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dc.contributor.authorSimshauser, Paul
dc.date.accessioned2021-01-11T02:01:50Z
dc.date.available2021-01-11T02:01:50Z
dc.date.issued2020
dc.identifier.issn0140-9883
dc.identifier.doi10.1016/j.eneco.2020.104888
dc.identifier.urihttp://hdl.handle.net/10072/400853
dc.description.abstractMerchant renewables are a new asset class. With historically high cost structures and low wholesale prices associated with merit order effects, continuity of entry has been reliant on Renewable Portfolio Standards or other policy initiatives such as government-initiated Contracts-for-Differences. But in Australia's National Electricity Market, sharply falling costs of renewables and volatile wholesale market conditions over the period 2017–2020 led to a surprising number of merchant intermittent renewable investments. Adding to the merchant renewable fleet are older wind plants whose inaugural long-dated PPAs recently matured. Rolling over PPAs is possible, but not necessarily optimal. In this article, a merchant gas turbine, merchant wind, and an integrated portfolio comprising both plants are valued in the NEM's South Australian region. Asset valuations reveal surprising results. The modelling sequence shows stand-alone gas turbine valuation metrics suffer from modest levels of missing money, that merchant wind can commit to some level of forward (fixed volume) swap contracts in-spite of intermittent production, but the combined portfolio tightens overall valuation metrics significantly. Above all, the combined portfolio is financially tractable, overcoming the missing money for a gas turbine plant undertaking peaking duties. In a NEM region where intermittent renewable market share exceeds 50%, this suggests the energy-only, real-time gross pool design may yet be deemed suitable vis-à-vis meeting environmental objectives and Resource Adequacy.
dc.description.peerreviewedYesen_US
dc.languageEnglishen_US
dc.publisherElsevier
dc.relation.ispartofpagefrom104888
dc.relation.ispartofjournalEnergy Economics
dc.relation.ispartofvolume91
dc.subject.fieldofresearchElectrical and Electronic Engineeringen_US
dc.subject.fieldofresearchMechanical Engineeringen_US
dc.subject.fieldofresearchApplied Economicsen_US
dc.subject.fieldofresearchcode0906en_US
dc.subject.fieldofresearchcode0913en_US
dc.subject.fieldofresearchcode1402en_US
dc.subject.keywordsSocial Sciencesen_US
dc.subject.keywordsBusiness & Economicsen_US
dc.subject.keywordsMerchant renewablesen_US
dc.subject.keywordsPeaking planten_US
dc.titleMerchant renewables and the valuation of peaking plant in energy-only markets
dc.typeJournal article
dc.type.descriptionC1 - Articles
dcterms.bibliographicCitationSimshauser, P, Merchant renewables and the valuation of peaking plant in energy-only markets, Energy Economics, 2020, 91, pp. 104888
dcterms.licensehttp://creativecommons.org/licenses/by-nc-nd/4.0/en_US
dc.date.updated2021-01-11T01:58:41Z
dc.description.versionAccepted Manuscript (AM)en_US
gro.rights.copyright© 2020 Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence (http://creativecommons.org/licenses/by-nc-nd/4.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, providing that the work is properly cited.en_US
gro.hasfulltextFull Text
gro.griffith.authorSimshauser, Paul E.


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