Finance in the Green Transition
Stimulation of the aviation sectors' net zero transition whilst minimising stranded assets
The aviation sector is a complex market with high capital costs which may impact a transition to sustainable aviation through current technology lock-ins and concern about stranded value. New technologies, processes and policies are being developed to achieve Net Zero by 2050, however the possible pathways are highly uncertain. To achieve this goal a change in energy vectors is required at a pace potentially not seen at this scale previously. This thesis will seek to identify the policy levers with which to achieve the potentially conflicting goals of decarbonisation, avoidance of stranded assets, maintenance of industry profitability and the UK's leadership in the sector.
Supervisors:
- Dr. Mark Workman, Energy Futures Lab
- Dr. Anastasiya Ostronvnaya, Imperial College Business School
- Adam Morton, Aerospace Technology Institute
Optimization Model for Revenue Enhancement and Penalty Mitigation in Balancing Services Market
Using GAMS and Python, I modelled distributed energy resources with energy storage to provide ancillary services in yearly contracts. This involved classifying historical self-consumption and Short Term Operating Reserve (STOR) call data. I investigated a stochastic MINLP model that considers uncertainties in demand, STOR calls, storage capacity, and utilization prices. The framework I developed optimally selects the generation capacity to offer, maximizing profit while minimizing penalties. This project provided practical insights into the conventional power plant utilization of energy storage. With exclusive data from Huawei (UK), I have submitted the results for publication.
Supervisors:
- Ussama Rai, Department of Chemical Engineering
- Dr. Gbemi Oluleye, Grantham Institute
- Prof. Adam Hawkes, Centre for Process Systems Engineering
Monte Carlo-Based Investment Modeling for BESS with a Focus on Raw Material Prices
As the deployment of intermittent renewable energy sources increases, energy storage becomes paramount. Battery Energy Storage Systems (BESS) are expected to play a pivotal role in the energy storage market and reach 35 GWh of installed capacity in the UK alone by 2050. However, these necessary investments depend on their financial and economic viability. The project developed a comprehensive investment model for BESS. This model leverages a bottom-up cell cost approach linked to raw material prices and uses Monte Carlo simulations to assess investment profitability, considering several cost and performance uncertainties.
Supervisors:
- Dr. Jacqueline Edge, Department of Mechanical Engineering
- Jake Sowe, Adaptogen Capital
Hybrid PPA: Revenue Analysis and PPA Design for A Hybrid Solar and Storage Project in the UK
In a post-subsidy era, the co-location of solar with storage becomes essential to mitigate the increasing risk of devaluing renewable energy generation in the UK wholesale electricity market. Traditional financing mechanisms, while effective for standalone projects, fall short in addressing the complexities introduced by integrated solar and storage. In response, the market has seen the novel introduction of hybrid Power Purchase Agreements (PPAs). This research aims to develop an optimization model using Python to increase the price capturing factor, optimize the battery performance, and the profile shape of Hybrid PPA projects under various market conditions and risk allocation scenarios.
Supervisors:
- Dr. Fei Teng, Department of Electrical and Electronic Engineering
- Matthias Durand, TagEnergy
- David Teare, TagEnergy
- Louis Blateau, TagEnergy
Modelling offshore wind energy potential and price cannibalization in Western Europe
Price cannibalisation has become a major concern for renewable energy developers and policymakers, particularly in the North Sea, where most of Europe's offshore wind capacity is concentrated. As renewable penetration increases and projects transition to market-based revenue, the profitability of offshore wind assets faces significant risks. This thesis explores the potential of leveraging geographical diversity to mitigate the effects of price cannibalisation in Western Europe. By analysing the capture value of offshore wind farms in France, Germany, and the Netherlands, using both historical data and projections towards 2050, it provides guidance for strategic investment planning.
Supervisors:
- Prof. Adam Hawkes, Centre for Process Systems Engineering
- Dr. Malte Jansen, University of Sussex
- Ruslan Galimov, RWE
Strategizing a robust British nuclear programme for 2050
The UK recently set forth an ambitious nuclear programme to expand available capacity to 24 GW by 2050, yet the details of its implementation remain unclear. This project recognises and assesses the large uncertainties in the introduction of new nuclear power to design deployment strategies that perform well across various economic futures. The approach explores reliance on new technologies like Small Modular Reactors (SMRs), adequate government support, and revenue mechanisms. Given the pivotal role of interest rates in the competitiveness of nuclear projects, the discussion draws on effective finance and risk-sharing, quantifying the drawbacks from stakeholders’ overlapping interests.
Supervisors:
- Dr. Mark Workman, Energy Futures Lab
- Dr. Michael Bluck, Centre for Nuclear Engineering
Investing in Negative Emissions: The Policy Ecologies that will Attract Private Capital
Carbon Dioxide Removal (CDR) is an integral component of published net zero pathways. The UK’s legislated 2050 net zero target will require a CDR sector generating 60 to 100 Megatonnes of negative emissions annually, more than 100,000 times current capacity. The enormous scale-up of the CDR industry in the next 26 years will require mobilising billions of pounds of private capital in a nascent sector and a novel asset class. Combining exploratory modelling (exploring a large range of possible futures) and interviews with private capital investors, this research aims to find and assess the interventions that private capital investors require in order to deploy private capital in the space.
Supervisors:
- Dr. Mark Workman, Energy Futures Lab
- Dr. Aoife Brophy, University of Oxford
- Dr. Geoff Darch, Anglian Water