part 5: investment and electricity cost calculation · 2013. 12. 12. · part 5: investment and...
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Part 5: Investment and Electricity Cost Calculation
Franz Trieb
MBA Energy Management, Vienna, September 9-10, 2010
Slide 2Trieb
Investment Cost Modelling
Slide 3TriebNeij 2008
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 leadto an empirical model function.
3. Each time the installed amount of a product doubles, theinvestment 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.
Learning Curves Theory
Slide 4Trieb
Equipment Cost Learning Curves
WETO 2003, NAO 2008
Slide 5Trieb
log2logPR
0
x0x P
Pcc
Cost Learning Curve Function
PR progress ratio = (1 – learning rate)Cx specific investment at point xC0 specific investment at reference point 0Px cumulated capacity at point xP0 cumulated capacity at reference point 0
Neij 2003
Slide 6Trieb
Learning Rates for Different Technologies
Neij 2008
Slide 7Trieb
Source: Greenpeace 2009 Installed Capacity (GW) Reference ScenarioYear 2005 2010 2020 2030 2040 2050 Photovoltaic 2 10 49 86 120 153Concentrating Solar 0,35 2 28 150 300 500Wind Offshore 0 1 35 110 135 160Wind Onshore 59 124 311 330 390 420Hydropower 878 989 1215 1400 1560 1710Biomass Power 21 28 52 72 86 95Geothermal Power 9 11 17 22 28 33Ocean Energy 0 0 2 4 7 9
Source: Greenpeace 2009 Installed Capacity (GW) energy (r)evolution scenarioYear 2005 2010 2020 2030 2040 2050 Photovoltaic 2 21 269 921 1800 2900Concentrating Solar 0,35 5 83 200 468 800Wind Offshore 0 1 35 110 135 160Wind Onshore 59 164 858 1512 2085 2573Hydropower 878 978 1178 1300 1443 1565Biomass Power 21 35 56 65 81 99Geothermal Power 9 12 33 71 120 152Ocean Energy 0 1 17 44 98 194
Global Capacity Projections
Greenpeace 2008
Slide 8Trieb
Photovoltaic System Cost Perspectives
0
1000
2000
3000
4000
5000
6000
2000 2010 2020 2030 2040 2050
Year
PV S
yste
m C
ost [
€/kW
p]
2009 market prices
MED-CSP 2005, LBBW 2009, ECOFYS 2009
2005 market prices
MED-CSP Scenario
Slide 9Trieb
Wind Power Investment Cost Perspectives
MED-CSP 2005, ECOFYS 2009, Lead Study 2009
0
500
1000
1500
2000
2500
3000
3500
4000
2000 2010 2020 2030 2040 2050
Year
Win
d Po
wer
Sys
tem
Cos
t [€/
kW]
OnshoreOffshore
market prices onshore
cost estimates offshore
Slide 10Trieb
Hydropower Investment Cost Perspectives
0
1000
2000
3000
4000
5000
6000
2000 2010 2020 2030 2040 2050
Year
Hyd
ropo
wer
Sys
tem
Cos
t [€/
kW]
smalllarge
ECOFYS 2009
Slide 11Trieb
Biomass Investment Cost Perspectives
ECOFYS 2009
0
500
1000
1500
2000
2500
3000
3500
2000 2010 2020 2030 2040 2050
Year
Bio
mas
s Po
wer
Sys
tem
Cos
t[€
/kW
]
Biogas Plants Large Scale Biomass
Slide 12Trieb
Geothermal Power Investment Cost Perspectives
ECOFYS 2009, own estimates
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2000 2010 2020 2030 2040 2050
Year
Geo
ther
mal
Pow
er S
yste
m C
ost
[€/k
W]
HYDRO < 2000 m HYDRO 4000 m HDR 6000 m
Slide 13Trieb
CSP Investment Cost Perspectives Year PR 2005 2015 2030 2050 UnitWorld CSP Capacity 354 5000 150000 500000 MWSolar Field 90% 360 241 144 120 €/m²Power Block 98% 1200 1111 1006 971 €/kWStorage 92% 60 44 29 25 €/kW h
0
2000
4000
6000
8000
10000
12000
2000 2010 2020 2030 2040 2050 2060Year
Spe
cific
Inve
stm
ent [
€/kW
] .
