TODAY’S STUDY: THE COST OF NEW ENERGY
Study: Levelized Cost of Electricity/Renewable Energies
May 2012/May 2013 (Fraunhofer Institute for Solar Energy Systems ISE)
This study analyses the current levelized cost of electricity (LCOE) using technology-specific system designs and system prices for the second quarter of 2012, for the following renewable energy technologies: photovoltaics, concentrating solar power plants (CSP, also called solar thermal power plants) and wind power plants. The different cost trends for these techno- logies are also compared.
The LCOEs allow a comparison of energy generation technologies on the basis of weighted average costs. Different technologies can be compared and do not have to be equated with the level of the feed-in tariff. The true value of energy is defined by the daily fluctu- ations in supply and demand and cannot be captured in the LCOE.
This updated version (2012) of the study on the “Levelized costs of electricity - renewable energies” from December 2010 incorporates current cost trends from the last two years (Kost and Schlegl, 2010). The standard financing costs and risk premiums for the market are covered in more detail in this version and are calculated individually for each technology and country. This allows for a realistic comparison of power plant locations, technology risks and cost trends. The level of finan- cing costs has a considerable influence on the LCOE and on the competitive capacity of a technology.
This has to be taken into account when comparing the 2010 study with the current version. The LCOE have been recalculated using current, spe- cific investments. The study models future cost trends based on market growth and observed learning curves, thus allowing conclusions to be drawn regarding the competitive capacity of the individual technologies.
The following energy generation technologies will be inves- tigated and evaluated in terms of the current level of LCOE for a variety of different size layouts and under the conditions pertaining at locations in Europe (Germany, France, Spain) and North Africa:
Photovoltaic installations – multicrystalline silicon (PV)
-Small installations installed on the roof (up to 10 kWp) – PVSmall
-Large installations installed on the roof (up to 1000 kWp) – PVLarge
-Ground-mounted installations (larger than 1000 kWp) – PVGround
For the PV installations, locations in Germany were investiga- ted with 1100 to 1300 kWh/m² per year of horizontal solar irradiance in relation to a PV module in optimum orientation. Locations in France with 1700 kWh/m², in Spain with 2000 kWh/m² and in North Africa with 2500 kWh/m² per year were also analysed.
Large Concentrating Solar Power Plants (CSP)
-Parabolic trough power plants (100 MW) with and without heat storage tank –
-Parabolic Power plants with Fresnel technology (100 MW) - Fresnel „
-Tower power plants (100 MW) with heat storage tank - Tower
As CSP power plants can only be used to generate energy if there is a high level of direct radiation, the analysis focuses on the locations in Spain (2000 kWh/m²year) and North Africa (2500 kWh/m²year).
Wind Power plants
-Onshore (2 - 3 MW) „
-Offshore (3 - 5 MW) „
The operation of onshore wind power plants in central Europe with 1300 to 2700 full-load hours per year and offshore wind power plants in the North Sea with 2800 to 4000 full-load hours per year are considered.
Figure 1 shows a comparison of the current LCOE in the first half of 2012 for new installations using the renewable energies under consideration and for conventional energy ge- neration using fossil fuels. For all technologies, the project- specific location conditions are a key factor in determi- ning the level of LCOE.
At locations with 1300 kWh/m²year of solar irradiance (typical irradiance on a PV installation with optimum orientation in southern Germany), the LCOE are between 0.14 and 0.16 euro/kWh for small PV installations and between 0.13 and 0.14 euro/kWh for ground-mounted PV installations. Depen- ding on the structure, size and location of the installation, the LCOE for PV installations reach 0.10 euro/kWh for ground- mounted PV installations with 2000 kWh/m²year of irradi- ance. The LCOE using PV therefore fall below the end customer energy price (0.253 euro/kWh, BmWi 2012) not only in regions with very high levels of irradiance, but also in germany.
At locations with good wind conditions, wind power plants are competitive compared to conventional power plants. The LCOE for onshore wind power plants are current- ly between 0.06 and 0.08 euro/kWh and are therefore within the range of conventional power plants (hard coal, lignite, nuclear power).
Despite higher full-load hours of 3200 to 4000 hours annually, the LCOE for offshore wind power plants, at almost 0.11 to 0.16 euro/kWh, are higher than onshore power plants. The reasons for this are that offshore power plants are more expensive to install and have higher opera- ting and financing costs.
The LCOE for solar thermal power plants (Concentrating Solar Power – CSP) at locations with an annual direct normal irradiance (DNI) of 2000 kWh/m²year are bet- ween 0.18 and 0.24 euro/kWh. A considerable reduction in costs in recent years has given PV installations a cost advan- tage over CSP plants at the same location.
The advantage of being able to store and regulate the energy produced by CSP plants has not been considered. The advan- tages for wind power plants in terms of a higher number of full-load hours, particularly for offshore power plants, are also not captured in the LCOE. However, the ability to store energy and the full-load hours do play an important role in the long-term development of energy systems.
LCOE forecast up to 2030
For the purpose of the market forecast, three global market scenarios for the years 2012 to 2030 are investigated and presented for each of the renewable energy technologies (PV, CSP, wind). These reference scenarios help to assess the future market and cost trends of each of the technologies, taking into consideration further reductions in costs. Reductions in costs can be achieved throughout the entire value added chain, such as during the production of system components, when constructing or installing the system and by increasing the level of efficiency.
Provided the learning rates of PV systems and PV modules remain the same in future (15-20% if the installed system capacity doubles, which corresponds to a progress ratio of 80-85%), the LCOE of future installations will decrease dis- proportionately in comparison to CSP power plants and wind power plants (Figure 2 and 3). As early as 2022, ground- mounted PV installations in Germany will therefore be able to reach similar cost levels as conventional, fossil fuel power plants, as the latter will increase to an average of 0.08 euro/ kWh in this period, according to data from the 2011 BMU Leitstudie (BMU 2012) (Figure 3).
As a comparison, Figure 2 shows the cost forecast for the solar technologies in Spain, as an example of a location with significantly higher irradiance than Germany. Despite higher irradiance (based on mixed-source energy in Germany) PV in- stallations do not reach the same level as conventional power plants earlier due to the current financing conditions in Spain.
CSP power plants achieve significantly smaller cost decreases due to their weak market growth and lower learning rates.