Tuesday, October 28, 2014

Cost of solar power (45)

I was born, raised and educated in Western Australia and still retain a soft spot for the huge state despite having lived elsewhere for 41 years.  So it’s a pleasure to write a feel-good story about a new PV installation at the South Boulder Wastewater Treatment Plant, 600 km inland from the WA state capital Perth.

The mayor of the City of Kalgoorlie-Boulder, Ron Yuryevich, says the installation
is the largest of the four solar PV installations undertaken by the City of Kalgoorlie-Boulder in the past two years and is another example of the City’s commitment to long term sustainability”.
Power from the 150 kW ground mounted installation will be used in the City’s waste water treatment plant.  100% of the waste water is re-used for watering of parks and sporting facilities, which is very useful since Kalgoorlie-Boulder has a semi-arid environment.  The system is estimated to provide electricity savings of $60,000 per year and also to provide CO2 abatement of 230 tonnes per year.

In technical terms, the system has 500 Suntech panels (each of 300 W), two 75 kW Fronius inverters and a Schletter racking system.  EcoGeneration reports that the cost of the system is $595,000 (including 10% goods and services tax).  The system was commissioned in August 2014.

As for the annual output of the system, the City of Kalgoorlie-Boulder kindly informed me that their projections were 260-270 MWh/yr.  Let’s take 265 MWh/yr, which corresponds to a Capacity Factor of (265 × 1000) / (150 × 24 × 365) = 0.20, a useful benchmark figure for future reference.

We can now proceed to analyse the LCOE 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 Kalgoorlie-Boulder project are as follows:

Cost per peak Watt              AUD 4.0/Wp
LCOE                                     AUD 256/MWh

The components of the LCOE are:
Capital           {0.094 × AUD 595,000}/{265 MWhr} = AUD 211/MWhr
O&M              {0.020 × AUD 595,000}/{265 MWhr} = AUD 45/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, PV, July 2013)
(41)      USD 125 (Cerro Dominador, CST, mid 2017)
(42)      USD 190 (La Paz, PV, September 2013)
(43)      USD 152 (Austin Energy, PV, 2016)
(44)      AUD 304 (Weipa, PV, January 2015)
(45)      AUD 256 (Kalgoorlie-Boulder, PV, August 2014)


You can compare results with my LCOE graphic.

For international comparisons, the LCOE should really be adjusted for the effect of the Australian goods and services tax.  That would reduce the estimates by 9.09%, giving AUD 233/MWh.  The LCOE is slightly high compared to recent international installations, but that reflects the fact that Australia is a high-cost place, even in spite of recent falls in the Aussie dollar.  Also Kalgoorlie-Boulder is a remote location with significant transport costs for hardware.

Tuesday, October 21, 2014

Cost of storage (2013 Sandia report)

We hear every day that the cost of storage is falling rapidly, with obvious implications for the prospects of renewable power generation.  I accept that most of these statements are made in good faith, but some are clearly optimistic.  Where can one find objective expert information about the cost of storage?

I was pleased to read a recent report (PDF, 12 MB) [1] from the Sandia National Laboratories that gives detailed information about the costs of various forms of storage.  The Sandia Laboratories were originally formed for nuclear research and still have major involvement with nuclear weapons, but they also undertake other forms of research, including energy and climate.  I would say Sandia has exceptionally high credibility.

The Sandia report is dated July 2013.  The authors first describe various uses of storage in the electricity system:
  • bulk energy services (energy time-shift, supply capacity)
  • ancillary services (regulation, spinning reserve, voltage support, black start, load following, frequency response)
  • transmission infrastructure services (upgrade deferral, congestion relief)
  • distribution infrastructure services (upgrade deferral)
  • customer energy management services (power quality, power reliability, retail energy time-shift, demand charge management)

They then survey the actual cost of installed systems.  In their words:
“More than 50 battery original equipment manufacturers (OEMs), power electronics system providers, and system integrators were surveyed and asked to provide performance, cost, and O&M data for energy systems they could offer for various uses of storage.”

Although some of the data comes from 2010 and 2011, all costs are expressed in 2012 USD.  The comprehensive cost estimates include:

  • energy storage system (equipment, installation, enclosures)
  • owner interconnection (equipment, installation, enclosures)
  • packing and shipping
  • utility connection (equipment, installation)
  • Balance of Plant costs (civil engineering only)
  • general contractor facilities
  • engineering fees
  • project contingency (@ 0-15% of install)
  • process contingency (@ 0-15% of battery)
The Sandia report thus gives a snapshot of storage costs in the U.S., as best as could be done in mid-2013.  Different metrics are provided such as round trip efficiency, installed cost in $/kW or $/kWh, and LCOE in $/MWh.

The figure below was prepared from data sheets in Appendix B of the report.  It shows the initial installed capital cost in $/kWh for 19 different types of storage installations.  The technologies do not include thermal storage of energy as in Concentrated Solar Thermal installations.  I have also omitted results for flywheel storage, as this is so expensive as to be off-the-scale in the figure.

Initial capital cost for storage systems (2012 USD / kWh).  Categories described below.

The categories are:

1          greenfield pumped hydro (bulk storage)
2          compressed air energy storage (bulk storage)
3          Na-S (bulk storage, utility T&D)
4          Na-Ni-Cl (bulk storage, utility T&D, commercial and industrial)
5          Va-redox (bulk storage, utility T&D, commercial and industrial)
6          Fe-Cr (bulk storage, utility T&D, commercial and industrial)
7          Zn-Br (bulk storage, frequency regulation, utility T&D grid support)
8          Zn-Br (distributed storage, commercial and industrial)
9          Zn-Br (small residential)
10        Zn-air (bulk storage, utility T&D, commercial and industrial)
11        advanced Pb-acid (bulk storage)
12        advanced Pb-acid (frequency regulation)
13        advanced Pb-acid (utility T&D)
14        advanced Pb-acid (distributed storage)
15        advanced Pb-acid (commercial and industrial)
16        Li-ion (frequency regulation, renewables)
17        Li-ion (utility T&D grid support)
18        Li-ion (distributed storage)
19        Li-ion (commercial and industrial)

It is important to note that project lifetimes differ for the various technologies – it’s 60 years for pumped hydro, 40 years for compressed air energy storage and 15 years for all the battery technologies.

The initial capital costs for pumped hydro (Category 1) and compressed air energy storage (Category 2) are very good.  (Incidentally other energy storage metrics, particularly Energy Stored on Energy Invested, are also very good for pumped hydro and compressed air energy storage.)  Category 6 (Fe-Cr technology) has good results for installations dating back to 2011.  Results for Category 10 (Zn-air technology) seem good, but the report notes these are for systems that might be built in the future.

Lead-acid systems (Categories 11-15) were still cheaper than Li-ion systems (Categories 16-19) at the time the report was completed.  The flow batteries (Categories 5 and 7-9) give mixed results, which one imagines will be improved with further development.


According to the Sandia report, battery storage costs are still quite high when all costs and the project lifetimes (15 years) are taken into account.  Battery technology is clearly developing quickly, and I look forward to follow-up reports from Sandia or other sources.

Anthony Kitchener is thanked for mentioning this report to me.


[1] A.A. Akhil et al., “DOE/EPRI 2013 Electricity Storage Handbook in Collaboration with NRECA”, Sandia Report SAND2013-5131 (July 2013).