Monday, May 16, 2011

Cost of solar power (9)

It’s a funny world!  Or it would be funny if things weren’t so serious.

Here in Australia, the minority government is struggling to introduce a Carbon tax.  The conservative opposition is going ballistic, whipped along by the right-wing commentariat in newspapers, TV and especially radio.  Public support for the science behind anthropogenic global warming is falling and the AGW deniers seem to be gaining strength.

But things are not necessarily what they seem.  Over the weekend, I attended a launch for the book Climate Change Denial by Haydn Washington and John Cook.  The event was packed to the rafters, mainly with an older audience who looked so prosperous that I would have thought that a majority of them were normally conservative voters.  (Incidentally, John Cook is the founder of the excellent web site http://www.blogger.com/www.skepticalscience.com.) 

In fact, some conservative governments are taking action to lower Carbon emissions.  In the United Kingdom, the coalition government is driving the economy towards a future that is lower in Carbon, albeit with some setbacks along the way.  As reported on 10 May 2011 by Cambridge Econometrics:

“on existing policies including those inherited, endorsed and shortly to be put into effect by the Coalition government, the UK is set to miss the carbon budget targets narrowly in the first two budget periods (2008-12 and 2013-17), but by a wider margin in the third (2018-22)”

“The decline in UK's carbon emissions is set to accelerate after 2020 as power generation makes good progress towards de-carbonisation”.

In Germany, the conservative government has reacted quickly and strongly to the nuclear disaster in Japan, as described in an article No Nukes, No Problem? Germany's Race for a Renewable Future by Arne Jungjohann and Wilson Rickerson, Renewable Energy World, 13 May 2011:

“In advance of the phase out revision, Chancellor Merkel met with the governors of the 16 German states in April of this year and outlined a plan to accelerate Germany’s transition from fossil fuel and nuclear power to renewable energy.  This is a remarkable development because Germany already has one of the fastest growing renewable energy markets in the world.

During the past decade, Germany has fundamentally transformed the way it produces electricity: from 2000 to 2010, Germany increased its share of renewable electricity from 5% to 17%.  The country has consistently met its legislated targets ahead of schedule and appears poised to outdo itself again in the next few years.  The previous target of 30% renewable electricity by 2020 has recently been updated by Germany’s official National Renewable Energy Action Plan (NREAP).  The NREAP reveals that the country expects to actually generate 38% of its electricity from renewables by 2020.”

Such reports on progress towards de-carbonisation get very little traction in the Australian media.  My conclusion is that the public debate in Australia is framed and dominated by vested interests in media, mining, fossil fuels (coal, gas) and power generation.

But, let me come to the topic of today’s post – the cost of power generation from the Ibersol solar thermal power station.  The project leader, Solar Millenium AG, reported on 21 March 2011:

“Die 50 Megawatt Anlage ist das vierte von Solar Millennium in Spanien entwickelte Parabolrinnen-Kraftwerk und nahezu baugleich mit den Projekten Andasol 1-3 in Andalusien, die ebenfalls von der Solar Millennium Gruppe entwickelt wurden.  Die Extremadura ist mit einer jährlichen Direktstrahlung von rund 2.080 Kilowattstunden (kWh) pro Quadratmeter ein ausgezeichneter Standort für Solarenergie.  Laut Prognose auf Basis meteorologisch erhobener Daten soll das Parabolrinnen-Kraftwerk rund 170 Millionen kWh Strom produzieren – … und dabei im Vergleich zu modernen Steinkohlekraftwerken insgesamt rund 150.000 Tonnen Kohlendioxid pro Jahr einsparen.

Dank eines thermischen Speichers wird das Kraftwerk Solarstrom auch nach Sonnenuntergang planbar und zuverlässig bereitstellen.”

Private investors can participate in the project, as Solar Millenium describes:

“Auch Privatanleger können über einen geschlossenen Fonds von den Einnahmen dieses solarthermischen Kraftwerks profitieren.  Mit dem Vertrieb des Fonds hat Solar Millennium federführend das Tochterunternehmen Solar Millennium Invest AG beauftragt.”

There’s a long discussion on Ariva.de about the merits of such an investment.  Buried in that discussion is a comment by oecorentner, post #3225, about the cost of the project:

“ich habe nochmal nachgeschaut, Ibersol kostet 300 Mio €, soll 170 GW/a bringen bei 0,25 €/kwh = 250 €/MW =250000€/GW ist das ein Rohertrag von 42,50 Mio €/a = 14 % brutto.”

So, finally we have the information we need.  Ibersol is almost identical to the earlier Andasol plants, that is the sun’s energy is collected by parabolic troughs, stored in molten salt and drives a Rankine-cycle steam generator.  The plant will produce 50 MW peak and 170 GWhr/yr, save emissions of 150,000 t CO2, and will cost EUR 300 million.

I now evaluate the Levelised Electricity Cost (LEC) using my customary 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), which means that the required rate of capital return is 9.4%,
          all projects have the same annual maintenance and operating costs (3% of the total project cost), and
          government subsidies are neglected.

The results are:

Cost per peak Watt EUR 6.00/Wp
LEC                            EUR 218/MWhr

The components of the LEC are:
Capital           {0.094× EUR 300×106}/{170×103 MWhr} = EUR 166/MWhr
O&M              {0.030× EUR 300×106}/{170×103 MWhr} = EUR 53/MWhr

The LEC is slightly more than that for Andasol 1, as given in my post “Cost of solar power (3)” (28 January 2011), because the annual output is slightly less.  Back to oecorentner’s comment and the theme of Ariva.de, at EUR 250/MWhr, I predict an annual profit for the project of EUR (250-218) × 170000 = EUR 5.44 million.  That would not be sufficient to sign up investors into a EUR 300 million project, so I suspect my LEC is a little high.  My assumptions are of course only used for comparisons between projects, and taxation implications have not been taken into account.

For Ibersol, the cost per tonne of CO2 emissions reduced is {0.094 + 0.03} × EUR 300 million/150000 tonnes = EUR 248 / tonne.

To conclude, here are LEC figures for all projects I’ve investigated:

Cost of solar power (2): AUD 199/MWhr (Nyngan, Australia, PV)
Cost of solar power (3): EUR 547/MWhr (Olmedilla, Spain, PV)
Cost of solar power (3): EUR 205/MWhr (Andasol I, Spain, trough)
Cost of solar power (4): AUD 257/MWhr (Greenough, Australia, PV)
Cost of solar power (5): AUD 432/MWhr (Whyalla, Australia, dish)
Cost of solar power (6): USD 177/MWhr (Lazio, Italy, PV)
Cost of solar power (7): AUD 295/MWhr (Kogan Creek, Australia, CLFR pre-heat)
Cost of solar power (8): USD 248/MWhr (New Mexico, CdTe thin film PV)
Cost of solar power (9): EUR 218/MWhr (Ibersol, Spain, trough)

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