Levelised Cost of Electricity Literature Review/Literature Review of LCOE and Solar

Lazard's Levelized Cost of Energy Analysis Version 8 (2014) : http://web.archive.org/web/20150704042906/http://www.lazard.com/PDF/Levelized%20Cost%20of%20Energy%20-%20Version%208.0.pdf

Levelized Cost of Energy Analysis - Version 5.0 http://web.archive.org/web/20180309230242/http://blog.cleanenergy.org/files/2009/04/lazard2009_levelizedcostofenergy.pdf Certain Alternative Energy generation technologies are becoming increasingly cost-competitive with conventional generation technologies under some scenarios, before factoring in environmental and other externalities (e.g., RECs, transmission and back-up generation/system reliability costs) as well as construction and fuel costs dynamics affecting conventional generation technologies

Levelized Cost of Solar Photovoltaics in North Carolina http://www.greentechmedia.com/articles/read/grid-parity-for-solar-in-north-carolina-study/ http://web.archive.org/web/20130820204048/http://energync.org/assets/files/LCOE%20of%20Solar%20PV%20in%20North%20Carolina-FINAL.pdf A key component of the research evaluated the levelized cost of energy (LCOE) of North Carolina solar PV systems. The LCOE of solar PV systems reflects the price at which energy must be sold to break even over the assumed economic life of the system. The LCOE equation takes into account system costs, as well as factors including financing, insurance, operations and maintenance, aepreciation schedules and any applicable incentives. The analysis used the System Advisor Model (SAM) developed by the National Renewable Energy Laboratory2 to calculate the LCOE under a series of ownership and systems capacity scenarios from 2006 to 2020. In addition, retail electricity prices were calculated for 2006 to 2020. Finally, the evaluation compared the LCOE of solar PV systems and the retail electricity prices in nine scenarios to identify if and when the declining LCOE of solar PV intersects with increasing retail electricity prices.

Value of Solar Power Far Exceeds the Electricity[edit | edit source]

J. Farrell, Value of Solar Power Far Exceeds the Electricity , 24 June, 2011, Renewable energy world,[1] From the ability to reduce peak demand on the transmission and distribution system, hedge against fuel price increases, or enhance grid and environmental security, solar power has a monetary value as much as ten times higher than its energy value. Distributed solar power provides electricity on-site or near to demand, reducing transmission losses, as well as wear-and-tear on utility equipment by mitigating peak demand. It also eliminates the need to hedge against fuel price swings. These benefits add 3 to 14 cents per kWh to the utility bottom line.

See the report used for the blog: R. Perez, K. Zweibel, T. E. Hoff,2011, Solar Power Generation in the US: Too Expensive or a bargain?, pp 1-16 ABSTRACT: This article identifies the combined value that solar electric power plants deliver to utilities' rate payers and society's tax payers. Benefits that are relevant to utilities and their rate payers include traditional,measures of energy and capacity. Benefits that are tangible to taxpayers include environmental, fuel price mitigation, outage risk protection, and long‐term economic growth components. Results for the state of New York suggest that solar electric installations deliver between 15 to 40 cents per kWh to ratepayers and taxpayers. These results provide economic justification for the existence of payment structures (often referred to as incentives) that transfer value from those who benefit from solar electric generation to those who invest in solar electric generation.

Where Renewables Stack Up: Comparative Chart on Levelized Cost of Energy and the "Value" of Clean Energy[edit | edit source]

By Stephen Lacey on Jun 24, 2011 at 2:56 pm According to a report released this week by three leading solar researchers, the value of solar PV is between 3 and 14 cents a kilowatt-hour for a utility. The contributing factors include: stabilizing the grid during peak times, requiring less infrastructure for transmitting electricity and, of course, the reduction in GHG emissions and particulates. The Institute for Local Self Reliance illustrates the findings:

http://thinkprogress.org/romm/2011/06/24/253357/where-renewables-stack-up-comparitive-chart-on-levelized-cost-of-energy-and-the-value-of-clean-energy/

Achievements and Challenges of Solar Electricity from Photovoltaics (2011)[edit | edit source]

S. Hegedus and A. Luque, 2011, Achievements and Challenges of Solar Electricity from Photovoltaics, in Handbook of Photovoltaic Science and Engineering, Second Edition,Edited by Antonio Luque and Steven Hegedus, © 2011 John Wiley & Sons, Ltd, pp 1-38[2]

Assumptions and the levelized cost of energy for photovoltaics[edit | edit source]

Seth B. Darling, Fengqi You, Thomas Veselkad and Alfonso Velosae, Assumptions and the levelized cost of energy for photovoltaics,[3] DOI: 10.1039/c0ee00698j

Photovoltaic electricity is a rapidly growing renewable energy source and will ultimately assume a major role in global energy production. The cost of solar-generated electricity is typically compared to electricity produced by traditional sources with a levelized cost of energy (LCOE) calculation. Generally, LCOE is treated as a definite number and the assumptions lying beneath that result are rarely reported or even understood. Here we shed light on some of the key assumptions and offer a new approach to calculating LCOE for photovoltaics based on input parameter distributions feeding a Monte Carlo simulation. In this framework, the influence of assumptions and confidence intervals becomes clear.

