Tuesday, April 24, 2012

Cost of solar power (23)

It’s said, and I see no reason to doubt it, that data centres chew up a lot of power.  I understand that industry giants like Apple and Google address their carbon footprints with solar installations and energy-efficient design.  In Australia, NEXTDC is building a fleet of data centres and aspires to lead Australia’s information and communication sector in solar and energy efficiency.  To this end, they are installing rooftop PV systems, using tri-generation plant and incorporating special design features to provide cooling for banks of computers.

The NEXTDC data centre at Port Melbourne is due to be operational in Q2 2012.  The power requirement is 12 MW and overall area of the facility is 17.5 Ha.  According to this article, the overall system cost is AUD 1.2 million and the PV panels for the data centre will have output of 400 kW peak and 550 MWhr annually.  The solar electricity will replace fossil fuel generation that would have caused 670 t CO2 per year. 

(A brief note of explanation about CO2 emissions – most electricity used in Melbourne is generated from brown coal power stations in the Latrobe Valley, some 100-150 km to the east.  These power stations have shocking CO2 emissions.  On the numbers given above, the emissions intensity would be 670/550 = 1.218 t CO2 per MWhr.  I don’t dispute the numbers.)

I now evaluate the LCOE using my customary 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 are:

Cost per peak Watt              AUD 3.00/Wp
LCOE                                     AUD 249/MWhr

The components of the LCOE are:

Capital           {0.094 × AUD 1.2 × 10^6}/{550 MWhr} = AUD 205/MWhr
O&M              {0.020 × AUD 1.2 × 10^6}/{550 MWhr} = AUD 44/MWhr

By way of comparison, LCOE figures (in appropriate currency per MWhr) 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)

[Note: all estimates made using 2% annual maintenance cost.]

The Capacity Factor for the NEXTDC installation is 550/(0.4×24×365) = 0.157.  That’s quite good, very good even, considering that the weather in Melbourne is regarded scornfully by most Australians (apologies to my Melbourne friends!) and the average daily insolation is only around 15 MJ per m^2.  At the moment, I don’t have information about the type of panels and whether they are fixed; I’ll update this post if I find out.

At AUD 249/MWhr, the LCOE for the NEXTDC system is the best for all installations I have analysed recently except for Crescent Dunes (a utility-scale storage-equipped solar thermal installation in the USA).

I calculate the cost of CO2 abatement as AUD 249×550/670 = AUD 204/t CO2 abated, about 20-25% of the cost of abatement for Kagoshima as I blogged yesterday.  (But note my comments earlier about how Melbourne gets its electricity!)

Monday, April 23, 2012

Cost of solar power (22)

Today is a special day for me.  I’m being interviewed by a reporter for the New Matilda magazine, who is writing a series of studies entitled “a day in the life of ….”  His study at the moment is on the solar energy industry in Australia, with me as the subject.  As part of the day, I’ll prepare this blog post on my favourite topic – the cost of solar power.

The utility-scale project I’ll analyse is the Kagoshima Nanatsujima Mega-Solar Power Plant, to be built at the southern tip of the island of Kyushu in southern Japan.  The project is the result of collaboration between three large agencies – Kyocera Corporation (solar cell manufacturer, construction and maintenance), IHI Corporation (lease of the land and subsequent operation) and Mizuho Corporate Bank (financing).  Another four entities will assist with financing.

As the project information reports:

“Expectations and interest in solar energy have heightened to a new level in Japan with the planned July 1 start of a revamped feed-in tariff (FIT) program and the need to resolve power supply issues caused by the effects of the Great East Japan Earthquake.  Under these circumstances the three companies have reached this basic agreement as they believe that it is their corporate responsibility to proactively tackle environmental problems.”

The project will involve 290,000 Kycera multicrystalline solar modules with a total peak output of 70 MW.  Although it is not clear from the documentation, I’m assuming this is AC output at grid voltage.  The project descriptions I read are not specific as to whether the PV panels will be fixed or tracking, but, whatever, the area of the site is 127 Ha, or approximately 27 baseball stadiums.

 The 70 MW peak output corresponds to almost 40% of the total amount of public/industrial solar power equipment shipped domestically in Japan in 2011.  The annual output is estimated to be 79 GWhr per year, enough for 22,000 average households, and will offset approximately 25,000 t of CO2 per year.  Construction is due to start in July 2012.

The project cost is estimated at 25 billion Yen.

I now evaluate the LCOE using my customary 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 and Cost of solar power (10).  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.

