ESF Vocab 2

mikegibbs's version from 2015-12-07 05:30

Ch. 5 Grid Economics


Question Answer
LCOEaggregates and averages over the time period all of the costs per unit of electricity produced: metric utilities use to for the cost of electricity
Overnight Costscost of completing the generation asset and putting it into service as if it were to happen instantaneously or "overnight" - all work leading up to the commissioning of a plant
O&M CostsFixed O&M- operations and maintenance costs to keep asset in operation. Variable O&M- maintaining the plant become more costly the more it is used; generator creates additional wear and tear that must be maintained, cost is calculated on a marginal basis
Discount Ratecosts of investment or overnight costs that need to be spread over many periods require discount rate. For LCOE it measured as WACC
Busbar Costsynonymous with LCOE
Asset Life(LCOE) estimated lifespan of a depreciable asset pg. 8
Financing Period(LCOE) Shorter than Asset Life pg. 8
Decommissioning Costs(LCOE) costs incurred for shut-down, scrap, or environmental remediation pg. 8
Repowering(LCOE) subsequent investments to improve generator life or performance in the middle of its life pg. 8
Market Clearing Priceis achieved when an equilibrium price has been reached where all profit for the seller and benefit for the buyer have been exhausted
Merit Orderprioritizing by the lowest cost producers to the more expensive until the load is met
Marginal Costcost to produce one more or one less unit of something
Supply Stackthe aggregate of all producer bids for electricity in the wholesale market
Average Cost(opposed to marginal cost) average amount needed to invest in capital to meet the the utilities demand for bulk power purchases
Power Purchase Agreementfixed rate at which the utility supplies electricity to a consumer
Feed-in-tariffstypical a long-term agreement for pricing so solar and smaller generators can facilitate production
Risk-adjusted returna fair return for the risks people bear in investment in capital- investors that believe they will achieve their expected returns should charge less for the capital they provide
Balance Sheet Financerelying on the strength of one's balance sheet and available capital to make capital expenditures from their current assets or cash flow- advantage is the company can internally determine the suitability of an investment, without having to go to a third-party lender which increased the speed and decreases the risk of contracting external financial partners
Project Finance(converse to Balance-sheet finance) assets are financed by their own merits- advantage is aligning the cost of capital with the project of asset type, also allows for larger investment pool that many investors can participate in
Credit Enhancementreassurance to the lender that the borrower will honor obligations by, ensuring fixed revenue, insurance, or loan guarantees pg. 26
Non-diversifiable risksrisks that are uninsurable: safety risks, political risks, revenue or cost certainty
Completion riska new project that is not ready to perform within the anticipated timeframe and at the anticipated cost in original project plan
Revenue riskthe risks a project faces after it is operational: price risk (price changes from original forecast) and volume risk (volume of the output may be lower than expected)
take-if-offered contractbuyer accepts the good at a pre-agreed price and a pre-agreed time
take-or-pay contractthe buyer pays the agreed price for the agreed volume whether or not they take the delivery of the good or service
Supply Riskrisk relating to access to the inputs necessary to operate the plant as well as future changes in the sot of that supply from the original expectations: so of physical resources, market risk, upstream disruptions
Operation Riskrisk that the asset will fail to perform cost-effectively or at all
Throughput Agreementoften for pipelines, allows for cost-sharing by proportion of use and other protections to ensure asset remains in operation


  = Ch. 9 Electricity Demand Management


Question Answer
Energy Efficiencychanging the performance of devices through design or operation of existing and future electricity driven devices for less energy input
Demand Responsechanges the peak load of electricity consumption- make sure that demand can be managed to optimize the peak capacity needs of the electricity system when the grid is most constrained, DR is a POWER application in contrast to ENERGY application of energy efficiency
Smart Gridenhanced electrical grid through monitoring by computer controlled systems, telecommunications, and tech. revolutions: advanced metering,
Demand Management
Load Profiledescribes how much load is used and when it is used throughout the day
Principal-agent problem(Bad Price Signals) the burden of the principal incurring the costs of making the necessary investments for demand management
Myopianearsightedness in investment and consumption decisions
Elasticityresponsiveness of an economic variable to a change in another
Energy Conservationreducing the need for energy services and forgoing the potential benefits that they might bring
Electric Efficiencyuseful energy output divided by the total electrical power consumed in producing output E=Total Useful Energy Out/ Total Electricity In represents efficiency in %
Parasitic Loadenergy used when device is on standby and not actually performing its task
Cost-Benefit Analysisweighing the costs and benefits by knowing the physical savings as a convert to energy savings
Payback Periodratio of total upfront investment/ annual savings benefit - often used to understand how many years it would take for the savings to repay the initial investment
Benchmarkbuilding or device performance characteristics prior to intervention: point of reference against which things are compared.
System Benefits Chargecharging customers to pay for EE solutions: training, certifications, marketing & outreach
Incentive Regulation increase revenue and/ or profit when utilities can meet or exceed efficiency performance benchmarks
Time of Use Rateslower electricity rates for consumption that happens during non peak times while charging higher rates for consumption that occurs near peak
Interruptible Tariff(incentive methods for demand response) lower electricity rate to customers who will reduce their energy consumption at the direction of the utility for a certain period- generally large industrial consumers that agree to have their load "interruptable"
Direct Load Controlcentral and automated control of the devices in demand management situations- once load hits peak, use of these devices is limited or curtailed
Capacity Payments

