Part 5: Investment and Electricity Cost Calculation

Transcription

1 Part 5: Investment and Electricity Cost Calculation Franz MBA Energy Management, Vienna, September 9-10, 2010 Folie 1 Vortrag > Autor > Dokumentname > Datum

2 Investment Cost Modelling Slide 2

3 Learning Curves Theory 1. Capital goods become cheaper due to mass production, larger units, advances in research & development and increasing competition. 2. There is no scientific model but a lot of experience that lead to an empirical model function. 3. Each time the installed amount of a product doubles, the investment cost goes down by a rate of X% (learning rate). 4. If one assumes an expansion rate of a product with time, one can model the progress of investment cost declination of a product over time. 5. Investments are often given in constant monetary value, inflation has to be added if time scales are introduced. Neij 2008 Slide 3

4 Equipment Cost Learning Curves WETO 2003, NAO 2008 Slide 4

5 Cost Learning Curve Function c x c 0 P P x 0 logpr log2 PR progress ratio = (1 learning rate) C x specific investment at point x C 0 specific investment at reference point 0 P x cumulated capacity at point x P 0 cumulated capacity at reference point 0 Neij 2003 Slide 5

6 Learning Rates for Different Technologies Neij 2008 Slide 6

7 Global Capacity Projections Source: Greenpeace 2009 Installed Capacity (GW) Reference Scenario Year Photovoltaic Concentrating Solar 0, Wind Offshore Wind Onshore Hydropower Biomass Power Geothermal Power Ocean Energy Source: Greenpeace 2009 Installed Capacity (GW) energy (r)evolution scenario Year Photovoltaic Concentrating Solar 0, Wind Offshore Wind Onshore Hydropower Biomass Power Geothermal Power Ocean Energy Greenpeace 2008 Slide 7

8 Photovoltaic System Cost Perspectives PV System Cost [ /kwp] market prices 2009 market prices MED-CSP Scenario Year MED-CSP 2005, LBBW 2009, ECOFYS 2009 Slide 8

9 Wind Power Investment Cost Perspectives Wind Power System Cost [ /kw] cost estimates offshore market prices onshore Year Onshore Offshore MED-CSP 2005, ECOFYS 2009, Lead Study 2009 Slide 9

10 Hydropower Investment Cost Perspectives Hydropower System Cost [ /kw] Year small large ECOFYS 2009 Slide 10

11 Biomass Investment Cost Perspectives Biomass Power System Cost [ /kw] Year Biogas Plants Large Scale Biomass ECOFYS 2009 Slide 11

12 Geothermal Power Investment Cost Perspectives Geothermal Power System Cost [ /kw] Year HYDRO < 2000 m HYDRO 4000 m HDR 6000 m ECOFYS 2009, own estimates Slide 12

13 CSP Investment Cost Perspectives Year PR Unit World CSP Capacity MW Solar Field 90% /m² Power Block 98% /kw Storage 92% /kwh Specific Investment [ /kw] SM4 SM3 SM2 SM1 ANDASOL 1 Nevada Solar 1 SM1 SM2 SM3 SM4 Solar Field 1 Power Power Block Block Solar Field Solar Field Solar Field Storage 1 Storage 2 Storage 3 Electricity Year SM = Solar Multiple 1 Solar Field = 6000 m²/mw 1 Storage = 6 hours (full load) DLR 2009 Slide 13

14 Specific Investment Cost as Function of Time Specific Investment [ /kw] Year Offshore Wind Onshore Wind Photovoltaic Concentrating Solar SM4 Hydrothermal < 2000 m Hydrothermal 4000 m Hot Dry Rock 6000 m Large Hydro Small Hydro Large Scale Biomass Small Scale Biomass Biogas Plants Ocean Energy Slide 14

15 Specific Investment Cost as Function of Time Offshore Wind Onshore Wind Photovoltaic Concentrating Solar SM Hydrothermal < 2000 m Hydrothermal 4000 m Hot Dry Rock 6000 m Large Hydro Small Hydro Large Scale Biomass Small Scale Biomass Biogas Plants Ocean Energy values in 2005 /kw Slide 15

