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Quantitative Finance · Begrippenlijst

Wat is Switching price?

Definition 7.7 Markets III: Commodities, Energy and Crypto · Hoofdstuk 7 — Emissions and Environmental Markets

The coal-to-gas switching price is the allowance price at which a given gas plant and a given coal plant have the same marginal cost:

PCO2⋆=Pgas/ηg−Pcoal/ηcec/ηc−eg/ηg.P^{\star}_{\mathrm{CO_2}} = \frac{P_{\mathrm{gas}}/\eta_g - P_{\mathrm{coal}}/\eta_c}{e_c/\eta_c - e_g/\eta_g}.
Clean spreads of the plants of against the allowance price, with power at 100\, EUR/ MWh. Coal’s spread falls 2.3 times as fast; the lines cross at the switching price. Data: the chapter’s tutorial.
Figure 7.3. Clean spreads of the plants of Example 7.8 against the allowance price, with power at 100 EUR/MWh100\,\mathrm{EUR}/\mathrm{MWh}. Coal’s spread falls 2.3 times as fast; the lines cross at the switching price. Data: the chapter’s tutorial.
The allowance price that makes the gas and coal plants of equal, as the gas price varies with coal at 12\, EUR/ MWh. Data: the chapter’s tutorial.
Figure 7.4. The allowance price that makes the gas and coal plants of Example 7.8 equal, as the gas price varies with coal at 12 EUR/MWh12\,\mathrm{EUR}/\mathrm{MWh}. Data: the chapter’s tutorial.

Voorbeelden

Example 7.8 (Where gas beats coal)

With gas at 35 EUR/MWh35\,\mathrm{EUR}/\mathrm{MWh} of fuel, coal at 12 12\,, efficiencies of 55% and 40%, and emission factors of 0.202 and 0.341 tonnes per MWh of fuel (illustrative round numbers), a MWh of electricity emits 0.367 t from gas and 0.853 t from coal, and the switching price is 69.32 EUR/t69.32\,\mathrm{EUR}/\mathrm{t}. At 70 EUR/t70\,\mathrm{EUR}/\mathrm{t} and power at 100 EUR/MWh100\,\mathrm{EUR}/\mathrm{MWh} the clean spark spread is 10.65 10.65\, and the clean dark spread 10.32 EUR/MWh10.32\,\mathrm{EUR}/\mathrm{MWh}: gas is just ahead.

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