Discussion: How do plants with 0 full load hours affect the profitability of a plant?

[wmeyers]

In continuation of #1194.

1. Open a new scenario NL, 2030.
2. Turn on Merit Order, set 'Profitability' as dashboard item, Plant Profitability is >98%
3. Set Pulverized coal power plants to 18.0, Plant Profitability goes down to 2.8%. Full load hours of Pulverized Coal are 4874
4. Set Coal IGCC to 0.0, Plant Profitability goes down to 1.9%. Full load hours of Pulverized Coal are 5012. It is still unprofitable
5. Set Gas CCGT to zero. Profitability goes to 61.8%, Pulverized Coal is conditionally profitable, but full load hours are still 5012
6. Set all other gas plants to zero. Pulverized Coal is conditionally profitable, but full load hours are still 5012
7. Remove Coal Plant for Disctrict Heat. Profitability goes up to 100%, full load hours of pulverized coal are still 5012

So how can it be that Full Load Hours stay the same, but the profitability goes up? Or maybe put differently: do users have to see what the price setting plant is and how that influences the merit order calculation?

[dennisquintel]

So how can it be that Full Load Hours stay the same, but the profitability goes up?

The price of electricity is determined by demand and supply. (More extensive explanation available in the README in Merit)

So, if demand for electricity increases (and the plant can keep producing), it sells the electricity at a higher price -> more revenue -> more profit.

Do users have to see what the price setting plant is and how that influences the merit order calculation?

This can change every hour, so this is a list of 8.760 plants.

[wmeyers]

And how do plants with 0 full load hours influence the profitability of other plants?

This can change every hour, so this is a list of 8.760 plants.

That would be interesting haha ;-)

[dennisquintel]

And how do plants with 0 full load hours influence the profitability of other plants?

Good question. Not directly, but indirectly they do: if one plant shuts down, the other can produce more, another plant will become the 'price setting producer' and the FLHs and electricity price can change.

[dennisquintel]

This can change every hour, so this is a list of 8.760 plants.

That would be interesting haha ;-)

We could provide an average electricity price... that might be interesting? Or even cooler: an electricity price curve.... Something for the next Merit Order project?

[AlexanderWirtz]

I have been thinking about nice next steps and curves would be great. Price curves, but also load curves of plants. Let's keep that idea until someone is willing to pay for the import/expert extension, based on the talks with Bert den Ouden.

[wmeyers]

So this part is really puzzling for me. In the procedure I describe above the Full load hours of the plants don't change a whole lot, but still the percentage profitable and HOW profitable they are changes with every step. Can someone explain this to me during lunch? (And then write a nice Wiki entry about it afterwards?) ;-)

[ChaelKruip]

The documentation for profitability should improve but I don't think this is deploy critical. Replacing milestone with 'Deploy January 2013'

[ChaelKruip]

Assigning @Richard-Deuchler to analyse this example and possibly use it in the wiki.

[Richard-Deuchler]

Explanation of Step7:

The electricity price can currently only be set to the next inactive producer that would potentially be available. See also https://github.com/quintel/merit/issues/65

Taking out the most expensive producer in this issue's example, has a funny consequence on the second last producer:

When all "Coal Plants for District Heat" is removed, the "Pulverized coal power plants" suddenly become very profitable. This is not due to fixed thresholds of 'profitable' and 'conditionally profitable'. The profit itself increases dramatically. When "Coal for district heat" is available but not running, the "Pulverized coal plant" can only ask the price = marginal_cost("Coal for district heat plant"). When the "Coal for district heat" is taken out of the scenario, the "Pulverized coal plant" can suddenly ask the maximum price. In consequence, it has much higher revenues.

There is also a maximum price ticket, see https://github.com/quintel/merit/issues/66

[wmeyers]

And Maximum Price == a non-existent plant in the ETM right?

So it this a bug or a feature?

[Richard-Deuchler]

In principle, I would say its a feature. However, we have to revise the mechanism that sets the maximum price.

Closing and directing to https://github.com/quintel/merit/issues/66