Modification of the LCOE model to estimate a cost of heat and power generation for Russia

Bratanova, Alexandra and Robinson, Jacqueline and Wagner, Liam (2015): Modification of the LCOE model to estimate a cost of heat and power generation for Russia.

Abstract

The Russian heat sector faces crucial problems including underinvestment, below cost pricing, generation capacity and infrastructure depletion. While the Russian electricity sector has gradually progressed through liberalization, the heat sector is still waiting for similar reforms to occur. The modernisation of the sector requires analysis of energy generation costs to suggest feasible technological solutions and secure an increase of investment in the industry. This study presents a modification of a levelised cost of energy (LCOE) model with cost separation coefficients based on Ginter triangles. The modified LCOE model is applied to a regional case study (Moscow, Russia) providing a comparison of generation technology according to cost estimates for electricity and heat under regionally specific economic and technological conditions. We consider five combined heat and power (CHP) generation technology types for two natural gas price scenarios. The modelling outcomes demonstrate cost competitiveness of gas based CHP technology and provide valuable information to assist decision making for the management of the energy sector in Russia.

• Item Type: MPRA Paper
• Language: English
• Keywords: cogeneration, levelised cost, heat generation, Ginter triangle, Russia, Moscow
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q47 - Energy Forecasting

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