Monday, January 10, 2011

Cost of solar power (2)

The New South Wales government today approved the construction of a solar PV power station at Nyngan, about 600 km inland.  A decision to build the power station now depends on the success of an application for federal government funding under the Solar Flagships program.  The announcement contained sufficient details to allow an estimate of the cost per peak Watt and Levelised Energy Cost under my standard assumptions.

Project details:  The developer is Infigen and the PV cells will be provided by Suntech.  According to today’s details, the cells will be mounted on a fixed frame, storage is not mentioned, the peak power is 100 MW, the site area is 200 Ha, and the project cost is AUD 300 million.  A precise figure for annual power output was not mentioned, however claimed savings on CO2 emissions are 150,000 t per year, from which I calculate the annual power output to be 187 GWhr based on an emissions intensity of 0.8 million tonnes CO2 per TWhr.

Recall my standard assumptions used to analyse all projects:
·         there is no inflation,
·         taxation implications are neglected,
·         projects are funded entirely by debt,
·         all projects have the same interest rate (8%) and payback period (25 years), and
·         all projects have the same annual maintenance and operating costs (3% of the total project cost).
To those I should also add that government subsidies are also neglected.

For the Nyngan project, we therefore have

Cost per peak Watt     AUD 3.00 / Wp
LEC                            AUD 199 / MWhr

The components of the LEC are:                   
CAPEX           {0.094 × AUD 300×106} / {187×103 MWhr} = AUD 151 / MWhr
OPEX             {0.030 × AUD 300×106} / {187×103 MWhr} = AUD 48 / MWhr

Infigen would cite different figures to the above, which are what you get under the standard assumptions.

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