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a r t i c l e in fo abstract
Article history: The supply-cost curves of renewable-energy sources are an essential tool to synthesize and analyze
Received 24 July 2008 large-scale energy-policy scenarios, both in the short and long terms. Here, we suggest and test a
Accepted 20 September 2009 parametrization of such curves that allows their representation for modeling purposes with a minimal
set of information. In essence, an economic potential is defined based on the mode of the marginal
Keywords: supply-cost curves; and, using this definition, a normalized log-normal distribution function is used to
Renewable energy model these curves. The feasibility of this proposal is assessed with data from a GIS-based analysis of
Cost-supply curve solar, wind and biomass technologies in Spain. The best agreement is achieved for solar energy.
Geographic information system & 2009 Elsevier Ltd. All rights reserved.
0301-4215/$ - see front matter & 2009 Elsevier Ltd. All rights reserved.
doi:10.1016/j.enpol.2009.09.016
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668 S. Izquierdo et al. / Energy Policy 38 (2010) 667–672
Fig. 3. Log-normal fitting of the normalized marginal supply-cost curve for four renewable energies in Spain.
energy; a is the investment annuitization coefficient. The ordered The aggregate potential Pe at this characteristic marginal cost can
supply-cost curve will be referred to below as the marginal be regarded as an intrinsic, characteristic economic potential of
supply-cost function pðcÞ. Its integral, which will be denoted PðcÞ, the technology:
is the aggregate supply-cost function; PðcÞ is therefore the total Z ce
electricity that can be generated at a specific cost smaller than c. Pe Pðce Þ ¼ pðcÞ dc: ð3Þ
0
All the input data in Eq. (1) are expressed in 2006 monetary units,
and have been taken from the following references: wind (MITYC, This characteristic economic potential Pe is therefore, as
2005a), solar PV (MITYC, 2005b; ASIF, 2006), concentrating solar expressed in Eq. (3), the total amount of electricity that can be
thermal (SolarPACES, 2007; MITYC, 2005c), biomass combustion generated at a cost smaller than the characteristic one ce .
(Ragwitz et al., 2003). More information about the procedure for Analogously, a characteristic land occupancy Le and the char-
building the supply-cost curves can be found in Gómez et al. acteristic installed power Pe can be defined.
(2010). Additionally, examples about the evaluation of the The marginal supply-cost curves for some of the renewable
economic impact using these supply-cost curves are described technologies may not be as smooth as the ideal one; this is often
by Gómez et al. (2009) and by Fueyo et al. (2009a). due to the interaction between geographical constraints and
technical issues. This is illustrated in Fig. 3 for the actual supply-
cost curves for four renewable energies in the whole of Spain. In
some cases, e.g. biomass in the figure, the lack of smoothness can
2. Economic potential: definition
hinder the calculation of the mode. To circumvent this difficulty,
in this work the marginal supply-cost curve pðcÞ is first smoothed
When analyzing ab initio the potential supply and the cost of a
to eliminate the noise, and then the mode is obtained by searching
renewable energy, several difficulties arise. First and foremost, the
for the maximum in the smoothed curve. For the smoothing we
technical limit (see Fig. 1) alone is not indicative of economic
use a five-point averaging of the pðcÞ data (i.e. a point in the curve
feasibility. Second, it is difficult to assign a typical or characteristic
is averaged with the two adjacent ones on each side) because it is
cost of the technology: the minimum cost of the STAS (Fig. 1) may
easy to implement, effective and has a good computational
not be representative of a large fraction of the technical potential.
performance; but other methods such an FFT smoothing can be
Therefore, a proper comparison of several technologies with
used.
different supply-cost curves requires the definition of a homo-
geneous characteristic cost.
Ideally, the definition of such characteristic costs should be 3. Models for supply curves
intrinsic to supply-cost curve; it should be applicable to all
technologies; should be clearly defined, leaving no room for Models are presented in this section for the marginal supply-
discretionary assignments; and it should be easy to compute. cost curve pðcÞ and for its aggregate counterpart PðcÞ, and for the
Fig. 2 is a schematic of the shape of the marginal supply-cost aggregate supply-land LðPÞ and supply-power curves PðPÞ.
