Sunday, June 19, 2011

Cost of solar power (13)

Over the weekend, the Australian federal government announced two winners under its Solar Flagships funding program.  This post contains an analysis of the Levelised Electricity Cost for the Solar Dawn project; my next post will investigate the other winner (Moree Solar Farm).

The Solar Flagships program, as originally announced in 2009 with AUD 1.5 billion funding, had the intention to support more than 1 GW of installed solar generation capacity in four separate projects in Australia, two solar thermal and two PV.   In the 2011 federal budget, funds available over the forward estimates period were reduced by AUD 250 million.  Even in reduced form, the program represented a very big pot of money and there was vigorous competition with 44 original applicants and a subsequent shortlist of eight.

The Solar Dawn project is a hybrid between solar thermal and gas, with the gas component restricted to 15% of the total output.  The project uses the Compact Linear Fresnel Reflector (CLFR) technology devised by David Mills at the University of Sydney and now under the control of the French multinational company Areva.  This technology was helped to full commercial status by venture capitalists in California.  Wikipedia summarises the history of the technology.

It is of interest that no tower technology (such as Ivanpah in California and Abengoa in Spain) made the solar thermal shortlist.  The CLFR technology also triumphed over applicants based on parabolic trough technologies.  Climate Spectator today published a very interesting interview with Anthony Wiseman, Areva’s Regional Director and General Manager of Areva Renewables, who discusses technicalities associated with the CLFR concept.  Here are some quotations from that interview:

“... the attractiveness of CLFR technology is that it’s direct steam generation, so it doesn’t require that balance of plant or heat exchanger equipment, it doesn’t have the environmental hazards of dealing with a thermal oil circuit and consequently it has a capital cost advantage.

... our temperatures are in excess of what is achievable by a parabolic trough plant. By producing super heated steam at such a temperature and pressure, we increase the efficiency …, which improves the project economics.”

To achieve consistency of power output, the Solar Dawn project opted in favour of a hybrid solar-gas system instead of thermal storage.  According to Wiseman in the Climate Spectator interview:

... we have a research and development group that continues to pursue storage solutions, but at the current day it’s not a commercial proposition.

“The plant will be able to independently operate on solar, or it will be able to independently operate on gas. The 15 per cent restriction is from the guidelines under the Solar Flagships Program related to the annual energy that was dispatched from the plant. It’s not an instantaneous calculation. It’s a yearly calculation.

... Solar thermal in general has a sort of 22, 24 per cent capacity factor.”

Overall, the project has 250 MW capacity provided through two 125 MW steam turbines.  The site area will be 450 Ha.  The annual power output seems to be a secret, but it can be estimated from Wiseman’s comment above that the Capacity Factor due to solar would be in the range 22-24%.  If we take 23%, then the annual power output would be 0.23 × 250 × 365 × 24 = 503,700 MWhr = 503.7 GWhr.  The cost of the project has not been finalised, but the figure mentioned publicly is AUD 1.2 billion, of which AUD 464 million will come from the Solar Flagships program and AUD 75 million from the Queensland government. 

Note added: 23 July 2011

A month ago, I sent an e-mail enquiry to Solar Dawn asking for their estimate of power produced.  I received an answer yesterday.  The annual output is estimated to be 480 GWhr, and I have updated the calculations accordingly.

The Solar Dawn project is near Chinchilla in Queensland, and is adjacent to and will be operated by the same parties as the Kogan Creek project – see Cost of solar power (7).

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 AUD 4.80/Wp
LEC                            AUD 310/MWhr

The components of the LEC are:
Capital           {0.094× AUD 1.2 ×10^9}/{480000 MWhr} = AUD 235/MWhr
O&M              {0.030× AUD 1.2 ×10^9}/{480000 MWhr} = AUD 75/MWhr

By way of comparison, LEC figures for all projects I’ve investigated are given below.  The number in brackets is the reference to the blog post, all of which appear with the title “Cost of solar power ([number])”:

(2): AUD 199/MWhr (Nyngan, Australia, PV)
(3): EUR 547/MWhr (Olmedilla, Spain, PV)
(3): EUR 205/MWhr (Andasol I, Spain, trough)
(4): AUD 257/MWhr (Greenough, Australia, PV)
(5): AUD 432/MWhr (Whyalla, Australia, dish)
(6): USD 177/MWhr (Lazio, Italy, PV)
(7): AUD 295/MWhr (Kogan Creek, Australia, CLFR pre-heat)
(8): USD 248/MWhr (New Mexico, CdTe thin film PV)
(9): EUR 218/MWhr (Ibersol, Spain, trough)
(10): USD 251/MWhr (Ivanpah, California, tower)
(11): CAD 445/MWhr (Stardale, Canada, PV)
(12): USD 315/MWhr (Blythe, California, trough)
(13): AUD 310/MWhr (Solar Dawn, Queensland, CLFR)

At the current approximate conversion rate of AUD 1 = USD 0.95, the LEC for Solar Dawn is comparable to that for Blythe (Cost of solar power (12)) and around 25% more than that for Ivanpah (Cost of solar power (10)).   Note however that the Aussie dollar is volatile and was around USD 0.60 as little as three years ago. 

Also, the estimated LEC for Solar Dawn will be on the high side since the capital cost includes hardware for gas-fired steam generation, whereas the output is only for the solar component.

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