Monday, February 6, 2012

Cost of solar power (17)

It has been six months since I last blogged on the cost of solar power, during which time the press has been full of reports that the cost of PV modules has fallen sharply.  Does that translate into a falling cost of solar power at utility scale?  Let’s find out by analysing the Meuro Solar Park in Brandenburg, Germany.

To start, however, let’s remind ourselves about the concept of “learning rate” for PV, see figure below.
Figure 1:  PV module price [USD2011/W] against cumulative PV installations [MW], from Breyer & Gerlach, “Global Overview of Grid Parity Dynamics”, Proc 2011 Solar World Congress, Kassel.

The learning rate is the reduction in module cost per doubling of installed capacity, and, as Breyer & Gerlach show, this was 22.8% over the period 1976-2003 and 19.3% over 1976-2010.  In 2011, feed-in tariffs were wound back in various countries and production capacity increased, particularly in China.  The outcome, as reported in Renewable Energy Focus (Dec 2011), was a 40% fall in PV panel prices in 2011.  So it can be assumed we are still tracking at or better than the blue curve in Figure 1.

The Meuro PV Park is located in the German state of Brandenburg.  The 152 Ha project consists of four fields on the site of a former brown coal mine, not far from the Lieberose project described in Cost of solar power (15).  The 306,000 crystalline PV panels are from Canadian Solar, with installation complete in September 2011.  According to this blog, installation was completed in three months, an outstanding performance.  The peak output is 70 MW and the annual output is 70 GWhr.  According to most reports I read, the cost of the project is EUR 140 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 (2% 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).  Note that I am now using annual maintenance costs of 2% rather than 3% as previously.

The results are:

Cost per peak Watt             EUR 2.00/Wp
LEC                                        EUR 228/MWhr

The components of the LEC are:
Capital           {0.094× EUR 140 ×10^6}/{70,000 MWhr} = EUR 188/MWhr
O&M              {0.020× EUR 140 ×10^6}/{70,000 MWhr} = EUR 40/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 183 (Nyngan, Australia, PV)
(3)        EUR 503 (Olmedilla, Spain, PV, 2008)
(3)        EUR 188 (Andasol I, Spain, trough, 2009)
(4)        AUD 236 (Greenough, Australia, PV)
(5)        AUD 397 (Solar Oasis, Australia, dish, 2014?)
(6)        USD 163 (Lazio, Italy, PV)
(7)        AUD 271 (Kogan Creek, Australia, CLFR pre-heat, 2012?)
(8)        USD 228 (New Mexico, CdTe thin film PV, 2011)
(9)        EUR 200 (Ibersol, Spain, trough, 2011)
(10)      USD 231 (Ivanpah, California, tower, 2013?)
(11)      CAD 409 (Stardale, Canada, PV, 2012)
(12)      USD 290 (Blythe, California, trough, 2012?)
(13)      AUD 285 (Solar Dawn, Australia, CLFR, 2013?)
(14)      AUD 263 (Moree Solar Farm, Australia, single-axis PV, 2013?)
(15)      EUR 350 (Lieberose, Germany, thin-film PV, 2009)
(16)      EUR 300 (Gemasolar, Spain, tower, 2011)
(17)      EUR 228 (Meuro, Germany, crystalline PV, 2012)

[Note: all estimates made using 2% annual maintenance cost.]

The Capacity Factor for the Meuro PV park is 70,000 / (70 × 24 × 365) = 0.114, identical to that for the nearby Lieberose project, which is not a surprise.  Note however the big drop in LEC between Lieberose and Meuro over a three-year period.  The Meuro LEC is 21% more than for the Andasol solar thermal trough project, which admittedly is in a far sunnier location.

Details on other recent projects soon …



2 comments:

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