Wednesday, February 15, 2012

Cost of solar power (18)

Today I shall analyse the cost of power from a utility-scale solar thermal power station.  It’s the Crescent Dunes project, located just northwest of Tonopah, Nevada in the USA.

From my vantage point in Sydney, Australia, it seems there is a thundering herd of utility-scale solar projects under construction in the USA, helped along by a loan guarantee program from the US Department of Energy.  A recent article in greentechsolar makes the case – almost USD 5 billion was guaranteed on the last day of the program alone (in September 2011), including to the Desert Sunlight (partial guarantee for USD 1.88 billion, 550 MW PV) and Antelope Valley (USD 680 million, 230 MW PV) projects.  In the last week of the program, loans were also guaranteed to Mesquite Solar 1 (USD 337 million, part of a 700 MW PV project) and Crescent Dunes (USD 737 million, 110 MW, solar thermal).

This blitzkrieg of financial and construction activity makes a mockery of negative articles about solar energy that appear frequently in our local mainstream media.

The Crescent Dunes project is being developed by Tonopah Solar Energy LLC, a wholly owned subsidiary of SolarReserve LLC.  The peak and annual power outputs are 110 MW and 504 GWhr.  The project is being built on a 640 Ha site and will have a 195 m central tower and 17,500 heliostats each of 62.4 m^2.  Energy will be stored in molten salt so that the project can deliver power for up to ten hours after dark.  The project is due for completion in 2013.

SolarReserve raised USD 140 million in venture capital in 2008 and the DOE loan guarantee is for USD 737 billion.  That’s a total of USD 877 million, whereas this site reports that the project will cost USD 900 million.  Let’s stick with the latter figure.

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             USD 8.18/Wp
LEC                                        USD 204/MWhr

The components of the LEC are:
Capital           {0.094 × USD 900 × 10^6}/{504,000 MWhr} = USD 168/MWhr
O&M              {0.020 × USD 900 × 10^6}/{504,000 MWhr} = USD 36/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)
(18)      USD 204 (Crescent Dunes, USA, tower, 2013)

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

The Capacity Factor for Crescent Dunes is 504,000 / (110 × 24 × 365) = 0.52, somewhat less than the 63% CF that I calculated for Gemasolar in Spain, which is a natural project for comparison.  At the current exchange rate USD 1 = EUR 0.76, the Crescent Dunes LEC is much less (almost half!) than that for Gemasolar.

It’s also of interest to compare Crescent Dunes with Ivanpah.  Both are under construction; both are heliostat-tower systems; Crescent Dunes has thermal storage whereas Ivanpah does not; both are Rankine cycle steam plants:  Ivanpah has air-cooled condensers whereas Crescent Dunes has a hybrid cooling system (mainly dry cooling, with some wet cooling in summer); and the LECs are USD 231/MWhr (Ivanpah) versus USD 204/MWhr (Crescent Dunes).

For my next Cost of Solar Power analysis, I’ll try to get some figures on Asian projects.

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