pðcÞ (continuous line) and the aggregate supply-cost PðcÞ (dashed
line) curves. On the basis of the former curve, a characteristic
3.1. Supply-cost model
marginal cost ce can be defined as the most frequent cost, or the
statistical mode:
An assumed-shape distribution is adopted to model the
ce ¼ mode½pðcÞ: ð2Þ marginal supply-cost curve in terms of normalized (or dimension-
ARTICLE IN PRESS
670 S. Izquierdo et al. / Energy Policy 38 (2010) 667–672
and the marginal cost c, normalized using the minimum cost cmin PV
and the characteristic marginal cost ce : A 1:95782 7 0:01084 2
m lnð1:50761 7 0:00895Þ lnð1:5Þ
c cmin s 0:656377 0:00394 0:65475 7 0:0021
c¼ : ð5Þ
ce cmin w2 =DOF 0.00029 0.00031
R2 0.99066 0.98989
In terms of these normalized variables, the three-parameter log-
normal function is Wind
A 2:26831 7 0:01813 2
A 2
=2s2 m lnð1:358267 0:0137Þ lnð1:5Þ
p ðc; A; m; sÞ ¼ pffiffiffiffiffiffi e½lnðc Þm ; ð6Þ
2psc s 0:85043 7 0:00769 0:83796 7 0:00746
w2 =DOF 0.00381 0.00687
where A is a parameter related to the amplitude, m is the R2 0.95415 0.91718
logarithm of the mean and s is the logarithm of the standard
Biomass
deviation. The cumulative distribution function derived from Eq.
A 1:76181 7 0:03649 2
(6) is m lnð1:478597 0:03409Þ ln(1.5)
s 0:67647 0:01519 0:69513 7 0:00757
A lnðcÞ m
P ðc; A; m; sÞ ¼ 1 þ erf pffiffiffi s ; ð7Þ w2 =DOF 0.00969 0.01086
2 2 0.86755 0.85094
R2
where erf is the error function.
Considering the normalization made, the mode of the marginal
distribution equation (6) is given by can be tested by confirming that fitted parameters fulfill Eqs. (8)
2
c e mode½p ðc; A; m; sÞ ¼ ems ¼ 1; ð8Þ and (9). Furthermore, these parameters are approximately the
same for the four technologies considered.
and the corresponding maximum marginal potential is, substitut- To validate the use of a single fitting value for all technologies,
ing in Eq. (6): we have chosen to set A ¼ 2 for all of them. Considering the
A 2
=2s2 mathematical restrictions derived for the normalized log-normal,
p e p ðc e ; A; m; sÞ ¼ pffiffiffiffiffiffi em ¼ 1: ð9Þ
Eqs. (8) and (9), the other two parameters should be m lnð1:5Þ
2ps
and s 0:65. A new fitting is performed where fixed values A ¼ 2
These two definitions, Eqs. (8) and (9), represent two
and m ¼ lnð1:5Þ are taken and s is fitted and compared to evaluate
restrictions for the three parameters A, m and s. Therefore, the
the suitability of using a common value for the single remaining
generic log-normal distribution chosen to fit p ðcÞ has a single free
parameter. Results in Table 1 indicate that s can be approximated
parameter due to the normalization imposed; the discussion in
by 0.65 for all technologies.
Section 4 indicates how to select the most appropriate value for
The single p ðcÞ function for all four technologies is, thus
the free parameter.
2 2
=20:652
p ðcÞ ¼ pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi e½lnðc =1:5Þ : ð11Þ
3.2. Land- and power-supply model 2p0:652 c
This leads to the following the aggregate supply-cost curve:
For the normalized land occupancy L ¼ L=Le vs P we propose 2 3
to use a second-order polynomial: c
6 ln 1:5 7
2 P ðcÞ ¼ 1þ erf 6 7
4pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi2ffi5: ð12Þ
L ¼ a þ bP þ gP : ð10Þ 2 0:65
However, if the analysis is restricted to the (normalized) range
P A ½0; 1 then the simpler linear expression L ¼ P is accurate This is a rather remarkable result: Eq. (11) is a general
enough, as will be shown in Section 4. approximation for the marginal supply-cost curve in Spain of
For the normalized aggregate power installed P ¼ P=Pe the any of the renewable-technologies examined (wind, solar thermo-
same approach can be applied. electric, solar photovoltaic and cultivated biomass). In Fig. 3 the
equation obtained is plotted with actual data for each technology
from the GIS economic analyses for Spain. The w2 values in Table 1
4. Fitting and discussion reveal that the log-normal hypothesis for the distributions can be
held as valid for all the technologies, the error in the fitting
In order to fit the expression proposed in the previous section increasing with decreasing values for R2. The worst fitting
to the normalized data obtained from GIS, we initially assume that corresponds to the cultivated biomass data set, due to the
restrictions on Eqs. (8) and (9) are not applied. Thus, we start by fluctuating nature of the data. It should be also noticed that the
finding the three parameters for the log-normal fitting of p ðcÞ wind cost is overpredicted in the lower range using the present
using a least-squares method. In Table 1, the resulting best-fitting parametrization; however, the fitting error is smaller than for
parameters and their values for a 95% confidence band are biomass (as confirmed by the resulting regression coefficient, see
presented; additionally, the w2 statistic and R2 regression Table 1). It should be noted that our model uses a geographically
coefficient are shown. The suitability of the log-normal model uniform spacing for the wind turbines; further work would be
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S. Izquierdo et al. / Energy Policy 38 (2010) 667–672 671
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