16 Electricity Cost Modelling Slide 16

17 Levelised Electricity Cost Model C el Inv FCR O E year & M F FCR (1 i) (1 i) n n i 1 C el levelised cost of electricity in /kwh in constant present monetary value Inv investment cost in FCR O&M F E year fix charge rate as function of interest rate (i) and economic lifetime (n) in %/y net present value of annual operation, maintenance and insurance in /y net present value of annual fuel cost in /y electricity generated per year = installed capacity (kw) annual full load hours (h/y) Slide 17

18 Fuel Cost Perspectives? Coal Price Slide 18

19 Parameters for Levelised Electricity Cost Model Economic Life years Efficiency % * Fuel Price Escalation % Operation & Maintenance % of Inv./y Annual Full Load Hours hours/year* Steam Coal Plants 40 40% 1.0% 3.5% 5000 Steam Oil Plants 30 40% 1.0% 2.5% 5000 Combined Cycle Natural Gas 30 48% 1.0% 2.5% 5000 Wind Power % 2000 Solar Thermal Power 40 37% 1.0% 3.0% 8000 Hydropower 50 75% 3.0% 2600 Photovoltaics 20 10% 1.5% 1800 Geothermal Power % 4.0% 7500 Biomass Power 30 35% 3.5% 3700 * vary for different countries and sites Slide 19

20 Further Parameters for Levelised Electricity Cost Model % 90 90% Average Price of Oil [$/bbl] Gas [$/GJ] and Coal [$/ton] % 70% 60% 50% 40% 30% 20% Sequestration Share & Solar Share of CSP Plants 10 10% Year Oil Price $/bbl Coal Price $/t Gas Price $/GJ CSP Solar Share [%] CO2 Sequestration Share 0% Slide 20

21 Performance Parameter: Representative Full Load Hours Full Load Hours h/a Load Wind Photovoltaics Geothermal Biomass CSP Plants Wave / Tidal Hydropower Oil / Gas Oil Gas Coal Nuclear Import Other (incl. Sola Import Solar HVDC) Slide 21

22 Electricity Cost Learning Curves (example Spain) Electricity Cost [c/kwh] Year discount rate 5%/y at constant monetary value Import Solar Photovoltaics Wind Wave / Tidal Biomass Geothermal Hydropower CSP Plants Coal Oil Gas Nuclear Slide 22

23 Electricity Cost (Example Spain) Electricity Cost [c/kwh] Investment Phase Profit Phase Year TRANS-CSP Mix BaU Mix , Fuel Cost: IEA / WEO 2005, after 2020 CCS Slide 23

24 Allowable Cost of Different Power Segments Segment Source / Technology Min. Rev. Max. Rev. ct/kwh ct/kwh Peak Power Pump Hydro Storage Fuel Oil Gas Turbine Biomass Geothermal CSP Coal Gas Combined Cycle Intermediate CSP Power Biomass 5 12 Geothermal Coal Lignite Nuclear River Run-Off Base Load Gas Combined Cycle Co-generation Wind Photovoltaics CSP Geothermal 3 6 DLR 2006 Slide 24

25 Exercise Slide 25

26 Example: Load Curve in Cyprus ,100 1,050 1, W550 M Total Power Output During Days with the Highest and Lowest Demand for , Time of Day 843 Power Output During Sum mer Day With Maximum Total Generatio n (Highest Sum mer Da y Deman d), Mon day 30/7/2007. Includes Cont ributions f rom Iindepe ndent Produce rs Power Out put Dur ing Sum m er Day wit h Max im um Total Genera tion (Highest Sum mer Day Demand), Monday 30/7/2007. EAC Output only Power Out put Dur ing W int er Day with Maximum Tota l Generation (Highe st W int er Day Demand), Thursday, 20/12/2007 Minimum Demand of the Ye ar (Monday, 16/4/2007) Actual Total Generation (MW) Gas Turbines fired with Diesel Slide 26

