Thursday, January 27, 2011

Cost of solar power (3)

 
A colleague referred me to a recent interesting article: “Are Solar Thermal Power Plants Doomed” by Michael Kanellos and Brett Prior.  This appeared in a web publication from Greentech Media, www.greentechmedia.com, 18 October 2010.  The thrust of the article is simple – PV costs are coming down faster than solar thermal costs, therefore PV will come to dominate the marketplace.

Other factors cited by the authors in favour of PV are (1) PV plants are more modular and can be built smaller than concentrated solar thermal (CST) plants, and (2) concentrated PV (CPV) technologies help reduce overall costs of PV plants even further.  On the other hand, the authors acknowledge that CST plants have better storage prospects (thus giving despatchable utitlity-scale power) and have inherently less spiky output as clouds momentarily pass overhead.  At the moment, however, they say these advantages are not valued by project developers.

On-line discussion of the article was valuable.  Useful comments were made by
Farid Bensebaa, author of a recent publication “Solar Based Large Scale Power Plants: what is the Best Option?” in Progress in Photovoltaics: Research and Applications (Aug 2010).  Conclusions highlighted were:
·         capital cost of CSP and PV are about the same;
·         O&M cost of CST is at least ten times higher than PV;
·         current CST requires large amount of water (a disadvantage in desert areas);
·         the cost advantage of PV is smaller under very high solar irradiation;
·         energy storage is proven and cheaper in the case of CST when compared to PV.
Not everyone in the discussions agreed with the comment about O&M costs.  There was also knowledgeable discussion about the relative lifetimes of PV and CST plants.

What do I think?  Well, cheap storage and despatchability have to be very important eventually, even if project developers don’t value them highly today.  I also put value on the option of hybrid firing of CST plants with biomass or even fossil fuels.  So, I wouldn’t write off CST just yet, and I’m sure the proponents of CST in its various forms (tower, trough, dish, Fresnel arrays) would agree with me.  Until I have better and undisputed information, I’m going to stick with my assumption that all annual O&M costs are 3% of capital costs.

On to today’s examples – Olmedilla and Andasol 1.

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.

Olmedilla (www.nobesol.com)

This Spanish PV installation was completed in September 2008 and has 270,000 Si panels.  Other project details: site area 285 Ha, peak output 60 MW, annual output 87.5 GWhr, cost EUR 384 million. 

Cost per peak Watt     EUR 6.40 / Wp
LEC                            EUR 547 / MWhr

The components of the LEC are:
CAPEX           {0.094 × EUR 384×106} / {87×103 MWhr} = EUR 415 / MWhr
OPEX             {0.030 × EUR 384×106} / {87×103 MWhr} = EUR 132 / MWhr

Comment: even if the O&M costs were zero, the LEC is still very high.


This project is based at 1,100 m altitude in southern Spain and came online in March 2009.  Solar energy is collected by parabolic trough collectors coupled to molten salt storage that provides for 7.5 hours operation.  Other project details: site area 51 Ha, peak output 50 MW, annual output 180 GWhr, cost EUR 300 million.

Cost per peak Watt     EUR 6.00 / Wp
LEC                            EUR 205 / MWhr

The components of the LEC are:
CAPEX           {0.094 × EUR 300×106} / {180×103 MWhr} = EUR 157 / MWhr
OPEX             {0.030 × EUR 300×106} / {180×103 MWhr} = EUR 50 / MWhr

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