Monday, June 20, 2011

Cost of solar power (14)

On 15 June 2011, the first two winners in the Australia federal governments Solar Flagships program were announced.  In my last post, I described the program briefly and analysed the winning solar thermal syndicate, Solar Dawn.  Today I’ll consider the winning PV syndicate – the Moree Solar Farm.

There are three members in the consortium behind this project:  Fotowatio Renewable Ventures (majority owner, Spanish-based developer), BP Solar (manufacturer of solar cells) and Pacific Hydro (Australian-based renewable energy investor).

The Moree Solar Farm will have an output of 150 MW peak from 645,000 multi-crystalline solar panels with single-axis tracking.  The whole site will occupy approximately 1,200 Ha.  The reported cost of the project is AUD 923 million, with funding of AUD 306.5 from the Australian federal government and AUD 120 million from the New South Wales state government.  Final planning approval is imminent and construction is expected to start in mid 2012.

As with the Solar Dawn project, the consortium seems shy about disclosing the annual output.  But an educated guess can be made in two ways as follows.

(1)  Press releases for the project claim a CO2 emissions saving of 400,000 tonnes.  Now most Australian electricity is generated from coal, and I’d expect that to be the basis for CO2 emissions savings estimates by the consortium.  The amount of CO2 emitted per MWhr varies according to the nature of the coal and the thermodynamic efficiency of the plant.  Typical emission rates are shown here.   For black coal, modern super-critical plants might be as low as 800 kg CO2 per MWhr, whereas a typical value for older large-scale plants would be 1,000 kg CO2 per MWhr.  I expect the consortium would choose the latter estimate since that is most favourable to them.  Therefore the estimated annual output would be 400,000 t CO2 / 1 t CO2 per MWhr = 400,000 MWhr.

(2)  If I use the estimate in my last post that the Capacity Factor for solar projects is in the range 22-24% (let’s make that 23%), then the annual output will be 0.23 × 150 × 365 × 24 = 302,220 MWhr.

Of those two estimates, I think the first is the more reliable since the 400,000 t CO2 figure was widely used in all press reports and the CO2 intensity of coal-fired power stations is well known.  So, let’s assume the annual output is 400,000 MWhr = 400 GWhr.

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 6.15/Wp
LEC                            AUD 286/MWhr

The components of the LEC are:
Capital           {0.094× AUD 923 ×10^6}/{400,000 MWhr} = AUD 217/MWhr
O&M              {0.030× AUD 923 ×10^6}/{400,000 MWhr} = AUD 69/MWhr

By way of comparison, LEC figures (in appropriate currency per MWhr) 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 (Nyngan, Australia, PV)
(3)        EUR 547 (Olmedilla, Spain, PV)
(3)        EUR 205 (Andasol I, Spain, trough)
(4)        AUD 257 (Greenough, Australia, PV)
(5)        AUD 432 (Whyalla, Australia, dish)
(6)        USD 177 (Lazio, Italy, PV)
(7)        AUD 295 (Kogan Creek, Australia, CLFR pre-heat)
(8)        USD 248 (New Mexico, CdTe thin film PV)
(9)        EUR 218 (Ibersol, Spain, trough)
(10)      USD 251 (Ivanpah, California, tower)
(11)      CAD 445 (Stardale, Canada, PV)
(12)      USD 315 (Blythe, California, trough)
(13)      AUD 310 (Solar Dawn, Australia, CLFR)
(14)      AUD 286 (Moree Solar Farm, Australia, single-axis PV)

I can also estimate the cost of CO2 abatement for the Moree Solar Farm.  That is (0.094+0.030) × AUD 923 × 10^6 / 400,000 t CO2 = AUD 286 / t CO2.

My general conclusion is that the LEC for Solar Dawn and the Moree Solar Farm are approximately the same (subject to due caution associated with all the assumptions I’ve made).  Moreover, at current exchange rates, the LEC for both projects is broadly comparable with other large projects I have analysed recently, with Ivanpah currently having the best figures.

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