Friday, February 28, 2014

LCOE graphic for solar power


In my last post, I promised I’d update my graphic for the Levelised Cost of Electricity (LCOE).  See below (click for a larger image).  Red denotes solar thermal, blue denotes PV.  Open circles denotes projects that have been announced but not completed to my knowledge.  Filled-in circles denote completed projects.

The LCOE is expressed in US dollars at today’s exchange rates (1 March 2014) with currencies depreciated/appreciated by 1.0175 per annum for the baseline date of 1 January 2015.

I need to sound a note of caution in interpreting this graphic.  When projects are announced, the project price is also announced, and that’s the information I’ve used.  If the project is a small one, then it doesn’t matter much that the opening date for the project is different to the date at which the price is announced.  In some cases, however, the project will take a long time to complete, so it’s inconsistent to use the announced price for the project.  An example is Cerro Dominador, announced in February 2014 and not due to open until mid-2017.  The announced price is in 2014 dollars, whereas the datum on the graphic has been plotted as if the price is in deflated 2017 dollars.  So the results for Cerro Dominador look a bit better than they actually are.

Don’t allow these subtleties to obscure the overall trend, however, which is that solar power is obviously getting cheaper, both for solar thermal and for PV.


Wednesday, February 26, 2014

Cost of solar power (42)


Today I’ll run the numbers for a recently announced PV plant in La Paz, Mexico.  Stories on the plant are available here (RenewEconomy) and here (Thomson Reuters).

La Paz is the state capital of Baja California Sur and is situated on La Paz Bay at the southern end of the Baja California peninsula.  La Paz is said to be a beautiful town, with tourism playing a major part in the regional economy.

Thomson Reuters says La Paz “suffers from the pollution pumped out by the aging Punta Prieta thermoelectric plant, which uses some of the dirtiest petroleum products on earth: a mix of cheap, low-grade fuel oil and expensive high-sulfur diesel.” 

This is clearly a case that’s crying out for installation of clean solar energy. 

Thomson Reuters goes on to say that “Mexico’s energy ministry has set a target for 35 percent of the country’s energy output to come from clean sources by 2024.”  


(For international readers, I point out that Australia has a target for 41,000 TWh of its electricity generation to come from renewable sources by 2020.  When announced a few years back, it was equivalent to 20% of the national production; now with declining demand it will probably be about 25% of the national production in 2020.  It is widely believed that this target will be revised downwards in a current review by the federal government.)

Aura Solar I is Mexico’s first major installation and began operation in September 2013.  The peak output from the 100 Ha site will be 30 MW.  The project involves 132,000 solar panels from Suntech and has a total cost of USD 100 million.

So we know the cost and the peak output.  What about the annual production?  As is often the case, this figure is not readily available, so I’ll estimate it in two ways.

Thomson Reuters say the plant will involve CO2 emissions savings of 60,000 t per year.  At an emissions intensity of 0.9 t per MWhr, I make that 60,000/0.9 = 66,667 MWh per year. Alternatively we can estimate a reasonable capacity factor for fixed panels at this excellent site, say 22%, which gives annual output of 24 × 365 × 30 × 0.22 = 57,816 MWh per year.  As is usually the case, the two estimates don’t agree exactly, so I’ll use the nice round number of 60,000 MWh per year.

I’ll analyse the Levelised Cost of Electricity (LCOE) for the La Paz project 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 La Paz are as follows:


Cost per peak Watt              USD 3.33/Wp
LCOE                                     USD 190/MWh


The components of the LCOE are:
Capital           {0.094 × USD 1 × 10^8 }/{60,000 MWhr} = USD 157/MWhr
O&M              {0.020 × USD 1 × 10^8 }/{60,000 MWhr} = USD 33/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)
(37)      USD 169 (Antelope Valley, CdTe Pv, end 2015)
(38)      AUD 137 (Mugga Lane, PV, mid 2014)
(39)      AUD 163 (Coree, fixed PV, Feb 2015)
(40)      AUD 298 (Ferngrove Winery, July 2013)
(41)      USD 125 (Cerro Dominador, mid 2017)
(42)      USD 190 (La Paz, PV, September 2013)





Conclusion

These LCOE numbers are good, but not the best in the world.  They are perhaps 5-10% higher than other recent big projects such as Antelope Valley (number 37) and Coree (number 39).

Over the weekend I’ll update my graphic that features all the above LCOE figures.






 


Sunday, February 16, 2014

Cost of tidal power (1)


Let’s do something different today!  Instead of analysing the cost of solar power, let’s look at the cost of tidal power. 

I’ll start with RenewEconomy’s story today about the Swansea Tidal Lagoon Project.  This was actually contributed to RenewEconomy by CleanTechnica.  The story points out the cost of the project will be $1.2 billion (presumably USD), with peak output 320 MW.

A press release from the proponents, Tidal Lagoon Power, gives more details.  This will be the largest tidal power project in the world, and will involve a 9.5 km sea wall to capture renewable energy from incoming and outgoing tides.  The output will be sufficient to power over 120,000 homes.

The press release goes on to list interesting facts including: 

Rated output                         240 MW
Annual output                      420 GWh
Design life                             120 years
Area within breakwater      11.5 km^2
Height of wall                      5-20 m
Peak tidal range                   10.5 m approx.
Average tidal range             4.1 m (neap), 8.5 m (spring)

I’ll analyse the Levelised Cost of Electricity (LCOE) for the Swansea Tidal Lagoon project using my standard assumptions (see below).  These might be unfair to the project given that the design life is 120 years, but I’d also point out that the lifetime of solar thermal projects will also be greater than the 25 years assumed below.  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 the Swansea Tidal Lagoon project are as follows:
Cost per peak Watt              USD 3.75/Wp (installed), USD 5.00/Wp (rated)
LCOE                                     USD 326/MWh

The components of the LCOE are:

Capital           {0.094 × USD 1.2 × 10^9 }/{420,000 MWhr} = USD 269/MWhr
O&M              {0.020 × USD 1.2 × 10^9 }/{420,000 MWhr} = USD 57/MWhr

Conclusion

These LCOE estimates are quite a lot more than (more than double!) the best LCOE figures for solar power, as you can check by looking at recent posts on this blog.  I haven’t studied wind power much, but I think the tidal LCOE would also be expensive in that regard.

I’m happy to concede that my basic assumptions need to be tweaked for tidal power, but my preliminary conclusion is that, for renewable energy in the British Isles, I think investment in wind would be preferred to investment in tidal power.