Friday, March 4, 2011

Two ideas to reduce Levelized Cost of PV electricity down to 5 or 8 cents per kilowatt-hour

Recently, two institutes published their own ideas to reduce the levelized cost of photovoltaic electricity (LCOE of PV) down to 5 or 8 cents per kilowatt-hour. Targets are achievable NOW or in the NEAR future! (Yes, we don't have wait so long for technological break-through.)
In comparison, the average retail price of electricity to residential sector in 2010 was 11.63 cents per kilowatt-hour (US EIA, 2011a).


(1) GW Solar Institute: LCOE of PV = 5 ¢/kWh, NOW!
Ken Zweibel from "GW Solar Institute" based in the George Washington University in Washington, DC, does not agree with assumptions about PV panel's lifespan. Although the inverters need periodic managements and replacements, PV's durability will ensure 100 years' operation, although energy conversion efficiency might drop to 50~80% of its initial condition eventually.
He computes that the 100-year-lifespan can bring down the current LCOE of 20-year-lifespan PV, which is 16 cents per kilowatt-hour, down to 5 cents per kilowatt-hour (at 0% discount rate).
Actually, even 53-year-lifespan is enough to match PV's LCOE with that of nuclear power plants and 42-year-lifespan can achieve PV's LCOE parity with coal power, assuming 3% fuel cost inflation per year.


(2) Rocky Mountain Institute: LCOE of PV = 8 ¢/kWh, in the NEAR future!
In terms of PV's lifespan, researchers from the "Rocky Mountain Institute" are not so ambitious as Zweibel. They assume 25-30 years for that. Instead, they propose so-called "systems approach" to reduce "Balance of system" (BoS) costs (all costs except the PV module) in three areas such as:
(1) physical system design
(2) business process
(3) industry scale
If their recommendations are readily implemented, up to 50% of the BoS costs can be saved right away, they argue.
With regard to LCOE only, by optimizing the physical system design, LCOE of PV drops to 8 cents per kilowatt-hour (7.8 ¢/kWh, to be exact). (LCOE of PV is estimated to be 22 cents per kilowatt-hour n North California where San Francisco or famous Napa-Sonoma wine counties lie in.)
The optimization includes:
(a) improved electrical system efficiency reaching 94%
(b) 25-year-lifespan inverters
(c) reduced BoS capital costs
(d) reduced module costs
In addition to the lower LCOE, RMI argues that minimizing cost and uncertainty of business processes and ensuring PV industry's rapid growth and maturation will low-cost large-scale solar industry.
Although they admit this proposal requires dedicated efforts across the value chain, they repeatedly declare it is attainable "in the short term."


Here are my thoughts.
(1) From February 2010 to February 2011, the uranium spot price (U3O8) jumped from low-40 dollars per pound to around 70 dollars. (Ux, 2011)
(2) From beginning to end of 2010, NYMEX coal futures settlement price jumped from 51 dollars per ton to 80 dollars. (US EIA, 2011b)
I'm not saying the prices are too high now. I'm saying fuel price of conventional "base load power" is too volatile.
Since solar power as as stable as it gets, we should find ways to make the above-mentioned ideas into reality.


Sources:


Bony, L., Doig, S., Hart, C., Maurer, E., & Newman, S. (2010). Achieving Low-Cost Solar PV: Industry Workshop Recommendations for Near-Term Balance of System Cost Reductions. Snowmass, CO: Rocky Mountain Institute. [Full-text available at http://www.rmi.org/Content/Files/BOSReport.pdf]


Zweibel, K. (2010). Should solar photovoltaics be deployed sooner because of long operating life at low, predictable cost? Energy Policy, 38(11), 7519-7530. http://dx.doi.org/10.1016/j.enpol.2010.07.040

U.S. Energy Information Administration. (2011a). Electric Power Monthly, February 2011 Edition (DOE/EIA-0226 (2011/02)). Retrieved March 4, 2011 from http://www.eia.gov/cneaf/electricity/epm/epm_sum.html

U.S. Energy Information Administration. (2011b). NYMEX Central Appalachian Coal Futures Near-Month Contract Final Settlement Price History. Retrieved March 4, 2011 from http://www.eia.doe.gov/cneaf/coal/page/nymex/nymex_historical.html

The Ux Consulting Company. (2011). Weekly Spot Ux U3O8 Price. Retrieved March 4, 2011 from http://www.uxc.com/review/uxc_Prices.aspx

3 comments:

  1. I recommend the Wiley book entiitled Solar Cells and Their Applications, 2nd Edition published in Oct 2010. It discusses solar PV economics along with technology with near term retail price of solar electriciy in SW US at 8 to 9 cents per kWh through straigh forward technical improvements and scaled up production including manufacturing, assembly, and installation jobs in USA.

    ReplyDelete
  2. Regarding GW Solar institute "Although the inverters need periodic managements and replacements" The modern transformer less inverters are now guaranteed to last more than 20 years so the BoS costs and maintenance costs will come down further to improve LCoE. Most people just use the life of Solar PV as just 20 years and down play solar when comparing with Coal and claim that it is intermittent with low capacity factor. Solar PV on rooftop is generation at the point of use and there is no Transmission distribution losses and this with the SMART grid will improve the system performance and reduce costs. In places with good sunshine with Sun tracking we could achieve close to 35% Capacity factor from Solar PV. The CPV with some thermal storage improves on continuity of supply.

    ReplyDelete
  3. Thank you for sharing valuable information. Nice post. I enjoyed reading this post.
    Solar Panels For Home Installation
    Solar Las Vegas

    ReplyDelete