Energie : papiers de recherche moissonnés (29/03/2017)

The French Nuclear Bet / Q. Perrier. Milan: Fondazione Eni Enrico Mattei, 2017, 45 p. (Nota di Lavoro 18.2017) http://www.feem.it/userfiles/attach/20173231228164NDL2017-018.pdf

Following the first oil crisis, France launched the world’s largest ever nuclear energy program, commissioning 58 new reactors. These reactors are now reaching 40 years of age, the end of their technological lifetime. This places France at an energy policy crossroads: should the reactors be retrofitted or should they be decommissioned? The cost-optimal decision depends on several factors going forward, in particular the expected costs of nuclear energy production, electricity demand levels and carbon prices, all of which are subject to significant uncertainty. To deal with these uncertainties, we apply the Robust Decision Making framework to determine which reactors should be retrofitted. We build an investment and dispatch optimization model, calibrated for France. Then we use it to study 27 retrofit strategies for all combinations of uncertain parameters, which amounts to nearly 3,000 runs. Our analysis produces two robust strategies, which involve shutting down between 7 and 14 of the 14 oldest reactors, while extending the lifetime of all remaining reactors. These strategies provide a hedge against the risks of unexpected increases in retrofit costs, low demand and low carbon price. Our robust strategies differ from the official French government scenarios on the timing and number of reactors suggested to be decommissioned. They provide a timely contribution to the current debate on the extension of lifetime of nuclear plants in France.

Mapping and analyses of the current and future (2020 – 2030) heating/cooling fuel deployment (fossil/renewables). European Commission, Sept 2016 http://ec.europa.eu/energy/en/studies/mapping-and-analyses-current-and-future-2020-2030-heatingcooling-fuel-deployment

These are the final results of a study of fuel consumption (WP1) and technologies (WP2) used in the heating/cooling sector in EU28+3 (Tender ENER/C2/2014-641). Analysis of scenarios up to 2020 and 2030 (WP3) and a related economic analysis (WP4) were also carried out together with the identification of obstacles, best practices and policy recommendations (WP5). The data set for WP1, WP2 and WP3 is also provided.

The value of flexibility in power markets / Stéphane Goutte and Philippe Vassilopoulos. Paris : Chaire European Electricity Markets, March 2017, 23 p. (Working Paper #26) http://www.ceem-dauphine.org/working/en/THE-VALUE-OF-FLEXIBILITY-IN-POWER-MARKETS

In this paper we attempt to quantify the net revenues that can be captured by a flexible resource able to react to the short term price variations on the day-ahead and intraday markets in Germany. We find that the difference between day-ahead and intraday revenues for a flexible resource has been increasing (although the profitability has been decreasing on both markets). This difference is more pronounced once 15mn price variations can be captured by a flexible resource. The net revenues from the local 15mn auction (which is held 3 hours after the hourly ”coupled” day-ahead auction) are more than eight times higher than the day-ahead hourly auction but below the net revenues that can be captured with the high prices from the continuous market. The results of the backward-looking empirical estimations allow us to distinguish and quantify two components of flexibility: (1) the ”immediacy” value as we are approaching real-time and the urgency of the delivery increases (this value is revealed during the continuous intraday process and is highly linked to the stochastic nature of power supply and demand (i.e. wind/solar forecasts, forced outages of thermal generation,…) forecast error risk), and (2) the ”flexibility” component as a resource can react to variations of shorter granularity (15mn Vs 60mn). We model and quantify the ”flexibility” component.