Ch. 10 Electric Storage


Question Answer
Secondary Battersrechargeable battery- allows for the chemical reaction to be reversed so flow is bidirectional
Primary Batterystandard battery that cannot be recharged
Flow Batterystill chemical energy, just stored electrolytes in separate tank outside of device- allows for a variation of POWER that can be generated and ENERGY that can be produced
Pump Hydropumping water to higher elevation where it can be stored in a reservoir for later use
Compressed Air Energy Storageforcing air into a container which can be recaptured later by the release of pressure driving an air engine
Specific Energyamount of energy that can be stored in the device or system per unit of mass
Energy Density(similar to Specific Energy) more about ability to store energy per-unit of volume
Specific Power and Power Densityboth Specific Energy and Energy Density can be measured function of power rather than energy if the application is intended to provide primary power outputs
Round Trip Efficiencyefficiency which energy can be stored and then converted back into electricity- high roundtrip efficiency mean a lot of the input energy comes back as useful output
Parasitic Lossesamount of energy that is lost during storage
Response Timehow quickly chemistry responds to signals to initiate its use
Cycle Lifetotal number of cycles a device has before it degrades to unacceptable level
Power Qualitythe fitness of electric power to consumer devices: synchronization of voltage frequency and phase allows devices to function as planned.
Peak Shavingmoving small amounts of energy during peak energy of the grid: Load Leveling is more about shifting the economics of the grid as a whole
Load Shiftingenergy input from a few hours earlier being delivered at peak- this is compensated by the differential value when the energy was stored and when it was consumed
Load Levelingwhen Load Shifting reduces the top and fills the bottom of the load curve pg. 20
Day-night Arbitragebuying power at the cheap hours of the night and selling it back during the expensive peak hours during the day
Levelized Cost of StorageLCOE except for electrical storage


  = Ch. 11 Distributed Generation


Question Answer
Distributed Generationpower generation at the point of distribution; generating power on site vs centrally, eliminating the cost, complexity associated with transmition and distribution.
Inverterconverts DC to AC
Solar Constantthe amount of sun hitting any perpendicular surface over time
Insolationthe amount of sun that is available for capture at any point on the surface of the planet
Balance of Systemaggregate components that configure working solar system: Mounting, Racking, Wires; inverter and power management; labor and inspection (pdf pg. 9)
Trackersmove modules with the incoming sun- they "track" the sun
Soft Costsadditional costs due to customer acquisition costs (time to find qualifying customers), design and approvals (determining site specification), financing (ensuring adequate finance solutions), and monitoring and billing (sending statements and bill collections) (pdf. pg. 11)
Third Party Ownershipsystem integrator covers costs and monitoring, while PV customers simply pay for electricity produced by the system
Interconnectionactivities of a generator must be coordinated with the grids operations: interconnection rules, net metering, rate design (pdf. pg. 13)
Net Meteringensures fair compensation for electricity flowing from distributor and grid; simplest way is to count the amount of net Kwh flowing into a house and charge based on that amount
Demand Chargea subset of Rate Design that creates capacity requirements for which the grid must contract to non-resident consumers: this cost is reflected in a demand charge based on their highest historical power requirements
Investment Tax Creditfederal incentive to reduce the installed cost of the system
Feed-in-tarrifsincentive where customers pay for the output of the system rather than paying for a portion of the system itself; provides PV users to feed their electricity into the grid for a preferential rate
Renewable Portfolio Standardincentive that require utilities within a jurisdiction to procure a certain percentage of their supply from renewable sources, but ensuring a competitive rate based on their cost structure
Solar carve-outportion of the Renewable Portfolio Standard that have to be met with solar energy
Experience Curveanalytic tool to understand the product and process innovation across many firms; it is derived by plotting the observed market price or cost data for a type of product on the Y-axise and the cumulative volume that has been produced for that productivity by all manufacturers on the X-axis
Learning RateLR is the percentage drop in the cost to produce the technology for each doubling of cumulative production
Progress RatioPR is 1 minus the LR, a higher LR (lower PR) is a steeper experience curve, also explained as a technology that is more susceptible to cost reductions from scale (pdf. pg. 16)
Economies of Scalethe cost advantage that a firm can obtain by producing more or larger units of its output: when a producer increases its output faster than it increases the cost of its inputs
Market Shakeout(non-linearity in an Experience Curve) when the experience curve is drawn using market prices for the technology instead of the underlying cost structure to manufacture it.
Price Umbrella(under market shakeout which falls under non-linearity of Experience Curve) a pricing effect often created by a dominant company, in which competing firms can find buyers as long as they set their price at or below the level of the dominant one
Grid Paritypoint when distributed PV (photovoltaics) falls to the same level of cost as the grid electricity that displaces it
Early Adoptersthose that adopt a technology early and help drive down its cost until other customers find it economic to adopt as well
Sustaining Technologywhen technology is absorbed into the existing infrastructure and its deployment is limited by the existing deployment architecture, the new technology is referred to as sustaining technology
Disruptive Technologywhen emerging technologies bypass the limiting features of the incumbent architecture and offer wholly new and cost-effective solutions; these new technologies cause substantial change in a system's overall performance and character

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