Environmental Engineering Reference
In-Depth Information
since, as noted in the discussion of CSP with storage, the total System LCOE
(SLCOE) would be a better measure, even though it is more dif
cult to evaluate.
Up-front capital costs are high, and comprise the largest component of total
costs: they include the power generating unit and civil work, i.e. the building of the
dam itself and its associated components (penstock and racetail, possible access
road and electricity lines to connect the system to the general grid). Table
2
offers
some data drawn from a large sample of installations in operation around the world.
The broad range of values re
ects the disparity of local and project conditions, as
noted. The price of 1 kW for large systems may run from a low of USD 1,050 to a
high of 4,200 or, in some extreme cases, as much as 7,600. For small developments
the range is similar, although the absolute values are slightly higher (1,300
5,000,
-
and 8,000 in extreme cases). This also re
ects the lack of sizeable economies of
scale. It is noticeable that for developing countries smaller developments may even
reach a low of USD 500/kW, which is indeed low, and may help off-grid electricity
deployment with the help of other renewables such as solar, wind and biomass.
O&M costs, in contrast, make up only a small fraction of total costs. Project lead
times are long (typically 7
-
8 years), which places strong constraints on the
nancing of projects (see, for example, [
7
]). This must be balanced against the long
lifecycle of these systems, which can reach 70
90 years, with no need for signif-
icant refurbishment. This long life span also has a bearing on the calculation of
LCOE. The standard discounting method makes all data beyond, say, 30
-
40 years
basically irrelevant. Added to a potentially incorrect and overestimated discount
rate, this may yield excessively high, incorrect LCOE values (see the Appendix for
further discussion on this point). Table
1
presents recent estimates of LCOE from a
large sample of working installations. The results can be remarkably low for small
and large systems alike, depending presumably on the speci
-
c site, with
gures as
low as USD 0.02/Wh. But there is a broad range, as noted, and the
gure can reach
0.13 for small designs (or even 0.27 for very small ones) and 0.19 for larger
systems. There are many factors to be factored into the equation before a
nal
verdict can be given on the pro
tability of any speci
c project, depending on
speci
c and local conditions, as noted previously. Upgrading and refurbishing may
be very low, from USD 0.01
gures for upgrading must be
assessed in conjunction with other potential environmental and social costs.
Because of local conditions at each speci
0.05/Kwh. These low
-
c site and other local costs, which may
vary considerably, the price range of projects is broad, so additional care must be
put into assessing the data presented in Tables
1
and
2
or in any other report. In fact,
up to three quarters of the total investment costs, or even more, may be driven by
site-speci
c conditions. Proper site selection and scheme design are therefore key
issues, since they can avoid expensive mistakes [
7
]. It must also be remarked that
economies of scale may be relevant at small sizes, say up to 50 or 100 kW, but are
less so beyond that point [
1
]. There are no extensive data records available, so no
learning rate can safely be estimated. But given the maturity of the technology, no
signi
cant cost reduction is expected; indeed, in many countries the contrary may
occur, since the best sites are likely to have been developed already.
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