Concerns around reliability in China’s electricity sector have rekindled interest in a traditional solution: building more coal-fired generation. However, over the past decade China’s electricity sector has seen significant changes in supply costs, demand patterns, and regulation and markets over the past decade, with falling costs for renewable and storage generation, “peakier” demand, and the creation of initial wholesale markets. These changes suggest that traditional approaches to evaluating the economics of different supply options may be outdated. This paper illustrates how a net capacity cost metric – fixed costs minus net market revenues – might be better suited to evaluating supply options in China. Using a simplified example with recent resource cost data, the paper illustrates how, with a net capacity cost metric, solar PV and electricity storage may be a more cost-effective option for meeting demand growth than coal-fired generation.  

Concerns around reliability in China's electricity sector have rekindled interest in a traditional solution: building more coal-fired generation. However, over the past decade China's electricity sector has seen significant changes in supply costs, demand patterns, and regulation and markets, with falling costs for renewable and storage generation, "peakier" demand, and the creation of wholesale markets. These changes suggest that traditional approaches to evaluating the economics of different supply options may be outdated. This paper illustrates how a net capacity cost metric - fixed costs minus net market revenues - might be a useful metric for evaluating supply options to meet peak demand growth in China. Using a simplified example with recent resource cost data, the paper illustrates how, with a net capacity cost metric, electricity storage and solar PV may be a more cost-effective option for meeting peak demand growth than coal-fired generation.

Berkeley Lab has published a series of briefs analyzing interconnection cost trends across five U.S. wholesale electricity markets. The series employs extensive data collection (2500+ project-level interconnection cost estimates) and analysis for MISO, PJM, SPP, NYISO, and ISO-NE. The data provides developers, regulators, policymakers, and other stakeholders with critical insights about interconnection cost data that are often difficult and inefficient for the public to obtain. This presentation offers a summary of the analyses followed by key results for each market. We find: -Interconnection queues have exploded over the past years, resulting in lengthy study processes with high applicant withdrawal rates. -Interconnection cost estimates are not available as pre-request information but require a lengthy interconnection study process. Final cost estimates remain difficult to collect. -Interconnection costs have grown substantially over time in all studied regions. -Projects that have completed all required interconnection studies have the lowest cost compared to applicants still actively working through the interconnection process or those that have withdrawn. -Upgrade requirements of the broader transmission system are the primary cost driver. -Many projects facing high interconnection costs withdraw from the queue. -Renewables and storage projects have higher interconnection costs than natural gas power plants. -Larger generators have greater interconnection costs in absolute terms, but economies of scale can exist on a per kW basis. Interconnection costs vary by location This work was funded, in part, under the U.S. Department of Energy’s Interconnection Innovation e-Xchange (i2X)