The IPO of Saudi Aramco: Some Fundamental Questions / Bassam Fattouh and Laurence Harris. Oxford Institute for Energy Studies, March 2017, 10 p. (Energy insight ; 9) https://www.oxfordenergy.org/publications/ipo-saudi-aramco-fundamental-questions/

In the last few months, there has been a flurry of articles about the Initial Public Offering (IPO) of Saudi Aramco. While such articles offer a fresh perspective on the complexities involved in the IPO of Saudi Aramco, key issues are still missing in the debate. This short paper tries to fill some of these gaps. First, it emphasizes that the IPO can’t be isolated from the range of recent reforms and adjustments taking place in Saudi Arabia and the pace of these reforms will be key in determining the valuation of Saudi Aramco. At the same time, the IPO will determine the pace and success of these reforms. So a bet on Saudi Aramco is a bet on how successfully one thinks that Saudi Arabia, in an era of lower oil prices will adjust its economy and diversify its economic base. Second, it raises the question as to the main underlying motivation behind the IPO. The answer to that question is often taken for granted: an effort ‘to wean the kingdom off oil through Vision 2030 which aims to diversify the Saudi economy and create jobs’. But the IPO is mainly about income diversification and boosting the resources of the Public Investment Fund. This is fundamentally different from ‘real’ economic diversification, which is often associated with expanding the economic base and job creation. As the experience of neighboring countries has shown, sovereign wealth funds predominantly diversify their assets by investing in foreign markets rather than in diversification of the domestic economy into employment creating sectors. Finally, this comment attempts to clarify some confusion regarding the IPO, particularly in relation to the ownership of the reserve base with some arguing that ‘there are reasons to be cautious about expecting much more transparency’ because ‘it is far from clear that any share sale would include ownership of the reserves in the ground’. As argued in this paper, the issue of ownership of reserves is not that relevant as Saudi Aramco, in which investors will have an ownership stake, has and will continue to have an exclusive concession to exploit the underground reserves including the right to monetize any potential growth in these reserves.

La crise de l’électricité en Australie du Sud, Lettre Géopolitique de l’électricité, n° 73, mars 2017, 8 p. http://www.geopolitique-electricite.fr/documents/ene-221.pdf

La Société Européenne de Physique avait indiqué que l’intégration de sources intermittentes (solaire et éolien) deviendrait difficile au-delà d’une part supérieure à 30%-40% dans l’électricité. La crise actuelle que traverse l’Australie du Sud fournit une confirmation expérimentale. Les prix s’envolent et les black out se succèdent.L’exaspération des habitants politise la question. Un Plan d’urgence a été dévoilé par le Gouvernement local dont la premier point revient à la construction de centrales à gaz publiques et privées. Ainsi, à l’échelle française, cela reviendrait,pour les seules centrales publiques, à bâtir un parc de capacité supérieure à cinq EPR de toute urgence. Sans se prononcer sur ce Plan, l’Office du Marché de l’Energie australien prévoit d’ici à deux ans, 125 jours de pénurie d’électricité en Australie du Sud et une très forte probabilité de coupures lors du prochain été austral.

Marché du charbon vapeur en 2016 : le choc de l’offre / Sylvie Cornot-Gandolphe. Paris : Ifri, 2017, 44 p. (notes de l’Ifri) http://www.ifri.org/fr/publications/etudes-de-lifri/marche-charbon-vapeur-2016-choc-de-loffre-0

Étonnants marchés charbonniers : alors que la demande mondiale de charbon est en baisse, le prix international du charbon vapeur a doublé en 2016. Après cinq ans de baisse continue des prix et une demande mondiale en berne, cette formidable hausse peut paraître paradoxale. Cette note en explique les principales raisons et se focalise sur le commerce international de charbon vapeur.

Twelve economic facts on energy and climate change / Diane Whitmore Schanzenbach, Ryan Nunn, Audrey Breitwieser, Megan Mumford, Gregory Nantz, Michael Greenstone and Sam Ori. A joint report from The Hamilton Project and the Energy Policy Institute at the University of Chicago. Brookings Institution, March 2017, 24 p. https://www.brookings.edu/research/twelve-economic-facts-on-energy-and-climate-change/

The United States is in the midst of an energy revolution. The North American shale boom has unlocked vast quantities of natural gas, upending domestic electricity markets and enabling rapidly growing export volumes. American shale oil has sent global oil prices to their lowest sustained level in a decade and slashed U.S. imports in half. Meanwhile, the cost of renewable fuels like wind and solar electricity has plummeted, and they now account for the majority of new electric generating capacity.

Danièle Revel

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