Should solar photovoltaics be deployed sooner because of long operating life at low, predictable cost? (2010)[edit | edit source]

Ken Zweibel, Should solar photovoltaics be deployed sooner because of long operating life at low, predictable cost?, Energy Policy, Volume 38, Issue 11, Energy Efficiency Policies and Strategies with regular papers., November 2010, Pages 7519-7530, ISSN 0301-4215, DOI: 10.1016/j.enpol.2010.07.040.

• large increases in deployment of solar PV over past decade, although still too slow to affect energy and environmental challenges (small % of global mix)
• "Classic economic evaluations would put PV electricity in the range of 15–50c/kWh,depending on local sunlight and system size." - still percieved as too costly

http://www.pelagicos.net/ENVS4100_fall2010/readings/Zweibel_2010.pdf

Fuel-Parity: New Very Large and Sustainable Market Segments for PV Systems[edit | edit source]

Christian Breyer, Alexander Gerlach, Daniel Schäfer, Jürgen Schmid,Fuel-Parity: New Very Large and Sustainable Market Segments for PV Systems, IEEE EnergyCon 2010, Manama/ Bahrain, 18-22 December, pp 1-6

Abstract—Global power plant capacity largely depends on burning fossil fuels. Increasing global demand and degrading and diminishing fossil fuel resources are fundamental drivers for constant fossil price escalations. Price trend for solar PV electricity is vice versa. Fuel-parity concept, i.e. PV systems lower in cost per energy than fuel-only cost of fossil fired generators and power plants, well describes the fast growing economic benefit of PV systems. Fuel-parity is already reached in first markets and first applications and will establish very large markets in the 2010s. Solar PV electricity will become a very competitive energy option for most regions in the world.

• LCOE eqns and cost comparisons between PV and fossil fuels globally

Assumptions and the levelized cost of energy for photovoltaics [2011][edit | edit source]

S. B. Darling, F. You, T. Veselka, and A. Velosa, "Assumptions and the levelized cost of energy for photovoltaics," Energy Environ. Sci., 2011.[4] DOI: 10.1039/C0EE00698J http://www.renewableenergyfocususa.com/_virtual/article-downloads/LCOE-SolarPaper_a15788.pdf and http://www.mcs.anl.gov/uploads/cels/papers/P1810.pdf

Photovoltaic electricity is a rapidly growing renewable energy source and will ultimately assume a major role in global energy production. The cost of solar-generated electricity is typically compared to electricity produced by traditional sources with a levelized cost of energy (LCOE) calculation. Generally, LCOE is treated as a definite number and the assumptions lying beneath that result are rarely reported or even understood. Here we shed light on some of the key assumptions and offer a new approach to calculating LCOE for photovoltaics based on input parameter distributions feeding a Monte Carlo simulation. In this framework, the influence of assumptions and confidence intervals becomes clear

Estimates[edit | edit source]

Technology Roadmap – Solar Photovoltaic Energy 2010[edit | edit source]

International Energy Agency (IEA), 2010. Technology Roadmap – Solar Photovoltaic Energy, October, 2010 [5]

• The primary PV economic goal is to reduce turnkey system prices and electricity generation costs by more than two-thirds by 2030.
• PV is already competitive today in selected off-grid applications, and will achieve competitiveness in three phases.
• Annual CO2 savings with PV deployment

True cost of solar energy and other renewables: California case study (2010)[edit | edit source]

Tan Hunt, True cost of solar energy and other renewables: California case study ,December 13, 2010, ElectoIQ/Renewable Energy Word. [6]

• misreporting still an issue with considering renewable energy costs fairly - they are comparable with conventional sources in several places

Achieving Low-Cost Solar PV: Industry Workshop Recommendations for Near-Term Balance of System Cost Reductions (2010)[edit | edit source]

Lionel Bony, Stephen Doig, Chris Hart, Eric Maurer,Sam Newman.2010, Achieving Low-Cost Solar PV: Industry Workshop Recommendations for Near-Term Balance of System Cost Reductions, Rocky Mountain Institute, September 2010,pp1-24 [7]

• balance of system costs account for roughly 50% of total solar PV system cost
• recommendations for design have potential to reduce BOS costs ~50% more than current best practice

Solar Electricity Global Benchmark Price Indices, Dec 2010 Survey Results [Updated monthly][edit | edit source]

SolarBuzz.com. 2010.Solar Electricity Global Benchmark Price Indices, Dec 2010 Survey Results[8]^[1]

