Wednesday, October 31, 2012

Cost of solar power (31)

As it happens, I attended an interesting conference in Fukuoka last week, for which I’d like to mention the web site: http://fmi2012.imi.kyushu-u.ac.jp/.  The conference was concerned with applications of mathematics in industry.

Fukuoka lies on the south-western Japanese island of Kyushu, so it was with interest on my return that I read a press release about a solar installation planned for Kyushu.  The first two paragraphs read:

Marubeni Corporation (Marubeni) has decided to launch a mega-solar power business by constructing a large scale solar power plant at the 105,000 square meters coastal industrial area of Oita No.6 owned by its subsidiary, Marubeni Ennex Corporation, Showa Denko K.K. and others. The total capacity amounts to 81.5MW and it is the largest power business at one single place in Japan.

Marubeni is to create a new special purpose company and start plant construction from November this year. The commissioning and start of the power plant are scheduled after March 2014. The expected annual power generation will be 87,000,000kWh, corresponding to the annual electricity consumption of 30,000 ordinary houses.

Moreover, Bloomberg reports the price: JPY 24 billion.

If the annual output is 87,000 MWhr, then the Capacity Factor is 87,000/(365×24×81.5) = 0.122.  That’s not a terrifically high CF value for an installation with approximate latitude 33°N.   I suspect that Kyushu has rather cloudy summers.  The technology to be applied at Oita wasn’t mentioned in any of the press releases I read, but I strongly suspect the project will have fixed PV panels.

I also have sufficient information to apply my customary assumptions to estimate the Levelised Cost of Electricity (LCOE) for the project.  The assumptions are:

          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 for Oita are as follows:

Cost per peak Watt              JPY 29.4 /Wp
LCOE                                     JPY 31,448/MWhr

The components of the LCOE are:

Capital           {0.094 × JPY 24×10^9}/{87000 MWhr} = JPY 25,931/MWhr
O&M              {0.020 × JPY 24×10^9}/{87000 MWhr} = JPY 5,517/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?)
(29)      AUD 342 (City of Sydney, multiple sites, PV, 2012)
(30)      AUD 281 (Uterne, PV, single-axis tracking, 2011)
(31)      JPY 31,448 (Oita, PV?, Japan, to open March 2014)

Conclusion

The LCOE for the Oita project is 13% less than that for the only other Japanese project I’ve analysed -  Kagoshima (also in Kyushu).  At current exchange rates, the LCOE is AUD 380/MWhr, USD 394/MWhr and EUR 304/MWhr.  The LCOE for Oita would seem to be about 25-30% more than for other large-scale projects recently announced.

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