Wednesday, June 12, 2013

Cost of solar power (36)

In today’s post, I’ll analyse the Levelised Cost of Electricity (LCOE) for a recently-announced PV installation in southern Georgia.  The massive (1 GWp) project is primarily directed towards Turkey and European markets (via Turkish partners).  As part of the project, there is also the intention to build a 1,300 km HVDC connector to the European SuperGrid.

Details of the project are available at the web site of the developers, Ergon Solair Eurasia LLP.   The plan is to use Chinese and Taiwanese PV components (a portion assembled locally), electrical components and inverters from Germany and France, whilst the mounting system will be Italian.  The HVDC connector will be constructed in collaboration with Derinsu Offshore Survey and Engineering Company (Turkey), and will pass under the Black Sea.

Financial details about the project are available in a recent news release from Ergon Solair.  In brief, the PV power plant and the connector will each cost approximately USD 1.5 billion.  The expected annual output is 1,200-1,250 kWh/kWp.  If I take the mid-way value 1,225 kWh/kWp, then the annual output would be 1,225,000 MWh.

A completion date was not announced, although the web site says that first output of the PV fabrication plants is expected in H2 2013.  Let’s assume the PV component could be built by mid-2014.

We’ve all heard that the cost of PV power is falling rapidly.  So the burning question, now to be answered, is how this project compares with others that I have analysed in recent years?

The LCOE is analysed using my standard 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 for the South Georgia project are as follows:
Cost per peak Watt              USD 1.5/Wp
LCOE                                     USD 139/MWh
The components of the LCOE are:
Capital           {0.094 × USD 1.5×10^9}/{1.225×10^6 MWhr} = USD 115/MWhr
O&M              {0.020 × USD 1.5×10^9}/{1.225×10^6 MWhr} = USD 24/MWhr
By way of comparison, LCOE figures (in appropriate currency per MWh) 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 205 (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)
(34)      USD 272 (Daggett, California, designed 2010)
(35)      GBP 148 (Wymeswold, UK, PV, March 2013)
(36)      USD 139 (South Georgia, PV, June 2014)
Well, the LCOE for the southern Georgia plant is definitely impressive.  It is comparable to the figure for Calera y Chozas (ref 27, EUR 105), and far below other recent projects like GERO (ref 25, EUR 207), Nyngan (ref 28, AUD 205) and Crescent Dunes (ref 18, USD 204).

You can see the results in the graphic below (click for a larger image), which expresses costs in USD/MWh at today’s exchange rate.  The latest result is in the bottom right-hand corner.
(Currencies deflated at 1.75% per annum, baseline date is end 2014.  Red is for solar thermal, blue for PV.  Filled-in circles denote completed projects, non filled-in circles denote announced projects.)



No comments:

Post a Comment