LCOEs and Renewables Victor Niemeyer Program Manager, Energy and Environmental Policy Analysis and Company Strategy Program

Transcription

1 LCOEs and Renewables Victor Niemeyer Program Manager, Energy and Environmental Policy Analysis and Company Strategy Program EIA LCOE/LACE Workshop July 25, 2013

2 EPRI Generation Options Report Provides Excellent Example of LCOE Use By Robin Bedillion of EPRI s Strategic Energy Analysis Group Reference: EPRI Report (free from EPRI.com, search for ) 2

3 Levelized Cost of Electricity Analysis Objectives Utilize EPRI capital cost data and methodologies to calculate levelized costs of electricity (LCOEs) in constant 2011 $ Incorporate key assumptions needed for calculations capital cost, fuel cost, fixed and variable O&M, fuel type and energy content, capacity factor, cost of money Provide a generic basis for comparison of technologies for baseload and renewable generation Evaluate sensitivities of LCOE to potential CO 2 costs and other parameters 3

4 Magnitude of Cost Estimates* can be Very Different Site Specific vs. Generic Constant $, Current $ * Data shown for illustrative purposes only 4

5 Levelized Cost of Electricity Analysis Assumptions All baseload technologies are assumed to have an 80% capacity factor, except for nuclear which has a 90% capacity factor. Non-dispatchable renewables assume a range of capacity factors based on a range of resource availability assumptions. No production or investment tax credits assumed for any technologies. No integration costs (e.g. costs associated with additional reserves, balancing, conventional generation cycling, etc.) included for non-dispatchable technologies. 5

6 Pulverized Coal (PC) All costs are in constant Dec 2011$ Levelized Cost of Electricity, $/MWh metric tons CO 2 /MWh x $100/tonne = +$84/MWh All-in Capital Costs: $2,400-2,875/kW Fuel Costs: $2-3/MMBtu Cost of CO 2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report for more details. 6

7 PC, IGCC, NGCC Comparison All costs are in constant Dec 2011$ Levelized Cost of Electricity, $/MWh IGCC PC NGCC Cost of CO 2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report for more details. 7

8 Biomass All costs are in constant Dec 2011$ Levelized Cost of Electricity, $/MWh All-in Capital Costs: $4,150-5,250/kW Fuel Costs: $2-6/MMBtu No investment or production tax credits are assumed. CO 2 emissions are assumed to be neutral*. *Biomass emissions can vary significantly based on fuel source and life-cycle emission assumptions. Conventionally, the release of carbon from biogenic sources is assumed to be balanced by the uptake of carbon when the feedstock is grown, resulting in zero net CO 2 emissions over some period of time Cost of CO 2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report for more details. 8

9 Wind 2015 Levelized Cost of Electricity, $/MWh Offshore Wind All-in Capital Costs : $3,250-5,225/kW Capacity Factor: 40-45% Onshore Wind All-in Capital Costs: $1,825-2,500/kW Capacity Factor: 28-40% No investment or production tax credits are assumed. All costs are in constant Dec 2011$ Cost of CO 2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report for more details. 9

10 Solar Photovoltaic (PV) All costs are in constant Dec 2011$ Levelized Cost of Electricity, $/MWh All-in Capital Costs: $2,200-2,525/kW Capacity Factor: 14-26% No investment or production tax credits are assumed Cost of CO 2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report for more details. 10

11 Comparative Levelized Costs of Electricity of Dispatchable Technologies 2015 Levelized Cost of Electricity, $/MWh All costs are in constant Dec 2011$ PC IGCC NGCC Nuclear Biomass Geothermal 20 0 Average LCOE values based on estimated capital cost ranges. No investment or production tax credits are assumed for any technology Cost of CO 2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report for more details. 11

12 Comparative Levelized Costs of Electricity of Non-Dispatchable Technologies* 2015 Levelized Cost of Electricity, $/MWh *For wind, solar PV, and CSP without storage, production is set by resource availability, not load demand. LCOE values presented here do not include integration costs (e.g. costs associated with additional reserves, balancing, conventional generation cycling, etc.). Care should be used when comparing LCOEs of these technologies to dispatchable technologies. All costs are in constant Dec 2011$ Onshore Wind Offshore Wind CSP Solar PV 20 0 Average LCOE values based on estimated capital cost ranges. No investment or production tax credits are assumed for any technology Cost of CO 2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report for more details. 12

13 Observations on Value of Wind and Solar Victor Niemeyer 13

14 AWS Truepower Data Set: Capturing the Location and Variability of Wind AWS Truepower wind data Based on actual meteorology Provides simulated hourly output for typical turbines (80/100m height, MW) Identified utilityscale sites Exclusion areas 100 MW site minimum Distance to grid Terrain/wake effects 14

15 Location of wind resource by state and CF 70,000 60,000 50,000 Potential Capacity (MW) 40,000 30,000 20,000 10,000 Capacity Factor (CF) NM NV UT WY OR WA CA Pacific California IA KS MN MO ND NE SD AR LA OK TX AZ CO ID MT Texas Mountain 15 SW-Central IL IN MI OH WI WV AL GA MS TN SE-Central NW-Central MA ME NH VT NY PA MD NC SC VA S-Atlantic NE-Central - New England Mid-Atlantic

