Saturday, June 4, 2011

Cost of solar power (11)

Today will be a first for me – I’m going to analyse a PV project in Canada.  Australia and Canada are often regarded as similar countries with respect to their size, population and endowments of natural resources.  I’ll give a few comparisons to test that observation in a moment, but first let me comment on recent developments in Australia.

The minority Australian government is currently trying to introduce a carbon tax.  This is a very difficult task in a country like Australia where fossil fuels are abundant and powerful industry groups fight viciously to protect their way of doing business.  Details of the new tax have not been finalised, but discussions seem to focus on an expected price of around AUD 20-30 per tonne of CO2.  Naturally the Greens want a higher price, along with complementary measures to boost the renewables industry; industry groups want no price at all, or otherwise a price as low as possible.  The Opposition parties are running the mother of all scare campaigns; the right-wing radio shock-jocks are in über-ballistic denial mode.  It’s an ugly fight to the political death.

One way or the other, I expect the details to be finalised within a couple of months.  My prediction – the price will be AUD 26/tonne CO2, increasing at 3%/yr, with lots of compensation for low-income earners.  I think the political fight will continue all the way to the next federal election, probably in late 2012.

I’ll now provide a few comparisons on fossil fuel emissions and reserves for Australia, Canada and the USA.  Wikipedia reports that 2007 CO2 emissions (tonnes CO2 per capita) were:

USA 18.9; Australia 17.9; Canada 16.9

The 2009 BP Statistical Review of World Energy gives the following reserves/production ratios for USA, Canada and Australia:

Coal: USA 224; Canada^ 97; Australia 190
Oil: USA 12.4; Canada* 24.1; Australia 20.4
Natural Gas: USA 11.6; Canada 9.3; Australia 65.6

^ Canadian coal reserves are only 0.8% of the world’s total; coal production is low in Canada.
* Not including oil sands, which would multiply the Canadian R/P ratio by approximately 6.

The Stardale PV project is in southeast Ontario, Canada.  According to Solarbuzz, The peak output will be 33 MW from a total of 144,060 SolarWorld panels installed on a 121 Ha (300 acre) site.  The annual output is estimated to be 39 GWhr and the project cost is estimated at CAD 140 million.  Work began on the project in November 2010 and is expected to be complete in the first quarter of 2012.  As is often the case, financing for this project was not straightforward.  Solarbuzz reports it was essential that the PV panels were manufactured in the USA (actually Hillsboro, Or.) in order that the project could get support from the USA Export-Import Bank.

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.
(For further commentary on my LEC methodology, see posts on 2011-04-23, 2011-04-27 and 2011-05-21.)

The results are:

Cost per peak Watt CAD 4.24/Wp
LEC                            CAD 445/MWhr

The components of the LEC are:
Capital           {0.094× CAD 1.40×10^8}/{39×10^3 MWhr} = CAD 337/MWhr
O&M              {0.030× CAD 1.40×10^8}/{39×10^3 MWhr} = CAD 108/MWhr

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)
Cost of solar power (10): USD 251/MWhr (Ivanpah, California, tower)
Cost of solar power (11): CAD 445/MWhr (Stardale, Canada, PV)

On the above numbers, the LEC for the Stardale project is high.

1 comment:

  1. Great post with excellent idea! I appreciate your post. Thanks so much and let keep on sharing your stuffs keep it up.

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