SM4SM3SM2SM1ANDASOL 1Nevada Solar 1
DLR 2009
SM = Solar Multiple1 Solar Field = 6000 m²/MW1 Storage = 6 hours (full load)
Solar Field1
Storage1
Power Block
Solar Field2
Solar Field3
Solar Field4
Storage2
Storage3
SM1 SM2 SM3 SM4
Electricity
Solar Field1
Storage1
Power Block
Solar Field2
Solar Field3
Solar Field4
Storage2
Storage3
SM1 SM2 SM3 SM4
Electricity
Slide 14Trieb
Specific Investment Cost as Function of Time
0
2000
4000
6000
8000
10000
12000
14000
16000
2000 2010 2020 2030 2040 2050
Year
Spe
cific
Inve
stm
ent [
€/kW
]
Offshore WindOnshore WindPhotovoltaicConcentrating Solar SM4Hydrothermal < 2000 mHydrothermal 4000 mHot Dry Rock 6000 mLarge HydroSmall HydroLarge Scale BiomassSmall Scale BiomassBiogas PlantsOcean Energy
Slide 15Trieb
Specific Investment Cost as Function of Time
values in €2005/kW
2000 2010 2020 2030 2040 2050Offshore Wind 2600 2100 1800 1500 1300Onshore Wind 1150 1050 950 900 850 820Photovoltaic 5500 2830 1590 1250 1010 910Concentrating Solar SM4 10920 8675 6152 4982 4640 4299Hydrothermal < 2000 m 4000 3000 2300 2100 2050 2000Hydrothermal 4000 m 5600 4300 3300 2700 2550 2500Hot Dry Rock 6000 m 14000 10000 7500 6100 5500 5000Large Hydro 2150 2300 2400 2500 2550 2600Small Hydro 3600 3900 4050 4100 4150 4200Large Scale Biomass 2400 2200 2000 1970 1950 1940Small Scale Biomass 7800 7180 6700 6350 6000 5700Biogas Plants 2800 2700 2600 2510 2430 2400Ocean Energy 3000 2500 2250 2100 2050 2000
Slide 16Trieb
Electricity Cost Modelling
Slide 17Trieb
Cel levelised cost of electricity in €/kWh in constant present monetary value
Inv investment cost in €
FCR fix charge rate as function of interest rate (i) and economic lifetime (n) in %/y
O&M net present value of annual operation, maintenance and insurance in €/y
F net present value of annual fuel cost in €/y
Eyear electricity generated per year = installed capacity (kW) annual full load hours (h/y)
yearel E
FMOFCRInvC
&
Levelised Electricity Cost Model
1)1()1(
n
n
iiiFCR
www.dlr.de/tt/trans-csp
Slide 18Trieb
Coal Price
www.oilnergy.com
Fuel Cost Perspectives?
Slide 19Trieb
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% 5000Steam Oil Plants 30 40% 1.0% 2.5% 5000Combined Cycle Natural Gas 30 48% 1.0% 2.5% 5000Wind Power 15 1.5% 2000Solar Thermal Power 40 37% 1.0% 3.0% 8000Hydropower 50 75% 3.0% 2600Photovoltaics 20 10% 1.5% 1800Geothermal Power 30 13.5% 4.0% 7500Biomass Power 30 35% 3.5% 3700* vary for different countries and sites
www.dlr.de/tt/trans-csp
Slide 20Trieb
0
10
20
30
40
50
60
70
80
90
100
2000 2010 2020 2030 2040 2050
Year
Ave
rage
Pric
e of
Oil
[$/b
bl]
Gas
[$/G
J] a
nd C
oal [
$/to
n]
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sequ
estr
atio
n Sh
are
&
Sola
r Sha
re o
f CSP
Pla
nts
Oil Price $/bbl Coal Price $/t Gas Price $/GJCSP Solar Share [%] CO2 Sequestration Share
Further Parameters for Levelised Electricity Cost Model
www.dlr.de/tt/trans-csp
Slide 21Trieb
Full Load Hours h/a 2000 2010 2020 2030 2040 2050Load 6005 6005 6005 6005 6005 6005Wind 2325 2359 2393 2427 2460 2494Photovoltaics 1353 1515 1677 1697 1707 1717Geothermal 7500 7500 7500 7500 7500 7500Biomass 2800 2800 2800 2800 4000 3500CSP Plants 1900 3500 4500 5000 5000 5000Wave / Tidal 4000 4000 4000 4000 4000 4000Hydropower 1705 1705 1705 1705 1705 1705Oil / Gas 3261 2533 2240 1787 1517 1225Oil 2458 2185 2427 1537 686 686Gas 4805 2707 2173 1856 1707 1225Coal 6202 6202 6202 6202 6202 6202Nuclear 8367 8367 8367 8367 8367 8367Import Other (incl. Sola 4920 4667 3500 2800 1333 533Import Solar HVDC) 0 0 6000 6250 7000 5625