• increasing order of average prices: industrial (500kW), commercial (50kW), residential (2kW)
• Some Key Assumptions (Short Term): 5% interest rate assumption. If "Free money" rather than the 5% interest assumption used, could bring the price of a Solar System which calculates at 24 cents per kilowatt hour down to 15 cents per kilowatt hour
• Personal and Corporate taxation can affect the "after tax" cents per kilowatt hour. Tax regimes that provide attractive allowances for capital equipment against high marginal tax rates can significantly enhance the economics of solar relative to Utility tariffs. This effect is dependent upon individual circumstances and therefore has been excluded from the Solarbuzz Index
• Some Key Assumptions (Long Term):
• All Solarbuzz Price Indices exclude the impact of rebate programs that are available today in some European Countries, Japan, some States of the USA and through bi-lateral aid programs. It is possible to find your local government or utility offering rebates of anything from $3 - $5 Watt peak.
• Done considering 20 years?
• Decreasing trend in price
• Calculation methodology: http://www.solarbuzz.com/SolarIndicesCalc.htm
• Solar Electricity Price Index verses US Electricity tariff Price Index (US cents per kilowatt hour):http://www.solarbuzz.com/SolarPrices.htm
• Solar Price depends on interest rates: http://www.solarbuzz.com/Consumer/Payback.htm

Reconsidering solar grid parity.[edit | edit source]

Yang, Chi-Jen. 2010. Reconsidering solar grid parity. Energy Policy 38, no. 7 (July): 3270-3273.^[2]

AbstractGrid parity–reducing the cost of solar energy to be competitive with conventional grid-supplied electricity–has long been hailed as the tipping point for solar dominance in the energy mix. Such expectations are likely to be overly optimistic. A realistic examination of grid parity suggests that the cost-effectiveness of distributed photovoltaic (PV) systems may be further away than many are hoping for. Furthermore, cost-effectiveness may not guarantee commercial competitiveness. Solar hot water technology is currently far more cost-effective than photovoltaic technology and has already reached grid parity in many places. Nevertheless, the market penetration of solar water heaters remains limited for reasons including unfamiliarity with the technologies and high upfront costs. These same barriers will likely hinder the adoption of distributed solar photovoltaic systems as well. The rapid growth in PV deployment in recent years is largely policy-driven and such rapid growth would not be sustainable unless governments continue to expand financial incentives and policy mandates, as well as address regulatory and market barriers.

• Table 1.Cost structure of a typical (3.8 kW) residential PV system (source: Solarbuzz, NREL Solar Advisor Model 2009).
• Table 2.Financial spreadsheet for a typical residential PV system.

Toward a Sunny Future? Global Integration in the Solar PV Industry[edit | edit source]

Jacob Funk Kirkegaard, Thilo Hanemann, Lutz Weischer, Matt Miller,Toward a Sunny Future? Global Integration in the Solar PV Industry, World Resources Institute (WRI) Working Paper Series, pp 1- 66, May 2010^[3]

• Table 1 Lifecycle breakdown of a solar PV investment project
• Table 2 PV system price evolution scenario (2009–2015) (in dollars)
• Figure 8 Levelized cost of energy: solar versus other energy sources in 2009
• Lazard Ltd. 2009. Levelized Cost of Energy Analysis—Version 3.0. Available at http://blog.cleanenergy.org.[9]
• Levelised cost of generation model: http://web.archive.org/web/20120306211540/http://www.energy.ca.gov/2007_energypolicy/documents/2007-06-12_workshop/presentations/2007-06-12_NAVIGANT_CONSULTING.PDF
• Levelised Cost of New generating tech: Energy Information Administration, Annual Energy Outlook 2009 (revised), April 2009,SR‐OIAF/2009‐03, http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html [10]

Levelized Costs of Electricity Generation (LCOE), Reference List[edit | edit source]

Check the references in this list:[11]

I. LCOE of Every Power Technology

Committee on America's Energy Future. (2009). America's Energy Future: Technology and Transformation. Washington, DC: The National Academies Press. [Full-text at http://bit.ly/8ZsYVM]

Energy Information Administration. (2010). Cost and Performance Characteristics of New Central Station Electricity Generating Technologies. In Annual Energy Outlook 2010: Early Release Overview. Washington, DC: Energy Information Administration. [Full-text at http://bit.ly/d3bWF9; Spreadsheet at http://bit.ly/9MCyDZ]

European Commission. (2008). Commission staff working document accompanying the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Second Strategic Energy Review : an EU energy security and solidarity action plan - Energy Sources, Production Costs and Performance of Technologies for Power Generation, Heating and Transport. SEC(2008) 2872. Brussels, Belgium: European Commission.

