Sunday, February 27, 2011

Cost of solar power (4)

For the past couple of weeks, I’ve been visiting Western Australia on family business.  Until I was 12 years old I lived in small country towns in WA, after which my family moved to the state capital, Perth, where I completed high school and university education.  I left WA in 1973 and only sporadically return, sometimes for work purposes but more often to strengthen family ties.

The south-west of WA is suffering under the combined effects of very low rainfall in 2010 and, just at the moment, hot dry winds associated with tropical cyclones off the Pilbara coast.  According to my reading, climate change will make the south-west of the state drier and hotter, not a nice long-term prospect.  The state government already uses desalination to help the water supply for the Perth metropolitan area, and I’d expect that further plants will have to be built.

International readers might be interested to know that WA is a big place with, for example, 3.64 times the land area of Texas and 77% that of India.  It is also in a strong economic boom due to its wealth of natural resources.  The iron ore and natural gas projects in the north of the state are very large and profitable, and many other minerals are mined including gold, bauxite, nickel, mineral sands and vanadium (without attempting a comprehensive list).

From the point of view of renewable resources, WA is absolutely blessed.  The sunshine resource is stupendously large, enough to power the entire planet, and there are also excellent wind resources along the southern coastline.  But (and there’s always a but), WA is hooked on fossil fuels and exploitation of mineral resources.  In the absence of a total change in the collective exploitative mentality, the state’s wonderful renewable resources will never be used on any significant scale.

So, with that preamble, today’s example of the cost of solar power just has to be from Western Australia.  As usual, I start with my standard assumptions:
·         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), and
·         government subsidies are neglected.

Greenough River Solar Farm (www.verveenergy.com.au)

According to the Sustainable Energy Association of Australia, “construction is expected to begin shortly and the project is expected to be completed by the end of 2011”.

This PV installation is planned near Geraldton in Western Australia.  Approximately 40,000 BP solar panels will be installed on 4,300 ‘tables’ that will follow the sun from east to west.  Other project details: site area 80 Ha, peak output 10 MW, annual output 28 GWhr, cost AUD 58 million. 

Cost per peak Watt     AUD 5.80/Wp
LEC                            AUD 257/MWhr

The components of the LEC are:
CAPEX           {0.094× AUD 58×106}/{28×103 MWhr} = AUD 195/MWhr
OPEX             {0.030× AUD 58×106}/{28×103 MWhr} = AUD 62/MWhr

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