27 Example of a typical Power Park Structure Base Load Capacity MW 4000 Base Load Annual Electricity GWh/a Base Load Fuel Cost (Coal + NG + HFO) $/MWh 15,0 Medium Load Capacity MW 2500 Medium Load Annual Electricity GWh/a Medium Load Fuel Cost (Coal + Fuel #2) $/MWh 35,0 Peak Load Capacity MW 1000 Peak Load Annual Electricity GWh/a 2000 Peak Load Fuel Cost (Diesel + Fuel #2) $/MWh 60,0 Cost Escalation of Fossil Fuels %/a 1,5% Specific Power Block Investment (B+M) $/kw 1200 Specific Power Block Investment (Peak) $/kw 400 Project Rate of Return % of Inv./a 10,0% O&M Rate % of Inv./a 2,5% Fuel Efficiency Base & Medium Load % 35,0% Fuel Efficiency Peak Load % 30,0% Reference LCOE of CSP in 2010 $/kwh 0,280 Reference Direct Normal Irradiance kwh/m²/y 2400 CSP Progress Ratio % 88,0% Exchange Rate $/ 1,19 Slide 27

28 Fuel Powered Electricity Cost Development by Sector 0,40 0,35 0,30 LCOE ($2010/kWh) 0,25 0,20 0,15 0,10 Peak Load LCOE Medium Load LCOE Base Load LCOE Average LCOE 0,05 0, Year Slide 28

29 CSP Electricity Cost Learning Curve 0, Levelized Cost of Electricity. ($2010/kWh) 0,25 0,20 0,15 0,10 0, , Global Installed Capacity (MW). Year Slide 29

30 Break Even of Average Electricity Cost 0,35 0,30 LCOE ($2010/kWh) 0,25 0,20 0,15 0,10 B LCOE of CSP at DNI 2400 kwh/m²/a Average LCOE without CSP 0,05 0, Year Slide 30

31 Break Even of Electricity Cost by Sector LCOE ($2010/kWh) 0,35 0,30 0,25 0,20 0,15 0,10 LCOE of CSP at DNI 2400 kwh/m²/a Peak Load LCOE Medium Load LCOE Base Load LCOE 0,05 0, Year Average LCOE without CSP Slide 31

32 Introduction of CSP by Sector Local Installed Capacity (MW) Peak CSP Capacity Medium CSP Capacity Base CSP Capacity Peak Fuel Capacity Medium Fuel Capacity Base Fuel Capacity Year Slide 32

33 Additional Cost of Consumers 0,12 0,11 a LCOE ($2010/kWh) 0,10 0,09 0,08 b c Average LCOE without CSP Average LCOE with CSP Average LCOE with Peak CSP 0, Year Slide 33

34 Conclusions Slide 34

35 The Old Paradigm Renewable sources of electricity are very expensive, most countries are too poor to afford their market introduction. Slide 35

36 What has been overlooked: Renewable sources of electricity become cheaper the more they are used, while fossil fuels become more expensive the more they are used. Slide 36

37 The New Paradigm A fast introduction of renewable sources of energy for power generation is the only way to stabilize the future cost of electricity at a relatively low level. Slide 37

38 Sources and Literature NAO 2008 WETO 2003 Neij 2003 Neij 2008 oilnergy 2008 DLR 2009 The Nuclear Decommissioning Authority Taking forward decommissioning, London European Commission Directorate-General for Research, World Energy Technology Outlook, Brussels Neij, L., et al., Experience Curves: A Tool for Energy Policy Assessment, Lund University, European Commission, Lund Neij, L., Cost development of future technologies for power generation A study based on experience curves and complementary bottom-up assessments, Energy Policy 36 (2008) Dr. F., C. Hoyer-Klick, Dr. C. Schillings, Global Potential of Concentrating Solar Power, SolarPaces Conference, Berlin Stuttgart 2009, Slide 38

39 Sources and Literature ECOFYS 2009 NEEDS 2006 Krewitt, W., Nienhaus, K., Klessmann, K., et al. Role and Potential of Renewable Energy and Energy Efficiency for Global Energy Supply, Stuttgart, Berlin, Utrecht, Wuppertal 2009 NEEDS New Energy Externalities Developments for Sustainability, European Commission Brussels 2006, greenpeace 2008 energy [r]evolution a sustainable global energy outlook, greenpeace DLR 2006 et al., Trans-Mediterranean Interconnection for Concentrating Solar Power, German Aerospace Center,Stuttgart 2006, Slide 39