Tuesday, May 3, 2011

Cost of solar power (8)

After a long search, I’m able to provide an analysis of a recent US-based PV project.  Financial data is not generally publicly provided with US projects, and without such data I can’t estimate the cost per peak Watt and the Levelised Electricity Cost (LEC).

The project is by the Public Service Company of New Mexico (PNM), with solar panels by Arizona-based First Solar.  The first stage opened on 25 April 2011 and is based in Albuquerque, with 2 MW capacity from 30,000 CdTe thin-film panels over a ground area of 8.1 Ha.  None of the press reports I read mentioned anything about tracking of the sun, and the few published photographs I saw indicated that the panels were fixed.

According to press reports, PNM plans to launch four further projects by the end of the year, making five PV plants in total with combined output 22 MW, costing USD 102 million, producing 51 GWhr of electricity per year and "saving 44 million pounds of CO2 emissions”.   This indicates a CO2 emission intensity of 19.96 million kg CO2 per 51 GWhr, or 391 kg CO2 per MWhr.  That’s surprisingly low, but would be consistent with existing generation plant with substantial amounts of natural gas and nuclear, as is the case with PNM:

“PNM is a significant owner of the San Juan generation facility, a coal fired plant located near Farmington, New Mexico, and a 10% owner in the Palo Verde Nuclear Generating Facility near Phoenix, AZ. PNM also owns and operates several natural gas fired plants throughout the state of New Mexico including Reeves Generating Station in Albuquerque, most of which are used to meet additional demand for electricity in the summer months.”

New Mexico state law requires local electricity utilities like PNM to have 10% of the energy output from renewable resources by the end of 2011.  This requirement will increase to 20% by 2020.

The cost metrics are evaluated under my usual 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 (3% of the total project cost), and
·         government subsidies are neglected.

The results are:

Cost per peak Watt USD 4.64/Wp
LEC                            USD 248/MWhr

The components of the LEC are:
Capital           {0.094× USD 102×106}/{51×103 MWhr} = USD 188/MWhr
O&M              {0.030× USD 102×106}/{51×103 MWhr} = USD 60/MWhr

The cost per tonne of CO2 emissions reduced is {0.094 + 0.03} × USD 102×106/19960 tonnes = USD 634 / tonne. That’s high because the existing emissions intensity, as claimed, is low.

By way of comparison, here are my LEC figures for all projects I’ve investigated:

Cost of solar power (2): AUD 199/MWhr (Nyngan, Australia, PV)
Cost of solar power (3): EUR 547/MWhr (Olmedilla, Spain, PV)
Cost of solar power (3): EUR 205/MWhr (Andasol I, Spain, trough)
Cost of solar power (4): AUD 257/MWhr (Greenough, Australia, PV)
Cost of solar power (5): AUD 432/MWhr (Whyalla, Australia, dish)
Cost of solar power (6): USD 177/MWhr (Lazio, Italy, PV)
Cost of solar power (7): AUD 295/MWhr (Kogan Creek, Australia, CLFR pre-heat)
Cost of solar power (8): USD 248/MWhr (New Mexico, CdTe thin film PV)

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