The results are:

Cost per peak Watt              JPY 357/Wp
LCOE                                     JPY 36,076/MWhr

The components of the LCOE are:

Capital           {0.094 × JPY 25 × 10^9}/{79,000 MWhr} = JPY 29,747/MWhr
O&M              {0.020 × JPY 25 × 10^9}/{79,000 MWhr} = JPY 6,329/MWhr
 
By way of comparison, LCOE figures (in appropriate currency per MWhr) 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)

[Note: all estimates made using 2% annual maintenance cost.]

The Kagoshima LCOE of JPY 36,076/MWhr converts to USD 444/MWhr and EUR 337/MWhr at current exchange rates (1 USD = JPY 81.24, 1 EUR = JPY 106.92).  That is high compared to other recent projects I have analysed.  This is even more remarkable in view of the sunny location in southern Kyushu, where the insolation would presumably be much higher than in northern Germany.  A recent project for comparison would be Meuro in northern Germany, number (17) above, for which the LCOE is EUR 228/MWhr.

The Capacity Factor for the Kagoshima plant would be 79,000/(70×24×365) = 0.129, not especially high, and leading me to suspect the PV panels will be fixed.

I calculate the cost of CO2 abatement as JPY 36,076×79,000/25,000 = JPY 114,000/t CO2 abated, or USD 1,403/t CO2 or EUR 1,066/t CO2.  That is expensive abatement!

Footnote: the deadline for the New Matilda article is 15 May 2012, so it would presumably appear around the end of May.  Access to the site (not pay-walled) is at www.newmatilda.com.

Tuesday, April 10, 2012

Cost of solar power (21)

I have wanted for some time to analyse the Levelised Cost of Electricity (LCOE) for a utility-scale solar project in Asia.  Until now, I couldn’t find suitable data for an analysis, but that has changed (at least to some extent) with data available for the 125 MW Shivajinagar Sakri solar PV plant in India.

The tender document for the first 25 MW module of the plant is available at the Maharashtra Generation Company’s web site (www.mahagenco.in/NIT-Format25MW.pdf), and some details below will be quoted from an article by Sarosh Bana in Volume 13, Issue 1 of renewable energy focus.

The plant will be built in Dhule in the northern part of Maharashtra state in India.  Five generation blocks will be constructed, each of 25 MW.  Three blocks will be built using crystalline silicon panels and the other two will use thin film panels.  At an estimated 17% capability factor for what should be a very sunny location, the project will deliver 186,150 MWhr per year.

According to Bana, the EPC tender from Mahagenco determines the capital cost of the project to be EUR 1.78 million per MW.  If so, the cost would be EUR 222.5 million.  Here, however, the data becomes contradictory because there is an official report from the German government concerning the loan agreement:

“To promote development of renewable energy in India, the German Government-owned development bank KfW signed a Loan Agreement worth EUR 250 million (approximately Rs 1,600 Crore) with the Government of India on 24 August 2011 …

The concessional loan will finance a 125 MW solar PV power plant to be constructed by MAHAGENCO at Shivajinagar, Sakri, in the Dhule district of Maharashtra with the option for further expansion by 25 MW.  Sakri Solar Power Plant will be the largest of its kind in the world.  Its total costs are estimated at EUR 370 million (Rs 2,370 Crore) and will be funded by the loan amount from KfW and the Maharashtra state government’s contribution.  The loan carries a concessional interest rate, with a 12 year repayment period, including a two year moratorium.  The power plant is due to be commissioned by March 2012.”

So the money is available, helped enormously by a generous loan from the German government, and the plant will presumably be built.  But what is the actual cost?  In the absence of further information, let me use the figure of EUR 370 million.

I now evaluate the LCOE using my customary 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 and Cost of solar power (10).  Note that I am now using annual maintenance costs of 2% rather than 3% as in posts during 2011.

The results are:

Cost per peak Watt              EUR 2.96/Wp
LCOE                                     EUR 227/MWhr

The components of the LCOE are:
Capital           {0.094 × EUR 370 × 10^6}/{186,150 MWhr} = EUR 187/MWhr
O&M              {0.020 × EUR 370 × 10^6}/{186,150 MWhr} = EUR 40/MWhr

By way of comparison, LCOE figures (in appropriate currency per MWhr) 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, 2012)
(21)      EUR 227 (Shivajinagar Sakri, India, 2012)

[Note: all estimates made using 2% annual maintenance cost.]

This LCOE for the Shivajinagar plant seems reasonable in comparison with recent utility-scale PV plants in Europe, e.g. Meuro (number 17 above).  If I had used the lower figure of EUR 222.5 million as indicated by the tender document, the LCOE figure would have been EUR 137/MWhr, which I think is too good to be true.