Hutchinson, J., Inwood, S., James, R., Ramachandran, G., Hamel, J., & Libby, C. (2009). Program on Technology Innovation: Integrated Generation Technology Options (1019539). Palo Alto, CA: Electric Power Research Institute. [Full-text at http://bit.ly/cxGmpU]

International Energy Agency. (2010). Projected Costs of Generating Electricity - 2010 Edition. Paris, France: International Energy Agency. [Full-text at http://bit.ly/9clY1X]

Kaplan, S. (2008). Power Plants: Characteristics and Costs. CRS Report for Congress, RL34746. Washington, DC: Congressional Research Service. [Full-text at http://bit.ly/d7M0Ja]

Klein, J. (2010). Comparative Costs of California Central Station Electricity Generation: Final Staff Report (CEC-200-2009-017-SF). Sacramento, CA: California Energy Commission. [Full-text at http://bit.ly/bINOG5]

Lazard Ltd. (2009). Levelized Cost of Energy Analysis - Version 3.0. New York, NY: Lazard Ltd. [Full-text at http://bit.ly/agFmJA]

II. LCOE of Renewable Power

Black & Veatch Corporation. (2010). Renewable Energy Transmission Initiative Phase 2B: Draft Report. Sacramento, CA: RETI Stakeholder Steering Committee. [Full-text at http://bit.ly/bnSAmY]

III. LCOE of Fossil Energy Power

Klara, J.M. (2007). Fossil Energy Power Plant Desk Reference: Bituminous Coal and Natural Gas to Electricity Summary Sheets (DOE/NETL-2007/1282). Pittsburgh, PA: National Energy Technology Laboratory. [Full-text at http://bit.ly/a5aD1d]

Lako, P. (2009). Coal-Fired Power. Technology Brief, E01. Paris, France: International Energy Agency. [Full-text at http://web.archive.org/web/20150516140722/http://www.etsap.org:80/E-techDS/]

Research and Development Solutions, LLC (RDS). (2007). Cost and Performance Baseline for Fossil Energy Plants, Volume 1: Bituminous Coal and Natural Gas to Electricity (DOE/NETL-2007/1281). Pittsburgh, PA: National Energy Technology Laboratory. [Full-text at http://bit.ly/9RTcEV]

Seebregts, A. J. (2009). Gas-Fired Power. Technology Brief, E02. Paris, France: International Energy Agency. [Full-text at http://web.archive.org/web/20150516140722/http://www.etsap.org:80/E-techDS/]

IV. LCOE of Nuclear Power

Congressional Budget Office. (2008). Nuclear Power's Role in Generating Electricity. Washington, DC: Congressional Budget Office. [Full-text at http://bit.ly/dz8eov]

Deutch, J. M., Forsberg, C. W., Kadak, A. C., Kazimi, M. S., Moniz, E. J., Parsons, J. E., Yangbo, D., & Pierpoint, L. (2009). Update of the MIT 2003 Future of Nuclear Power Study. Cambridge, MA: Massachusetts Institute of Technology. [Full-text at http://bit.ly/aoItOj]

Hempstead, J., Sabatelle, A. J., Haggarty, M., Rose, K., Schumacher, L., Smyth, W., & Hess, W. L. (2008). New Nuclear Generating Capacity: Potential Credit Implications for U.S. Investor Owned Utilities. New York, NY: Moody's Investers Service. [Full-text at http://bit.ly/akSoVd]

Simbolotti, G. (2009). Nuclear Power. Technology Brief, E03. Paris, France: International Energy Agency. [Full-text at http://web.archive.org/web/20150516140722/http://www.etsap.org:80/E-techDS/] Posted by Hun Park at 3:33 PM

Realistic generation cost of solar photovoltaic electricity[edit | edit source]

Parm Pal Singh, Sukhmeet Singh, Realistic generation cost of solar photovoltaic electricity, Renewable Energy, Volume 35, Issue 3, March 2010, Pages 563-569, DOI: 10.1016/j.renene.2009.07.020.^[4]

Abstract: Solar photovoltaic (SPV) power plants have long working life with zero fuel cost and negligible maintenance cost but requires huge initial investment. The generation cost of the solar electricity is mainly the cost of financing the initial investment. Therefore, the generation cost of solar electricity in different years depends on the method of returning the loan. Currently levelized cost based on equated payment loan is being used. The static levelized generation cost of solar electricity is compared with the current value of variable generation cost of grid electricity. This improper cost comparison is inhibiting the growth of SPV electricity by creating wrong perception that solar electricity is very expensive. In this paper a new method of loan repayment has been developed resulting in generation cost of SPV electricity that increases with time like that of grid electricity. A generalized capital recovery factor has been developed for graduated payment loan in which capital and interest payment in each installment are calculated by treating each loan installment as an independent loan for the relevant years. Generalized results have been calculated which can be used to determine the cost of SPV electricity for a given system at different places. Results show that for SPV system with specific initial investment of 5.00 $/kWh/year, loan period of 30 years and loan interest rate of 4% the levelized generation cost of SPV electricity with equated payment loan turns out to be 28.92 [cent sign]/kWh, while the corresponding generation cost with graduated payment loan with escalation in annual installment of 8% varies from 9.51 [cent sign]/kWh in base year to 88.63 [cent sign]/kWh in 30th year. So, in this case, the realistic current generation cost of SPV electricity is 9.51 [cent sign]/kWh and not 28.92 [cent sign]/kWh. Further, with graduated payment loan, extension in loan period results in sharp decline in cost of SPV electricity in base year. Hence, a policy change is required regarding the loan repayment method. It is proposed that to arrive at realistic cost of SPV electricity long-term graduated payment loans may be given for installing SPV power plants such that the escalation in annual loan installments be equal to the estimated inflation in the price of grid electricity with loan period close to working life of SPV system.

