Victor Niemeyer Program Manager, Energy and Environmental Policy Analysis and Company Strategy Program EIA LCOE/LACE Workshop July 25, 2013 LCOEs and Renewables
Victor Niemeyer Program Manager, Energy and Environmental Policy Analysis and
Company Strategy Program
EIA LCOE/LACE Workshop July 25, 2013
LCOEs and Renewables
2 © 2013 Electric Power Research Institute, Inc. All rights reserved.
EPRI Generation Options Report Provides Excellent Example of LCOE Use
By Robin Bedillion of EPRI’s Strategic Energy Analysis Group
Reference: EPRI Report 1026656
(free from EPRI.com, search for “1026656”)
3 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Levelized Cost of Electricity Analysis – Objectives
• Utilize EPRI capital cost data and methodologies to calculate levelized costs of electricity (LCOEs) in constant 2011 $ – Incorporate key assumptions needed for calculations – capital cost,
fuel cost, fixed and variable O&M, fuel type and energy content, capacity factor, cost of money
• Provide a generic basis for comparison of technologies for baseload and renewable generation
• Evaluate sensitivities of LCOE to potential CO2 costs and other parameters
4 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Magnitude of Cost Estimates* can be Very Different Site Specific vs. Generic Constant $, Current $
* Data shown for illustrative purposes only
5 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Levelized Cost of Electricity Analysis – Assumptions • All baseload technologies are assumed to have an 80%
capacity factor, except for nuclear which has a 90% capacity factor.
• Non-dispatchable renewables assume a range of capacity factors based on a range of resource availability assumptions.
• No production or investment tax credits assumed for any technologies.
• No integration costs (e.g. costs associated with additional reserves, balancing, conventional generation cycling, etc.) included for non-dispatchable technologies.
6 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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lized
Cos
t of E
lect
ricity
, $/M
Wh
Cost of CO2, $/metric ton
Pulverized Coal (PC) – 2015
0.84 metric tons CO2/MWh x $100/tonne = +$84/MWh
All-in Capital Costs: $2,400-2,875/kW
Fuel Costs: $2-3/MMBtu
All costs are in constant Dec 2011$
LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report 1026656 for more details.
7 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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PC, IGCC, NGCC Comparison – 2015
IGCC
PC
NGCC
All costs are in constant Dec 2011$
LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report 1026656 for more details.
8 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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Cost of CO2, $/metric ton
Biomass – 2015
*Biomass emissions can vary significantly based on fuel source and life-cycle emission assumptions. Conventionally, the release of carbon from biogenic sources is assumed to be balanced by the uptake of carbon when the feedstock is grown, resulting in zero net CO2 emissions over some period of time.
No investment or production tax credits are assumed. CO2 emissions are assumed to be neutral*.
All-in Capital Costs: $4,150-5,250/kW
Fuel Costs: $2-6/MMBtu
All costs are in constant Dec 2011$
LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report 1026656 for more details.
9 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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Wind – 2015
No investment or production tax credits are assumed.
All costs are in constant Dec 2011$
Onshore Wind
All-in Capital Costs: $1,825-2,500/kW
Capacity Factor: 28-40%
Offshore Wind
All-in Capital Costs : $3,250-5,225/kW
Capacity Factor: 40-45%
LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report 1026656 for more details.
10 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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Cost of CO2, $/metric ton
Solar Photovoltaic (PV) – 2015
No investment or production tax credits are assumed.
All-in Capital Costs: $2,200-2,525/kW
Capacity Factor: 14-26%
All costs are in constant Dec 2011$
LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report 1026656 for more details.
11 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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PC
IGCC
NGCC
Nuclear
Biomass
Geothermal
Comparative Levelized Costs of Electricity of Dispatchable Technologies – 2015
All costs are in constant Dec 2011$
Average LCOE values based on estimated capital cost ranges.
No investment or production tax credits are assumed for any technology.
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Cost of CO2, $/metric ton LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report 1026656 for more details.
12 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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Onshore Wind
Offshore Wind
CSP
Solar PV
Comparative Levelized Costs of Electricity of Non-Dispatchable Technologies* – 2015
All costs are in constant Dec 2011$
Average LCOE values based on estimated capital cost ranges.
No investment or production tax credits are assumed for any technology.
LCOE is shown for high level comparison purposes. Actual plant investment decisions are affected by a number of other project specific considerations and caution should be used when comparing technologies based on LCOE. See Appendix A of report 1026656 for more details.
*For wind, solar PV, and CSP without storage, production is set by resource availability, not load demand. LCOE values presented here do not include integration costs (e.g. costs associated with additional reserves, balancing, conventional generation cycling, etc.). Care should be used when comparing LCOEs of these technologies to dispatchable technologies.