Performance Parameter: Representative Full Load Hours
Slide 22Trieb
0
5
10
15
20
25
30
2000 2010 2020 2030 2040 2050Year
Ele
ctric
ity C
ost [
c/kW
h]
Import SolarPhotovoltaicsWindWave / TidalBiomassGeothermalHydropowerCSP PlantsCoalOilGasNuclear
Electricity Cost Learning Curves (example Spain)
www.dlr.de/tt/trans-csp
discount rate 5%/y at constant monetary value
Slide 23Trieb
Electricity Cost (Example Spain)
4.04.55.05.56.06.57.07.58.0
2000 2010 2020 2030 2040 2050Year
Ele
ctric
ityC
ost[
c/kW
h]
TRANS-CSP Mix BaU Mix 2000
€2000, Fuel Cost: IEA / WEO 2005, after 2020 CCS
Investment Phase Profit Phase
Slide 24Trieb
Allowable Cost of Different Power Segments Segment Source / Technology Min. Rev. Max. Rev.
ct/kWh ct/kWhPump Hydro StorageFuel OilGas TurbineBiomassGeothermalCSPCoal Gas Combined CycleCSPBiomassGeothermalCoal LigniteNuclearRiver Run-OffGas Combined CycleCo-generationWindPhotovoltaicsCSPGeothermal
Base Load 3 6
10 25Peak Power
Intermediate Power 5 12
DLR 2006
Slide 25Trieb
Exercise
Slide 26Trieb
Example: Load Curve in Cyprus 2007
1056
1,047
843
269
050
100150200250300350400450500550600650700750800850900950
1,0001,0501,100
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00 18.00 19.00 20.00 21.00 22.00 23.00
MW
Time of Day
Total Power Output During Days with the Highest and Lowest Demand for 2007
Power Output Dur ing Sum m er Day With Maxim um Total Generat io n (Highest Sum mer Day Deman d), Mon day 30/7/2007. Includes Cont ributions f rom Iindepe ndent Produce rsPower Output Dur ing Sum m er Day with Max im um Total Genera tion (Highest Sum mer Day Deman d), Mon day 30/7/2007. EAC Output only
Power Output Dur ing Winter Day with Maximum Tota l Generation (Highe st Winter Day Dem and), Thursday , 20/12/2007
Minimum Dema nd of the Ye ar (Mond ay, 16/4/2007)
Actu al Total Gen erat ion (MW)
Gas Turbinesfired with Diesel
Slide 27Trieb
Base Load Capacity MW 4000Base Load Annual Electricity GWh/a 30000Base Load Fuel Cost (Coal + NG + HFO) $/MWh 15,0
Medium Load Capacity MW 2500Medium Load Annual Electricity GWh/a 10000Medium Load Fuel Cost (Coal + Fuel #2) $/MWh 35,0
Peak Load Capacity MW 1000Peak Load Annual Electricity GWh/a 2000Peak Load Fuel Cost (Diesel + Fuel #2) $/MWh 60,0
Cost Escalation of Fossil Fuels %/a 1,5%Specific Power Block Investment (B+M) $/kW 1200Specific Power Block Investment (Peak) $/kW 400Project 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 0,280Reference Direct Normal Irradiance kWh/m²/y 2400CSP Progress Ratio % 88,0%Exchange Rate $/€ 1,19
Example of a typical Power Park Structure
Slide 28Trieb
0,00
0,05
0,10
0,15
0,20
0,25
0,30
0,35
0,40
2010 2020 2030 2040 2050Year
LCO
E ($
2010
/kW
h) Peak Load LCOE
Medium Load LCOE
Base Load LCOE
Average LCOE
Fuel Powered Electricity Cost Development by Sector
Slide 29Trieb
0,00
0,05
0,10
0,15
0,20
0,25
0,30
2010 2015 2020 2025 2030 2035 2040 2045 2050Year
Leve
lized
Cos
t of E
lect
ricity
.
