Wednesday, December 30, 2015

PV versus CST


2015 was a watershed year.

The Paris climate change talks revealed a positive change in attitude amongst many countries (even if the signed agreement is rather toothless), steaming coal consumption has entered a structural decline, China is getting serious about air pollution, renewable electricity generation is cheaper than from fossil fuels if conditions are favourable, and battery storage is much talked about for numerous applications.

And it’s batteries that I want to blog about today.

Many studies on this blog and elsewhere show that PV is cheaper than Concentrated Solar Thermal (CST) power generation in the absence of storage.  But has battery technology advanced so much that PV plus batteries can compete with CST plus thermal storage at utility scale?  That’s the question I’ll answer.

In 2015 I analysed two installations in the Atacama desert where the solar conditions are superb.  The first was a PV installation at Amanecer, the second was the Atacama 1 CST project.  These are big projects delivered at world’s best practice. 

The Amanecer project had peak power 100 MW, no storage, Capacity Factor 0.308, annual output of 270 GWh, total cost USD 260.5 million, and my LCOE estimate was USD 110/MWh.  The Atacama 1 CST project was a conventional heliostat-tower design with twin tank molten salt energy storage for 17.5 hours, peak power 110 MW, estimated annual output 840 GWh, total cost USD 1.1 billion, and my LCOE estimate was USD 149/MWh.

What would happen if we tried to replicate the output of Atacama 1 with PV plus batteries?  Let me use the following assumptions:

  • PV costs and output are as per my Amanecer blog post,
  • batteries have a round-trip efficiency of 95% for a charge/discharge cycle,
  • batteries last 12.5 years under a regime with a complete charge/discharge cycle each day to a depth of 70%, and
  • the capital cost of batteries lies in the range USD 100 to USD 400 per kWh.
Suppose we want to replicate the peak power of Atacama 1 with PV, namely 110 MW.  Such a PV system would produce (110/100) × 270 = 297 GWh per year.  To match the annual output of Atacama 1, namely 840 GWh, requires that 840 - 297 = 543 GWh be delivered via batteries, or that 543 / 0.95 = 571.6 GWh be delivered by PV panels after accounting for the round-trip efficiency of storage.  Since the Capacity Factor for the site is 0.308, the peak power of the panels would be 571.6 / (0.308 × 24 × 365) = 0.212 GW or 212 MW.  The cost of those panels would be (212/100) × 260.5 = USD 552 million.

What about the cost of the batteries?

Well, we need to deliver 543 GWh annually, or 1,487,671 kWh per day.  But the batteries are assumed good for 70% discharge on a daily basis, so we need storage of 1,487,671/0.7 = 2,125,244 kWh.

And there’s more … We know the PV panels will last for 25 years, whereas the batteries are assumed to last for only 12.5 years.  So we need two sets of batteries during the assumed 25 year life of the project.  That makes 2 × 2,125,244 = 4,250,489 kWh battery storage required.

Exploring the sensitivity, the total cost of the batteries will be:
  • USD 425 million at battery cost USD 100 per kWh
  • USD 850 million at battery cost USD 200 per kWh
  • USD 1,275 million at battery cost USD 300 per kWh
  • USD 1,700 million at battery cost USD 400 per kWh
All up, to replicate the Atacama 1 CST project with PV plus batteries we need to add USD 260.5 million plus USD 552 million plus the cost of the batteries given above.  That makes:
  • USD 1.238 billion at battery cost USD 100 per kWh
  • USD 1.622 billion at battery cost USD 200 per kWh
  • USD 2.088 billion at battery cost USD 300 per kWh
  • USD 2.512 billion at battery cost USD 400 per kWh
Those figures need to be compared with the USD 1.1 billion cost of the Atacama 1 CST plant. 

Note that the capital price in 2015 for batteries is around USD 350 per kWh, so I think the result is clear.  Batteries are already cost efficient for portable electronic devices, maybe break even with flywheel costs for short-term frequency control, and in a few years will be cost-efficient for behind-the-meter applications and automobiles.  However the above estimates show that battery storage is nowhere near competitive with CST plus thermal storage for utility-scale applications.  In my view, proponents of utility-scale CST with storage can proceed with confidence.

With that (and as an enthusiastic inventor and developer of CST concepts), I wish all readers of this blog a successful and happy year ahead.  Thank you for reading this blog.

Acknowledgement: Thanks to Anthony Kitchener for suggesting that I perform this analysis.

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