• Cost of solar generation as a function of initial investment and solar output: http://en.wikipedia.org/wiki/Photovoltaics
• Note that most studies do 20-25 years...but systems could be functional 30-40years. Thus, after the loan repayment period of 20 years, the energy will be free and not accounted for in the cost analysis, resulting in a much higher PV cost
• Fig. 1: specific initial investment vs. specific electric output for different system costs
• Lower generalized capital recovery factor for longer loan period, lower interest, higher escalation of grid
• expressed need for scientists to give a better value for the working life of PV since it significantly affects the LCOE, and financing
• Loan terms important (LCOE sensitive to this) since the cost of PV electricity is mainly the cost of financing the huge initial investment

2008 Solar technologies market report[edit | edit source]

S.Price,R.Margolis,2008 Solar technologies market report,Energy Efficiency & Renewable Energy,US Department of Energy,2010.^[5]

*Levelized cost of energy (LCOE) is the ratio of an electricity-generation system's amortized lifetime costs (installed cost plus lifetime O&M costs) to the system's lifetime electricity generation. The calculation of LCOE is highly sensitive to installed system cost, O&M costs, location, orientation, financing, and policy. Thus it is not surprising that estimates of LCOE vary widely across sources.

• worldwide, the range of LCOE is approximately $0.20–$0.80 per kWh for rooftop PV and $0.12–$0.18 per kWh for parabolic trough CSP, not including government incentives (REN21 2008), due largely to the effect on LCOE of location and the corresponding solar radiation (insolation).
• Figure 3.1 shows LCOE for residential PV systems in selected U.S. cities ranging from about $0.20/kWh to more than $0.32/kWh (when calculated with the federal ITC) based on the quality of the solar resource. Without the ITC, the range for these same cities is about $0.28/kWh to $0.46/kWh.
• PV cell type and efficiency,
• Table 3.2. Module Price, Manufacturing Cost, and Efficiency Estimates by Technology, 2008
• replacing/rebuilding inverters every 10 years was projected to almost double annual O&M costs by adding an equivalent of 0.1% of the installed system cost, bringing total annual O&M cost to 0.22% of installed system cost (Moore and Post 2007).
• manufacturers have begun offering customers optional warranties with up to 10 years of coverage for an additional fee for inverters
• T.Peterson,T.Key,S.Rosinsky,N.Jones,in:Solar Photovoltaics:Status,Cost,and Trends,EPRI,Paolo Alto,CA,2009(10150804)[12].
• B. Buller and D. Eaglesham, "Thin Film PV: The Pathway to Grid Parity," in Optics and Photonics for Advanced Energy Technology, OSA Technical Digest (CD) (Optical Society of America, 2009), paper ThD1.http://www.opticsinfobase.org/abstract.cfm?URI=Energy-2009-ThD1[ http://web.archive.org/web/20120113084104/http://2008.thinfilmconference.org:80/fileadmin/TFC_docs/videos/081114_TFC_02_002_Buller.pdf]

Comparative Costs of California Central Station Electricity Generation[edit | edit source]

Klein, J. (2010). Comparative Costs of California Central Station Electricity Generation: Final Staff Report (CEC-200-2009-017-SF). Sacramento, CA: California Energy Commission. [Full-text at http://bit.ly/bINOG5]^[6]

• Very Detailed Report on LCOE of several energy techs
• Table 1: Summary of Average Levelized Costs—In-Service in 2009, depends on Merchant, IOU or POU . For Solar PV (single axis)from 26 to 32 Cents/kWh (All of these costs vary depending on whether the project is a merchant facility, an investor owned utility (IOU), or a publicly owned utility (POU))- Assumed 20 year life
• Large decrease in LCOE from 2007 to 2009 for Solar PV
• Used Energy Commission's Cost of Generation Model, Definition of Levelized Cost
• Table 6: Average Levelized Cost Components for In-Service in 2009—Merchant Plants
• Sensitivity to tax benefits covered (Fig. 19-21)

Renewable Energy Transmission Initiative Phase 2B: Draft Report.[edit | edit source]

Black & Veatch Corporation. (2010). Renewable Energy Transmission Initiative Phase 2B: Draft Report. Sacramento, CA: RETI Stakeholder Steering Committee. [Full-text at http://bit.ly/bnSAmY] [13]^[7]

