Yesterday
I blogged
about the DeGrussa mine PV/battery installation. I made a few simple estimates about costs,
but omitted to make an estimate of the Levelised Cost of Electricity. That’s what I’ll provide today.

The cost of the DeGrussa project is clearly stated – AUD 40 million. That buys a PV system with 10.6 MW peak power, one-axis tracking, and a battery installation that delivers 6 MW power for an unspecified amount of time.

I can estimate the annual output of the DeGrussa installation from the diesel fuel usage that has been avoided. It’s stated to be 5 million litres of fuel, thereby abating 12,000 t of CO2 emissions per year.

Here are the relevant properties of diesel fuel (data source):

The cost of the DeGrussa project is clearly stated – AUD 40 million. That buys a PV system with 10.6 MW peak power, one-axis tracking, and a battery installation that delivers 6 MW power for an unspecified amount of time.

I can estimate the annual output of the DeGrussa installation from the diesel fuel usage that has been avoided. It’s stated to be 5 million litres of fuel, thereby abating 12,000 t of CO2 emissions per year.

Here are the relevant properties of diesel fuel (data source):

- density: 0.832 kg/litre
- carbon content: 86.1%
- energy density: 35.9 MJ/litre

So
5 million litres of diesel fuel contains 179.5 × 10^12 J of chemical
energy. If the diesel engine is 38%
efficient, that would give 68.2 × 10^12 J = 18,947 MWh of electrical energy.

[To check the numbers, the 5 million litres of diesel would give rise to 5 × 10^6 × 0.832 × 0.861 × 44/12 kg of CO2, which I make to be 13,133 t CO2. Not a perfect match with the 12,000 t of CO2 abatement that is claimed in the media releases, but good enough.]

I now proceed to calculate the Levelised Cost of Electricity using my standard assumptions:

[To check the numbers, the 5 million litres of diesel would give rise to 5 × 10^6 × 0.832 × 0.861 × 44/12 kg of CO2, which I make to be 13,133 t CO2. Not a perfect match with the 12,000 t of CO2 abatement that is claimed in the media releases, but good enough.]

I now proceed to calculate the Levelised Cost of Electricity 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% rather than 3%
as in posts during 2011.

The
results for the DeGrussa installation are as follows:

Cost
per peak Watt AUD 3.77/Wp

LCOE AUD 240/MWh

The
components of the LCOE are:

Capital {0.094 × AUD 40×10

^{6}}/{18,947 MWhr} = AUD 198/MWhr
O&M {0.020 × AUD 40×10

^{6}}/{18,947 MWhr} = AUD 42/MWhr
By
way of comparison, LCOE figures (in appropriate currency per MWh) 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)

(24) USD 319 (Maryland Solar Farm, thin-film
PV, Q4 2012)

(25) EUR 207 (GERO Solarpark, Germany, PV, May
2012)

(26) AUD 259 (Kamberra Winery, Australia, PV,
June 2012)

(27) EUR 105 (Calera y Chozas, PV, Q4 2012)

(28) AUD 205 (Nyngan & Broken Hill, thin
film PV, end 2014?)

(29) AUD 342 (City of Sydney, multiple sites,
PV, 2012)

(30) AUD 281 (Uterne, PV, single-axis tracking,
2011)

(31) JPY 31,448 (Oita, PV?, Japan, to open
March 2014)

(32) USD 342 (Shams, Abu Dhabi, trough, to open
early 2013)

(34) USD 272 (Daggett, California, designed
2010)

(35) GBP 148 (Wymeswold, UK, PV, March 2013)

(36) USD 139 (South Georgia, PV, June 2014)

(37) USD 169 (Antelope Valley, CdTe PV, end
2015)

(38) AUD 137 (Mugga Lane, PV, mid 2014)

(39) AUD 163 (Coree, fixed PV, Feb 2015)

(40) AUD 298 (Ferngrove Winery, PV, July 2013)

(41) USD 125 (Cerro Dominador, CST, mid 2017)

(42) USD 190 (La Paz, PV, September 2013)

(43) USD 152 (Austin Energy, PV, 2016)

(44) AUD 304 (Weipa, PV, January 2015)

(45) AUD 256 (Kalgoorlie-Boulder, PV, August
2014)

(46) AUD 141 (new Moree Solar Farm, PV,
one-axis tracking, December 2015)

(47) AUD 184 (Brookfarm, PV, December 2015)

(48) USD 110 (Amanecer, PV, June 2014)

(49) USD 113 (DEWA, PV, April 2016)

(50) USD 284 (Ashalim, solar thermal, 2017)

(51) USD 256 (Xina Solar One, solar thermal,
2017)

(52) AUD 129 (Barcaldine, PV, one-axis, March
2017)

(53) AUD 139 (Nyngan & Broken Hill, fixed
PV, late 2015)

(54) AUD 240 (DeGrussa, PV/batteries, early
2016)

**Conclusion**

On
these numbers, the LCOE for the DeGrussa installation is quite expensive. A solar thermal installation for comparison is
Cerro Dominador, number 41 on the list above.
That has 110 MW peak power output from a heliostat/tower configuration
with dry condensers, 17.5 hours thermal storage in molten salt, and an alleged
Capacity Factor of 95%. I calculated the
LCOE for Cerro Dominador to be USD 125 per MWh (details).

I
calculate the Capacity Factor for DeGrussa to be 18,947/(10.6 × 24 × 365) =
0.204, which is not at all high for a system with one-axis tracking and a good solar resource. With PV panels, the Capacity Factor is not improved by inclusion of storage, which is a major difference to solar thermal power generation with thermal storage.

We
should of course make allowance for the fact that the Australian dollar is
falling, currently at 0.743 USD. Even
so, the estimated LCOE for DeGrussa is perhaps 30% more than I expected.