Wednesday, June 13, 2012

Cost of solar power (28)

I had intended that my next blog post would be on a major review of Concentrated Solar Power that appeared last week.  However, there was also a big announcement relating to the Australian Solar Flagships program, so let’s look at that first.

Two winners in the Flagships program were announced in June last year, and I analysed their Levelised Cost of Electricity (LCOE) here and here.  Since then, both successful bidders have struggled to complete their financial arrangements.  The Solar Dawn team has been given more time with their finances, but the Moree Solar Farm had to compete with others in a fresh application.

The outcome is that the PV project has been taken away from the Moree Solar Farm and awarded to a syndicate from AGL and First Solar.  From the AGL press release:

“AGL Energy Limited (AGL) has been selected by the Commonwealth Government as the successful proponent in the solar photovoltaic (PV) category of the Solar Flagships Program independent reassessment process.  AGL, together with First Solar (Australia) Pty Ltd (First Solar), will deliver large-scale solar PV power projects totalling 159 MW at two locations in New South Wales.

AGL will develop a 106 MW project at Nyngan and a 53 MW project at Broken Hill.  First Solar will provide engineering, procurement and construction services for both projects, using its advanced thin-film PV modules.”

The press release goes on to mention that the total project cost is approximately AUD 450 million, including AUD 129.7 million from the federal government and AUD 64.9 million from the NSW state government.

In response to my query, AGL has confirmed that the panels are fixed and that the 159 MW peak output is AC power to the grid.

When it comes to the annual output, the situation is not so clear.  The press release says the projects will provide enough power for 30,000 homes, with no mention of output in GWhr/yr.  In response to my e-mail query, AGL said the annual output would be around 365 GWhr/yr.

But that corresponds to a Capacity Factor of 365/(24*365*0.159) = 0.262, which seems too high for an installation with fixed panels.  By way of comparison, the Kagoshima facility in southern Japan has CF = 0.129, the NEXTDC facility in Melbourne has CF = 0.157, the GERO Solarpark in Germany has CF = 0.125, and the Kamberra project has CF = 0.172.  Why should this new project have CF = 0.262?

In his article on the Solar Flagships situation, Giles Parkinson at RenewEconomy also gives the AGL figures:  26% Capacity Factor at Nyngan, 27% at Broken Hill.

What to do?  I’m going to assume CF = 0.18 for the Nyngan/Broken Hill project.  (If fresh information comes to hand, I’ll update this post.)  So the annual output would be 0.18*24*365*0.159 = 251 GWhr/yr approximately.

I now evaluate the Levelised Cost of Electricity (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, Cost of solar power (10) and (especially) Yet more on LEC.  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.

The results are as follows:

Cost per peak Watt              AUD 2.83/Wp
LCOE                                     AUD 205/MWhr

The components of the LCOE are:
Capital           {0.094 × AUD 450×10^6}/{251000 MWhr} = AUD 169/MWhr
O&M              {0.020 × AUD 450×10^6}/{251000 MWhr} = AUD 36/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, 1-axis solar thermal, 2012)
(21)      EUR 227 (Shivajinagar Sakri, India, PV, 2012)
(22)      JPY 36,076 (Kagoshima, Kyushu, Japan, PV, start July 2012)
(23)      AUD 249 (NEXTDC, Port Melbourne, PV, Q2 2012)
(24)      USD 319 (Maryland Solar Farm, thin-film PV, Q4 2012)
(25)      EUR 207 (GERO Solarpark, Germany, PV, May 2012)
(26)      AUD 259 (Kamberra Winery, Australia, PV, June 2012)
(27)      EUR 105 (Calera y Chozas, PV, Q4 2012)
(28)      AUD 245 (Nyngan and Broken Hill, thin film PV, end 2014?)

Conclusion

On these estimates, the new PV project (LCOE AUD205/MWhr) in the Solar Flagships program is clearly superior to the now-abandoned Moree Solar Farm (LCOE AUD 263/MWhr).  Moreover the cost per peak watt has dropped from AUD 6.15/Wp for the Moree Solar Farm to AUD 2.83/Wp for the new project.

This provides confirmation about the substantial fall in PV prices over the past year.

If I had used the CF = 0.262 figure provided by AGL, the LCOE would have been AUD 141/MWhr, which I think is too good to be true.  One further estimate is given by Jack Curtis of First Solar, as quoted in Giles Parkinson’s article:

“Jack Curtis from First Solar says the AGL project translates roughly to $180/MWh without subsidies”.

First Solar would have a different methodology to mine for LCOE calculations, and I acknowledge the uncertainty in the Capacity Factor I have used.  As I said, I’ll update this post if fresh information becomes available.


Update (16 June 2015):  The Nyngan plant is now on-line and Broken Hill will be completed later this year.  See my post of 2015-06-16 for an update on these estimates.

3 comments:

  1. Solar Power is the only solution we can do on our ever increasing electricity bills. Solar Panels last upto 30 years and it's economically friendly and harmless. Go Solar Now! And lets make this world a better world to live in especially those in asia..

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  2. hi thanks for sharing such interesting facts and analysis on solar power. will be looking for more updates from you. i think its time we begin to think about our future because we will be out of petroleum and coal soon. besides solar power doesn't cause any pollution.so go green guys

    Photovoltaic Solar Panels

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