• The Renewable Energy Transmission Initiative (RETI) is a statewide planning process to identify the transmission projects needed to accommodate California's renewable energy goals.www.energy.ca.gov/reti
• Figure 1-1. Typical Cost of Generation Ranges (Levelised cost of generation)- several technologies: Thin Film $138-206 $/MWh (13.8c/kWh)
• Rather than comparing projects on the levelized cost of generation alone, the rank cost includes the cost of generation and the cost of transmission and also considers the energy and capacity values of the generation profile of the project.
• Rank Costs = Generation Cost + Transmission Cost + Integration Cost - Energy Value - Capacity Value (determining energy and capacity value unclear)
• Cost of Generation Calculator used
• Effect of incentives on LCOE shown. Canadian and Mexican incentives considered.
• Solar 8760 profiles were modeled using PVsyst and TMY2 solar data.
• Figure 6-10. Tradeoff Between Generation and Transmission at Various Levels of Overbuild.
• Sensitivity Analysis done with and without incentives and other variables changed

Chipping away at levelized costs: SunPods, Sunsonix seek lower solar LCOE in field and fabs[edit | edit source]

Tom Cheyney, 2010.Chipping away at levelized costs: SunPods, Sunsonix seek lower solar LCOE in field and fabs

• The solar photovoltaic metric du jour is levelized cost of energy, commonly referred to by its initials, LCOE.
• Some issues on effects of actions on the equations commented on

Photovoltaics Power Up[edit | edit source]

Swanson, Richard M. 2009. Photovoltaics Power Up. Science 324, no. 5929 (May 15): 891-892.^[8]

• Graph of grid parity for different technologies [Source: Lazard Capital Markets, 1/9/09]
• "An upshot of these cost reductions is that the levelized cost of energy (LCOE) for PV plants (see the figure) is now in the range of conventional generation options when taking into account the impact of the U.S. federal 30% investment tax credit, and will be fully competitive without that incentive in 5 years. Perhaps surprisingly, PV electricity today costs less than that from a new natural gas peaking plant, and is rapidly encroaching on combined cycle base-load generation costs."
• For PV, not only take into account its cost effectiveness but also its lack of fuel price risk, lack of potential carbon emission costs, minimal siting limitations, and lack of water use.
• Thin films are rather new technologies that may, if successful, help drive costs lower over time.

The technical, geographical, and economic feasibility for solar energy to supply the energy needs of the US[edit | edit source]

Vasilis Fthenakis, James E. Mason, Ken Zweibel,The technical, geographical, and economic feasibility for solar energy to supply the energy needs of the US, Energy Policy, Volume 37, Issue 2, February 2009, Pages 387-399,^[9] .

Abstract: So far, solar energy has been viewed as only a minor contributor in the energy mixture of the US due to cost and intermittency constraints. However, recent drastic cost reductions in the production of photovoltaics (PV) pave the way for enabling this technology to become cost competitive with fossil fuel energy generation. We show that with the right incentives, cost competitiveness with grid prices in the US (e.g., 6-10 US[cent sign]/kWh) can be attained by 2020. The intermittency problem is solved by integrating PV with compressed air energy storage (CAES) and by extending the thermal storage capability in concentrated solar power (CSP). We used hourly load data for the entire US and 45-year solar irradiation data from the southwest region of the US, to simulate the CAES storage requirements, under worst weather conditions. Based on expected improvements of established, commercially available PV, CSP, and CAES technologies, we show that solar energy has the technical, geographical, and economic potential to supply 69% of the total electricity needs and 35% of the total (electricity and fuel) energy needs of the US by 2050. When we extend our scenario to 2100, solar energy supplies over 90%, and together with other renewables, 100% of the total US energy demand with a corresponding 92% reduction in energy-related carbon dioxide emissions compared to the 2005 levels.

• Fig. 1. Levelized cost of electricity estimates for solar electricity production in the US southwest. These estimates are calculated by the net present value cash flow method, using EPRI (2003) financial model with a 30-year capital recovery period assuming: capital structure of 45% equity and 55% debt; 10% cost of equity capital and 6.5% cost of debt capital; 30-year capital recovery period; 38.2% tax rate, modified asset cost recovery system (MACRS) depreciation; 1.9% annual inflation rate; and 5% after tax, weighted average, real discount rate. Property taxes and insurance costs are assumed to be 2% of capital. These estimates also include, power transmission losses of 10%, and HVDC transmission cost of $0.007/kWh.
• Fig. 4. Solar and Land availability map for the southwest US (source: National Renewable Energy Laboratory).
• Some aims: Reducing the price of PV systems by 63% (to $0.06/kWh for US-SW insolation),Reducing the price of CSP by 55% (to $0.09/kWh for US-SW insolation).

Program on Technology Innovation: Integrated Generation Technology Options[edit | edit source]

Hutchinson, J., Inwood, S., James, R., Ramachandran, G., Hamel, J., & Libby, C. (2009). Program on Technology Innovation: Integrated Generation Technology Options (1019539). Palo Alto, CA: Electric Power Research Institute. [Full-text at http://bit.ly/cxGmpU]^[10]

• PV system costs have continually decreased—from about $0.40/kWh in 1990 to about $0.20-0.25/kWh by the early 2000 timeframe. The price of power from today's grid-connected systems

is roughly in the $0.15-0.30/kWh range. The DOE goal is to reduce the cost of electricity to $0.09-0.18/kWh by 2010.