($20
10/k
Wh)
0
200000
400000
600000
800000
1000000
1200000
Glo
bal I
nsta
lled
Cap
acity
(MW
) .
1000 824639000
95000
240000
417500
595000
772500
950000
CSP Electricity Cost Learning Curve
Slide 30Trieb
B
0,00
0,05
0,10
0,15
0,20
0,25
0,30
0,35
2010 2020 2030 2040 2050Year
LCO
E ($
2010
/kW
h)
LCOE of CSP at DNI2400 kWh/m²/a
Average LCOEwithout CSP
Break Even of Average Electricity Cost
Slide 31Trieb
0,00
0,05
0,10
0,15
0,20
0,25
0,30
0,35
2010 2020 2030 2040 2050Year
LCO
E ($
2010
/kW
h)
LCOE of CSP at DNI2400 kWh/m²/a
Peak Load LCOE
Medium Load LCOE
Base Load LCOE
Average LCOEwithout CSP
Break Even of Electricity Cost by Sector
Slide 32Trieb
0
5000
10000
15000
20000
25000
30000
2010 2020 2030 2040 2050Year
Loca
l Ins
talle
d C
apac
ity (M
W) .
Peak CSP CapacityMedium CSP CapacityBase CSP CapacityPeak Fuel CapacityMedium Fuel CapacityBase Fuel Capacity
Introduction of CSP by Sector
Slide 33Trieb
0,07
0,08
0,09
0,10
0,11
0,12
2010 2020 2030 2040 2050Year
LCO
E ($
2010
/kW
h) Average LCOEwithout CSP
Average LCOE withCSP
Average LCOE withPeak CSP
a
b
c
Additional Cost of Consumers
Slide 34Trieb
Conclusions
Slide 35Trieb
Renewable sources of electricity are very expensive, most countries are too poor to afford their marketintroduction.
The Old Paradigm
Slide 36Trieb
Renewable sources of electricity become cheaper themore they are used, while fossil fuels become moreexpensive the more they are used.
What has been overlooked:
Slide 37Trieb
A fast introduction of renewable sources of energy forpower generation is the only way to stabilize the futurecost of electricity at a relatively low level.
The New Paradigm
Slide 38Trieb
NAO 2008 The Nuclear Decommissioning AuthorityTaking forward decommissioning, London 2008http://www.nao.org.uk/publications/0708/the_nuclear_decommissioning_au.aspx
WETO 2003 European Commission Directorate-General for Research, World Energy Technology Outlook, Brussels 2003http://ec.europa.eu/research/energy/pdf/weto_final_report.pdf
Neij 2003 Neij, L., et al., Experience Curves: A Tool for Energy Policy Assessment, Lund University, European Commission, Lund 2003http://www.iset.uni-kassel.de/extool/Extool_final_report.pdf
Neij 2008 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) 2200– 2211
oilnergy 2008 www.oilnergy.com
DLR 2009 Dr. F. Trieb, C. Hoyer-Klick, Dr. C. Schillings, Global Potential of Concentrating Solar Power,SolarPaces Conference, Berlin Stuttgart 2009, www.dlr.de/tt/csp-resources
Sources and Literature
Slide 39Trieb
ECOFYS 2009 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 2006 NEEDS New Energy Externalities Developments for Sustainability, European Commission Brussels 2006, http://www.needs-project.org
greenpeace 2008 energy [r]evolution – a sustainable global energy outlook, greenpeace 2008http://www.greenpeace.org/raw/content/international/press/reports/energyrevolutionreport.pdf
DLR 2006 Trieb et al., Trans-Mediterranean Interconnection for Concentrating Solar Power, German Aerospace Center,Stuttgart 2006, http://www.dlr.de/tt/trans-csp
Sources and Literature