curve and will depend on point in time of analysis. Example below is for Solar PV. Solar PV Supply Curve Cost (Real RMB/MWh) Declining Capital Cost ,000 57,000 85, , , , , , ,000 Energy (TWh) -13

14 Other Supply-Curve Modeling Considerations -14 Renewable Energy Technology Coverage to Include Wind, PV, CSP, biomass, hydro, geothermal, ocean Data for Renewable Energy Resources Degree of geographic detail and validation Usability of Resulting Data / Modeling Tool Analysis could be conducted in GIS, then exported to easier-to-use Excel format Development Time Frame If multi-year analysis, consider intermediate potential for each milestone year Current Cost or Also Projected Cost If projected cost, seek cross-technology consistency

15 Summary and Next Steps Different renewable energy technologies can be combined into a single supply curve Supply curves can represent different costs, depending on the scope of the analysis Supply curves can be refined with more detail and better accuracy, depending on goal of analysis -15

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