• Capital Cost Dec 2008: $/kW 7,981; Levelized Cost of Electricity (LCOE,Dec. 2008 Constant $/MWh): 456 (@ 26% capacity factor)
• Policies limiting U.S. CO2 emissions would create a cost for each metric ton of CO2 emitted. Thus the levelized costs of electricity associated with different forms of generation will increase according to the emissions intensity of each generation technology.

Annual Energy Outlook 2009[edit | edit source]

Energy Information Administration, Annual Energy Outlook 2009 (revised), April 2009,SR‐OIAF/2009‐03, http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html^[11]

• Levelized Cost of New Electricity Generating Technologies: Solar PV still very high at $395.7/MWh

Lazard LCOE[edit | edit source]

Lazard,Levelised Cost of Energy Analysis- Version 3.0, June 2009, pp1 -16^[12]

"Conventional generation technologies are subject to uncertainty regarding the potential for future carbon emission costs, which would not affect Alternative Energy generation technologies except positively through credit positions or otherwise"

• Sensitivity Analysis to various costs: Fuel cost, illustrative carbon emission costs, U.S. federal tax subsidies, anticipated capital costs over time
• Key Assumptions : pp 14-16
• Solar PV- Crystalline $116, $160-$196 $/MWh; Solar PV-Thin-film $87, $131-$182 $/MWh [compare against peak price for 10 largest cities in U.S.]
• Solar- no sensitivity to fuel costs/carbon emission costs . Capital cost main cost.
• "20 Percent Wind Energy Penetration in U.S. appended from page 25 - 126

Relative Costs of Electricity Generation Technologies[edit | edit source]

Thorn Walden,Relative Costs of Electricity Generation Technologies, Canadian Energy Research Institute, Prepared for:Canadian Nuclear Association, September 2008, pp. 1-8^[13]

• Figure 1 Relative Costs of Electricity Generation Technologies (2003 Canadian cents per kilowatt-hour)- solar extremely high ($80 cents /kWh)

Power Plants: Characteristics and Costs[edit | edit source]

Kaplan, S. (2008). Power Plants: Characteristics and Costs. CRS Report for Congress, RL34746. Washington, DC: Congressional Research Service. [Full-text at http://bit.ly/d7M0Ja]

• Solar PV - $255.42/ MWh; Plant installed cost is $5.9 -7.1/kW for plants totalling 8-14 MW
• Table 2. Emission Controls as an Estimated Percentage of Total Costs for a New Pulverized Coal Plant

FACILITATING THE DEVELOPMENT AND USE OF RENEWABLE ENERGY AND ENABLING 2010 AND 2025 RENEWABLE TARGETS [Canada][edit | edit source]

OPA, 2008.FACILITATING THE DEVELOPMENT AND USE OF RENEWABLE ENERGY AND ENABLING 2010 AND 2025 RENEWABLE TARGETS

• LUEC method used
• No Solar data
• ALL INCLUSIVE LUEC ANALYSIS OF RENEWABLE RESOURCES - LUEC but not for Solar

Analysis of the Ontario Power Authority's Consideration of Environmental Sustainability in Electricity System Planning [Canada][edit | edit source]

Robert B. Gibson,Mark Winfield,Tanya Markvart, Kyrke Gaudreau, Jennifer Taylor,2008.An Analysis of the Ontario Power Authority's Consideration of Environmental Sustainability in Electricity System Planning,Studies in Ontario Electricity Policy Series Paper No. 2, pp 1-173.

• Deficiencies in LUEC analysis is that they may not fully capture future costs says Pembina Institute
• Projects like nuclear than have large costs in the future would not fully account for complexity and changes in future

The Drivers of The Levelized Cost of electricity for Utility-Scale Photovoltaics[edit | edit source]

Levelized Cost of Electricity - The Drivers of The Levelized Cost of electricity for Utility-Scale Photovoltaics, SunPower Corporation, 14 August, 2008, pp. 1-27^[14]

Report Review: " Sunpower - August 2008. The calculation of the levelized cost of electricity (LCOE) provides a common way to compare the cost of energy across technologies because it takes into account the installed system price and associated costs such as financing, land, insurance, transmission, operation and maintenance, and depreciation, among other expenses. Carbon emission costs and solar panel efficiency can also be taken into account. The LCOE is a true apples-to-apples comparison. "

• The LCOE equation is an evaluation of the life-cycle energy cost and life-cycle energy production
• key factors driving LCOE for PV are system reliability,performance and lifetime; panel efficiency and capacity factor (this varies with technology type - panels used different area depending on type to get same power output)
• The LCOE is highly sensitive to small changes in input variables and underpinning assumptions. For this reason, it is important to carefully assess and validate the assumptions used for different technologies when comparing the LCOE.(Consider system life to 40 years)
• LifeTime: Silicon PV has the longest operating history of any solar cell technology.Note that most investors finance a solar system based on an assumed panel degradation rate

of 0.5 to 1.0 percent per year, a faster rate than this historical data for silicon PV might indicate.

