lcoe and the crickets

Its so quiet here, back to the crickets...



I will say I have started work on the EVM LCOE (levelised cost of energy) and I have been getting interesting results that I will have to go back and check. Choosing a 30 year life of plant I get an optimistic scenario of $74 per MWHr which is very, very competitive. To give you an idea, that is roughly the same as the best case scenario for new on-shore wind power. There are lots of assumptions there, including maintenance estimates that I think may be on the low side, but hey, these should have come from GE (the turbine provider), and they should know...

But when I extended the life of plant out to 50 years (EVM is suggesting a plant life of 75 years but its too far out for planning purposes, in my opinion), the LCOE inexplicably goes up to $82. I can only assume this is because the US government rapid depreciation for solar was assumed to be over 5 years and that advantage runs out early. Anyway, with the assumptions I have, the LCOE will be streets ahead of other solar projects, mostly because of the high capacity factor, best case assumed to be 63%. I have obtained info that estimates that current US PV projects have capacity factors between 22% and 33% and CSP plants of 28% to 55%, which are about right. Anyway, its a work in progress and I will keep you posted.

I am also expecting SUT (solar updraft tower) power to be competitive with new coal-fired power, I just need to find some recent heat rate figures before I can do that one.

FYI, levelised cost of energy is the cost of energy when the net present value (NPV) of the project is zero. There are lots of assumptions and anyone can make just about any project look good depending on what assumptions they use, so caveat emptor is the phrase of the day. I guess that is why due diligence is so important.