Thursday, March 29, 2012

Cost of solar power (20)

As an inventor, I’m always interested to hear about new ways to solve old problems, so I was pleased to read recently about a small company in Switzerland, namely Airlight Energy, ALE.

From their web site, ALE

“is a private Swiss company that supplies proprietary technology for large-scale production of electricity using solar power and for energy storage”. 

ALE is active in both Concentrated Solar Thermal (CST) and Concentrated Photovoltaics (CPV), and they are looking to store energy in pebble beds or caverns, respectively by thermal storage and compressed air storage.

Their CST concepts are interesting, especially a one-axis solar concentrator that is built out of flexible fabric mounted on a concrete frame.  Rather than me trying to describe the concept, it’s best to obtain the details directly from their web site.  The essence of course is to collect the sun’s heat at a high temperature and as cheaply as possible.  They think they have the best combination of technologies for the task.  The thermal energy is then converted to electrical energy with a Rankine-cycle steam turbine.

How will this work out in practice?  Well, it turns out that ALE is building a modest plant in Morocco, which they describe as follows:

“Airlight Energy will build its first CSP solar park in Ait Baha in Morocco.  From September 2012, the plant will supply green energy to the cement factory of the Italcementi Group.  By installing three solar modules, combined with the existing system for recovering residual heat in the cement factory, an electric power of 150 kW will be generated continuously, 24 hours a day.  The project, which involves an investment of 2.7 million Euros, will produce a saving of around 800 tonnes of CO2 every year.”

That’s enough for me to make an estimate of their Levelised Electricity Cost of Electricity (LCOE).

First I need to calculate the annual output, which, assuming a Capacity Factor of 97% after allowing for maintenance, will be 0.97*150 kW*365*24 hours/yr = 1,274,580 kWhr/yr = 1,275 MWhr/yr.

I now evaluate the LCOE 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 LCOE 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 in posts during 2011.

The results are:

Cost per peak Watt              EUR 18/Wp
LCOE                                     EUR 241/MWhr

The components of the LCOE are:
Capital           {0.094 × EUR 2.70 × 10^6}/{1,275 MWhr} = EUR 199/MWhr
O&M              {0.020 × EUR 2.7 × 10^6}/{1,275 MWhr} = EUR 42/MWhr

By way of comparison, LCOE 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 in my index of posts 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)
(19)      AUD 316 (University of Queensland, fixed PV, 2011)
(20)      EUR 241 (Ait Baha, Morocco, 2012)

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

I calculate the cost of CO2 abatement as (1,275 MWhr/yr) * (EUR 241 / MWhr) / (800 t/yr) = EUR 384/t.

The cost per peak Watt at Ait Baha is very high, but that is to be expected with a system that operates 24/7 with energy storage.  For LCOE comparisons, the nearest European equivalent would be Gemasolar, for which the LCOE is 24% higher.

To conclude, these figures must be interpreted with caution since ALE is using “the existing system for recovering residual heat in the cement factory”.  It’s not clear whether all the required heat comes from the solar collectors or whether some comes from the cement kilns.

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