Monday, December 28, 2015

Cost of solar power (59)


In January this year, I blogged about the 100 MW Amanecer PV project in the Atacama desert, Chile.  That project had an excellent Levelised Cost of Electricity (LCOE), even though cost per peak Watt wasn’t anything special.  The reason for the excellent LCOE is that the Atacama solar resource is the best in the world, as confirmed here.

Today I’ll run the numbers on another solar project in the Atacama desert, namely the Atacama 1 Concentrated Solar Thermal (CST) plant due to open in 2018.  An interesting story about the project recently appeared in The Guardian, whilst key project details are given here.

The 110 MW solar plant is at 1,100 m altitude and has a conventional heliostat/tower design with 17.5 hours of two-tank molten salt energy storage.  It’s a big project by experienced developers (Abengoa); the central tower is 243 m high, there are 10,600 heliostats each of 140 m^2, and the overall heliostat field occupies 1.484 km^2.  The receiver itself is a cylinder 32 m high and 19 m in diameter.  Molten salt is fed to the receiver from the cold tank at 300°C and returned at 550°C.

The cost of the project is reported by The Guardian as USD 1.1 billion.  The annual output was not given in any report I read, although it was reported that the project will abate 840,000 t of CO2 emissions per year.  At an emissions intensity of 1 t CO2 per MWh, that corresponds to an annual output of 840,000 MWh at a Capacity Factor of 840,000/(110×24×365) = 0.87.  That seems high but achievable since the plant provides baseload power to regional industries, there is a lot of storage and the solar resource is superb.

Let me now estimate 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% of capital cost rather than 3% as in posts during 2011.  

The results for the Atacama 1 CST installation are as follows:

Cost per peak Watt              USD 10.00/Wp
LCOE                                     USD 149/MWh

The components of the LCOE are:

Capital           {0.094 × 1.1×109}/{840,000 MWhr} = USD 123/MWhr
O&M              {0.020 × 1.1×109}/{840,000 MWhr} = USD 26/MWhr

Conclusion

My LCOE estimate of USD 149/MWh compares to Abengoa’s estimate of USD 120/MWh.  It is also of interest to compare to other CST projects such as the proposed Port Augusta plant (USD 153/MWh), Cerro Dominador USD 125/MWh, Ashalim USD 284/MWh and Xina Solar One USD 256/MWh.  These solar plants have a higher LCOE than the best of recent PV plants without storage, such as Nyngan & Broken Hill AUD 139/MWh = USD 99/MWh. 

A historical comparison might also be interesting.  Probably the most famous CST plant of all is Gemasolar, which opened in September 2011.  For that I estimated the LCOE to be AUD 447 per MWh in 2011 Australian dollars.  The current exchange rate is about 1 AUD = USD 0.72, so AUD 447 is about USD 322.  A strong improvement, and I suspect there will be further improvement as more CST plants are built.

Acknowledgement: Thanks to Anthony Kitchener for providing web links for the Atacama 1 CST installation.

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