16 Site Capacity Factors Drive Average Costs of Generation; Distance to Grid is Secondary $200 Wind Generation Costs by Capacity Factor $180 $160 Site COE ($/MWh) $140 $120 $100 $80 $60 $40 $20 $- 0% 10% 20% 30% 40% 50% 60% Site Capacity Factor (%) 16

17 EPRI Wind Resource Assessment from Truepower Shows Vast Generation Potential Cost of Electricity ($/MWh) $400 $350 $300 $250 $200 $150 $ Combined On- and Off-shore Wind Generation Supply 2007 Gen by Coal Total U.S. Gen in 2007 $50 $0 Cost to generate a MWh from wind (no tax credits) ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Wind TWh (million MWh) 17

18 Considerable Year-to-year Variation in National Wind Energy Supply $400 Combined On- and Off-shore Wind Generation Supply for Selected Years $350 Cost of Electricity ($/MWh) $300 $250 $200 $150 $100 $50 $ Generation Cost 1998 (worst) 12 Yr Avg 2008 (best) 0 1,000 2,000 3,000 4,000 5,000 6,000 Wind TWh (million MWh) 18

19 Example Analysis for NW-Central Region State hourly load data for 2007 from Energy Velocity NW- Central Hourly loads and wind output synchronized so driven by same 2007 meteorology Add 50 GW new installed wind capacity within region Rank sites by capacity factor, build best sites first 19

20 Anti-correlation of Wind with Load Creates Ramping Issues (50 GW example) 100,000 NWC Time Series from 8/9/07 to 8/16/07 w 50 GW Added 90,000 80,000 The morning up-ramp The evening down-ramp 70,000 60,000 MW 50,000 40,000 Wind NWC Load 30,000 20,000 10,000-20

21 Anti-correlation of Wind with Load Also Forces Diminishing Returns to Wind Additions: 100 GW 100,000 90,000 80,000 NWC Time Series from 8/9/07 to 8/16/07 w 100 GW Added More wind than load produces local surplus that must be spilled or exported 70,000 60,000 MW 50,000 40,000 Wind NWC Load 30,000 20,000 10,000-21

22 Modeling Provides Preliminary Realistic Assessment of Wind s Strategic Potential Simultaneous regional 8760 hourly loads and potential wind for 2007 Existing mix of generation and transmission capability New wind turbine costs New transmission costs California Pacific Summer Capacity in GW (source: EPA) REGEN Optimization Mountain Mix of wind and transmission investment and operating decisions to minimize cost of delivering wind to serve load Texa s NW-Central SW-Central NE-Central SE-Central M-Atlantic S-Atlantic Florid a N E 22

23 National Wind Energy Potential Supply Curves* (including delivery costs) Cost of Electricity ($/MWh) $400 $350 $300 $250 $200 $150 $100 $50 Delivered Cost with Existing Transmission Cost Delivered to Load with New Transmission Transmission Line Miles Generation Cost New Transmission Line Miles (thousands) $ ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Wind TWh (million MWh) *EPRI AWS TruePower National Wind Energy Supply Curves 23

24 Following Example Shows Similar Diminishing Returns for Large Penetrations of Solar Same NW-Central region (MN, ND, SD, KS, IA, NE, MO) Hourly loads from Energy Velocity Solar and wind shapes from AWS Truepower Plots show net load with additions of 0 to 20 GW of solar PV Sensitivity case shows 20 GW of PV with 20 GW of wind 24

25 2007 Peak Day Net Load with No Solar PV (Reference Case) 60 NW-Central Week of 8/5/2007 with 0 GW PV MW Load Wind, and PV (GW) Net Load-NW-Central 0 25

26 Peak Day Net Load with 5 GW of Solar PV (peak and energy reduction) 60 NW-Central Week of 8/5/2007 with 5 GW PV MW Load Wind, and PV (GW) Net Load-NW-Central 0 26

27 Peak Day Net Load with 10 GW of Solar PV (peaks getting spiky ) 60 NW-Central Week of 8/5/2007 with 10 GW PV MW Load Wind, and PV (GW) Net Load-NW-Central 0 27

28 Peak Day Net Load with 15 GW of Solar PV (no further peak reduction) 60 NW-Central Week of 8/5/2007 with 15 GW PV MW Load Wind, and PV (GW) Net Load-NW-Central 0 28

29 Peak Day Net Load with 20 GW of Solar PV 60 NW-Central Week of 8/5/2007 with 20 GW PV MW Load Wind, and PV (GW) Net Load-NW-Central 0 29

30 High Penetration of Wind and Solar Lead to Extreme Variability and Limited Peak Synergy 60 NW-Central Week of 8/5/2007 with 20 GW PV & 20 GW Wind MW Load Wind, and PV (GW) Net Load-NW-Central 0 30

31 Observations LCOEs useful for ball park estimates of costs, but numerous embedded assumptions mean caveat user Wind and solar provide shaped energy whose value can be usefully summarized by LACE, but diminishing returns to wind/solar at policy-relevant levels of penetration means LACE estimates are not constants Good reasons for using power system simulation models in policy analysis (e.g., NEMS, IPM, US-REGEN, Haiku) LCOE, LACE, and the simulation models aren t perfect But they all can be useful 31

32 Together Shaping the Future of Electricity 32