Environmental Engineering Reference
In-Depth Information
proposed renewable power generation projects, from a wide range of data sources
all over the world [
18
23
]. Other sources which are more comprehensive but based
on estimations, or are more speci
-
c, have also been considered [
8
,
29
,
41
]. As a
nal point, most results presented are valid at a given moment in time, and with this
eld developing so rapidly some forecasts or projections are inevitable if the
analysis is not soon to become outdated. The discussion in the
nal section, based
on observed past trends, comments and opinions of market participants as reported
in recent enquiries, is intended to
ll that gap.
The next section presents the cost measures used in the paper and analyses them
in some detail. The LCOE in particular is considered in greater depth in an
Appendix as well. Section
3
is the main section of the paper: it reports the results
for the six technologies considered: Concentrated Solar Power, Solar Photo Voltaic,
Wind power, Hydropower, Biomass power and Geothermal. Some assessments of
future deployments and cost reductions are discussed for each one. Section
4
brie
y
outlines the main results and addresses the assessment of future trends in the market
and different technologies. Although it is necessarily somewhat tentative, an
attempt has been made to base it on a detailed analysis of each technology and the
interrelations that will derive from them. In particular, it is observed that the very
concept of individual costs will be superseded by joint evaluation. An appendix that
addresses the LCOE measure in some detail, a list of acronyms used in the report
and a list of bibliographical references close the chapter.
2 Measures of Costs
Cost measures are obviously relevant in the
nancial analysis of any proposed
investment, and more so when investments are not competitive at market prices, as
is the case of most renewable energies today (though this is quickly changing).
Consequently, the proposed investment will usually require some kind of public
support in one way or another. When technologies are competitive in market
conditions other measures may be considered, such as the net rate or return, etc. At
the precompetitive stage, however, cost measures are highly relevant in order to
assess the distance to
or competitiveness in broad terms, and to make
comparisons between several technologies. This is the purpose of the main cost
measures considered in practice by almost all market players. There are several
possible cost measures, each with its own merits and pitfalls but all with their
insights for speci
'
grid-parity
'
c purposes. And while there is no single clear, general measure of
cost, it suf
ces for them to be properly understood and used for the speci
c end for
which they were designed.
At this point a digression is in order concerning measures of cost, depending on
the type of literature source considered. In much of the academic work published,
researchers tackle this issue by taking into account two fundamental, related
questions: the value of the CO
2
avoided -especially for renewable technologies-,
and the costs of grid integration. The former is generally considered to be relevant
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