Tuesday, November 27, 2012

Cost of solar power (32)

Today I am going to analyse the Levelised Cost of Electricity (LCOE) for the Shams plant in Abu Dhabi.  This plant, being developed by a heavyweight consortium (60% Masdar, 20% Abengoa, 20% Total), is due for completion at the end of 2012.

The proponents of this project are both realistic and proud of their achievements.  From the company website:

“With per-capita greenhouse gas emissions among the highest in the world, Abu Dhabi has recognized the need to diversify its economy and reduce its carbon footprint.

Masdar, the multi-faceted renewable energy and sustainability company, wholly owned by the Mubadala Development Company PJSC, was established to ensure energy security through the creation of a diverse mix of renewable and clean energy sources.”

From the factsheet for the project, nearly all the necessary facts about the plant are known:
·         100 MW nameplate capacity
·         2.5 km^2 site  120 km south-west of Abu Dhabi, 23.5 degrees North latitude
·         258,048 parabolic trough mirrors, steam Rankine-cycle turbine, no storage capacity mentioned
·         cost USD 600 million
·         displaces emissions of 175,000 tonnes CO2 annually
·         provides power for 20,000 homes
Sadly, however, the annual output in MWhrs electricity is not given, so estimates will have to suffice.  (I’ll update this post should additional information come to hand.)
If Abu Dhabi’s power is generated from natural gas at an emissions intensity of 670 kg/MWhr, then 175,000 tons CO2 = 177,800 tonnes CO2 would result from a generation of 177,800/0.670 = 265,373 MWhr.
If Abu Dhabi’s power is generated from oil at an emissions intensity of 800 kg/MWhr, then the annual power output would be 177,800/0.800 = 222,250 MWhr

Another way to estimate the annual output is from an assumed Capacity Factor.  Suppose the Capacity Factor is 0.22, which would seem appropriate for a sunny desert location.  Then the annual output would be 100 × 365 × 24 × 0.22 = 192,700 MWhr.

Well, that’s all I have to go on, so let me make a nice round estimate of 200,000 MWhr per year, in the middle of the three estimates above.  I should note that I have previously had to estimate annual power outputs in similar ways; see Cost of solar power (28) for an example.

I now 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 Shams are as follows:

Cost per peak Watt              USD 6/Wp
LCOE                                     USD 342/MWhr

The components of the LCOE are:

Capital           {0.094 × USD 600×10^6}/{200000 MWhr} = USD 282/MWhr
O&M              {0.020 × USD 600×10^6}/{200000 MWhr} = USD 60/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)
(32)      USD 342 (Shams, Abu Dhabi, trough, to open early 2013)


The LCOE for the Shams project is around 50% higher than that for recent big US-based projects such as Ivanpah (number 10 above) and Crescent Dunes (number 18 above), both solar thermal projects.  I expect construction in Abu Dhabi would not be cheap, especially since major components would need to be shipped in from distant locations.

I acknowledge the uncertainty in my estimate for the annual power output, and I close with a plea to those who write the Press Releases and web sites: when describing your lovely new project, please provide an estimate of the annual power output in a precise way, namely MWhr/yr, not in CO2 displaced, cars removed from roads, or homes that are powered.

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