• Figure 11 -Relative Solar Cell Conversion Efficiencies
• O&M: inverter maintenance, site related maintenance, energy production density (site size required).Higher capacity factor means reduced inverter O&M as percentage of system
• SunPower finds tracking better than fixed for utility size system

The Market Value and Cost of Solar Photovoltaic Electricity Production[edit | edit source]

Severin Borenstein,The Market Value and Cost of Solar Photovoltaic Electricity Production,University of California Energy Institute,CSEM WP 176, January 2008, pp. 1- 38^[15]

• Center for the Study of Energy Markets (CSEM) Working Paper Series
• "Proponents of solar PV panels argue, that standard analyses fail to capture the enhanced value of solar PV power that results from its temporal and locational characteristics." E.g. transmission losses reduced when distributed on-site.
• ignoring the potential savings in transmission and distribution infrastructure, will tend to undervalue the power from PV
• Environmental externalities are often cited as a reason to place greater social value on some alternative forms of electricity generation, including solar PVs
• Analysis done for 25 year production life, various interest rates, California (done for different orientations)
• Table 4: Levelized Cost and Value of Production Per MWh from 10kW Solar PV installation (parity achieved at very low interest rates)

Comparing the LCOE for various technologies - Blog Post[edit | edit source]

Solar cells with 40.7% efficiency made, 58% efficient possible, June 01, 2007^[16] "some references that compare costs of energy sources. Costs for all energy sources have a fairly large degree of variability based upon factors such as project financing (interest rates), local variables, project variables such as differences in labor and material costs. This variance is not dealt with in most analysis of costs." This source gives a list of various sources and data for comparative purposes.

Solar Energy Technologies Program[edit | edit source]

Solar Energy Technologies Program, Multi-Year Program Plan 2007 - 2011, U.S. Department of Energy, EERE,2007^[17]

• Conducted LCOE for reference cases using SAM to assess sensitivity to certain variables. Found that LCOE largely changes for reliability of modules (including degradation), inverters, and system integration/installation and efficiency and cost of the solar modules.
• Limitation that SAM is developing and inputs have uncertainty (user defined)
• Table 3.1.6-1 Impacts of Tier 1 Module Metrics on LCOE for Commercial PV Reference System (Accounts for lifetime to 35 years, reliability, performance and price)- Module performance and cost have the greatest impact on LCOE.
• Considered reference systems for residential, commercial, utility scale flat-plate, utility scale concentrating PV and off-grid residential.
• Fig. 3.1.6-10:LCOE as a function of different financed amounts and loan terms for the 2005 commercial reference system. The LCOE values given on the curves are in ¢/kWh.
• 2011 prediction is 12.6-15.4 cents/kWh for 5 types of PV(LCOE)
• Lifetime: Thin-film modules, however, have not been commercially deployed for a sufficient time for data to be collected that would support a 30-year lifetime assertion...thus the warranty is often used.

Emerging Technologies in Electricity Generation [Canada][edit | edit source]

National Energy Board, Emerging Technologies in Electricity Generation, A Market Assessment Report, March 2006, pp1-113,^[18]

• Table 1: Illustrative Power Generation Costs –Emerging Technologies and Conventional Generation- Solar PV: 200-500 $/MWh

A Financial Worksheet for Computing the Cost of Solar Electricity[edit | edit source]

A Financial Worksheet for Computing the Cost (¢/kWh) of Solar Electricity Generated at Grid Connected Photovoltaic (PV) Generating Plants J. Sol. Energy Eng. -- August 2002 -- Volume 124, Issue 3, 319 (3 pages) doi:10.1115/1.1488162^[19]

• Simple LCOE methodology and assumptions outlined

Solar photovoltaic systems: the economics of a renewable energy resource[edit | edit source]

Jean-Baptiste Lesourd,Solar photovoltaic systems: the economics of a renewable energy resource, Environmental Modelling & Software, Volume 16, Issue 2, March 2001, Pages 147-156^[20]

Abstract: This paper analyses some emerging aspects of the economics of grid-connected photovoltaic systems. While the 1997 cost of photovoltaic systems is estimated as 5.5 US$/Wp, a 1997 cost estimate for photovoltaic grid-connected electricity is (deflated terms) 0.25 or (nominal terms) 0.29 US$/kWh, for US sunbelt conditions, prevailing US capital market conditions, and an economic lifetime of 20 years. This compares to about 0.10 US$/kWh for conventional electricity production. Other estimates for are, respectively, in deflated and nominal terms and in US$/kWh, 0.30 and 0.35 (average US conditions), 0.29 and 0.33 (average Western European conditions), 0.23 and 0.27 (sunbelt European conditions), and 0.33 and 0.34 (average Japanese conditions). Assuming a longer system lifetime (30 years) lowers these costs by 15-20%. Dividing costs by 2, a reasonable future possibility, would bring them close to competitiveness. Further cost decreases, although possible, are still uncertain. The structure and future evolution of the world photovoltaic industry are also discussed.