Thursday, June 30, 2011

Cost of solar power (15)

Today I’m going to analyse the Lieberose Solar Park in Germany. 

Firstly, however, I want to discuss yet another source of inexactitude in assessing the cost of solar power.  This issue is relevant to development of the solar power industry in general and to photovoltaics in particular.

To analyse the performance of a solar power station, three items of information are mandatory: the peak power output, the annual power output and the cost.  Now I can accept that the cost is not necessarily going to be publicly available.  Whether it is will depend on the way the financing has been put together and whether public money is involved.  If the cost is publicly known, then we can proceed to examine the annual power output.

Of course, what we are looking for here is a clear statement of the annual output to the grid measured in MWhr per year.  You’d think that would be simple, but not so.  In my experience, less than half of project press releases provide this information.  More usually the annual output is described in the form of tonnes of CO2 abatement per year.  But what does that mean?  In Australia where I am based, CO2 emissions from coal-fired electricity are typically estimated as 0.8 to 1.0 t CO2 per MWhr.  In Germany where there are many PV plants, I’m not sure of the basis for the estimate.  A detailed project report I have just obtained (see Lieberose below) gives 0.673 t CO2 per MWhr.  And in the USA, my analysis for a PV project in New Mexico gave 0.391 t CO2 per MWhr – see Cost of solar power (8).

Another issue relates to peak power.  Again you’d think this would be simple, but again it’s not, particularly for PV installations.  The key issue here is whether the output is measured in MW (DC) from the panels or in MW (AC) to the grid.  Tom Cheyney has written entertainingly and knowledgeably on this issue.  Here’s an extract from his article in which he comments on the Finsterwalde PV plant in Germany, rated at 82 MW:

“Using my usual quick-and-dirty formula for converting DC to AC for a PV system—MW (DC) divided by 1.2—the AC rating for the Finsterwalde trifecta comes to 68.3MW. Others use the following math: MW (DC) multiplied by 0.86, which in this case puts the German farm’s total at 70.52MW (AC).”

Cheyney goes on to explain that most European installations are measured in MW (DC), with the honourable exception of announcements from Sun Power.  On the other hand, most installations in North America are measured in MW (AC).  The above comments apply to utility-scale projects, not for domestic rooftop installations, in which DC ratings are generally quoted.

Having taken on board those cautionary comments, let’s look at the Lieberose project.  This installation, located in a former military training area approximately 100 km SE of Berlin in the German state of Brandenburg, went fully on-line in October 2009.  The area of the site is 162 Ha, the area of modules is approximately 500,000 m^2, the peak output is 52.8 MW (presumably DC as we have discussed above), the annual output is 52 GWhr (not sure whether this is AC or DC), the CO2 abated is 35,000 t per year, and the cost is approximately EUR 160 million.  In all, there are approximately 700,000 First Solar thin-film modules.  My understanding from the material I read is that the panels are fixed.

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 Real cost of coal-fired power, LEC – the accountant’s view and Cost of solar power (10).

The results are:

Cost per peak Watt EUR 3.03/Wp
LEC                            EUR 381/MWhr

The components of the LEC are:
Capital           {0.094× EUR 160 ×10^6}/{52,000 MWhr} = EUR 289/MWhr
O&M              {0.030× EUR 160 ×10^6}/{52,000 MWhr} = EUR 92/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 (Solar Oasis, 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)
(15)      EUR 381 (Lieberose, Germany, thin-film PV)

I can also estimate the cost of CO2 abatement for the Lieberose project.  That is (0.094+0.030) × EUR 160 × 10^6 / 35,000 t CO2 = EUR 567 / t CO2.  Quite expensive abatement!

Another metric I can calculate is the Capacity Factor, which is 52,000 / (52.8 × 24 × 365) = 0.11.  That number seems not unreasonable for a plant with fixed PV modules in a northerly location.

I’ve learned a lot in preparing this post, particularly from the article by Tom Cheyney.   I’d also comment that the Lieberose output is expensive, which I put down to the facts that the modules are fixed and the location is quite northerly.  Finally, I note that the project information gives the LEC as EUR 319/MWhr, which is rather less than what is predicted using my standard assumptions.

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