13 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Observations on Value of Wind and Solar
Victor Niemeyer
14 © 2013 Electric Power Research Institute, Inc. All rights reserved.
AWS Truepower Data Set: Capturing the Location and Variability of Wind
• AWS Truepower wind data – Based on actual 1997-2012
meteorology
– Provides simulated hourly output for typical turbines (80/100m height, 1.5-2.0 MW)
• Identified 5300+ “utility-scale” sites – Exclusion areas
– 100 MW site minimum
– Distance to grid
– Terrain/wake effects
15 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Location of wind resource by state and CF
New England Mid-Atlantic
S-Atlantic NE-Central
SE-Central NW-Central
SW-Central Texas
Mountain Pacific
California
Potential Capacity (MW)
MAMENHVTN
YPAMDNCSCVAILINM
IOHW
IWVALG
AMSTNIAKSM
NMONDNESDARLAO
KTXAZCOIDMTNMNVUTW
YORW
ACA
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10,000
20,000
30,000
40,000
50,000
60,000
70,000
Capacity Factor (CF)
16 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Site Capacity Factors Drive Average Costs of Generation; Distance to Grid is Secondary
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Site
CO
E ($/
MW
h)
Site Capacity Factor (%)
Wind Generation Costs by Capacity Factor
17 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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Cost
of E
lect
ricity
($/M
Wh)
Wind TWh (million MWh)
2007 Combined On- and Off-shore Wind Generation Supply
EPRI Wind Resource Assessment from Truepower Shows Vast Generation Potential
Total U.S. Gen in 2007
2007 Gen by Coal
Cost to generate a MWh from wind (no tax credits)
18 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Considerable Year-to-year Variation in National Wind Energy Supply
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lect
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Wh)
Wind TWh (million MWh)
Combined On- and Off-shore Wind Generation Supply for Selected Years
2007 Generation Cost
1998 (worst)
12 Yr Avg
2008 (best)
19 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Example Analysis for NW-Central Region
• State hourly load data for 2007 from Energy Velocity
• Hourly loads and wind output synchronized so driven by same 2007 meteorology
• Add 50 GW new installed wind capacity within region
• Rank sites by capacity factor, build best sites first
NW-Central
20 © 2013 Electric Power Research Institute, Inc. All rights reserved.
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100,000
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NWC Time Series from 8/9/07 to 8/16/07 w 50 GW Added
Wind
NWC Load
Anti-correlation of Wind with Load Creates Ramping Issues (50 GW example)
The morning up-ramp
The evening down-ramp
21 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Anti-correlation of Wind with Load Also Forces Diminishing Returns to Wind Additions: 100 GW
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NWC Time Series from 8/9/07 to 8/16/07 w 100 GW Added
Wind
NWC Load
More wind than load produces local surplus that must be spilled or exported
22 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Modeling Provides Preliminary Realistic Assessment of Wind’s Strategic Potential
Mix of wind and transmission investment and operating decisions to minimize cost of delivering wind to serve load
• Simultaneous regional 8760 hourly loads and potential wind for 2007
• Existing mix of generation and transmission capability
• New wind turbine costs
• New transmission costs
Pacific
California
Mountain
Texas
NW-Central
SW-Central
NE-Central
M-Atlantic
S-Atlantic
SE-Central
Florida
NE
1.6
1.4
4.1 2.4
2.0
3.6
3.9
3.5
3.3 1.4
5.9 4.1
5.2
2.8
2.4
2.8
4.4
4.0
1.3
2.9 0.5
0.5
0.0
0.4 0.6
1.0
2.6
1.5
5.2
3.5
9.7
1.6
7.9 6.6
Summer Capacity in GW (source: EPA)
REGEN Optimization
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National Wind Energy Potential Supply Curves* (including delivery costs)
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Cos
t of E
lect
ricity
($/M
Wh)
New
Tra
nsm
issi
on L
ine
Mile
s (th
ousa
nds)
Delivered Cost with Existing Transmission
Generation Cost
Cost Delivered to Load with New Transmission
Transmission Line Miles
*EPRI – AWS TruePower National Wind Energy Supply Curves
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Following Example Shows Similar Diminishing Returns for Large Penetrations of Solar
• Same NW-Central region (MN, ND, SD, KS, IA, NE, MO)
• Hourly loads from Energy Velocity
• Solar and wind shapes from AWS Truepower
• Plots show net load with additions of 0 to 20 GW of solar PV
• Sensitivity case shows 20 GW of PV with 20 GW of wind
25 © 2013 Electric Power Research Institute, Inc. All rights reserved.
2007 Peak Day Net Load with No Solar PV (Reference Case)
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Loa
d W
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NW-Central Week of 8/5/2007 with 0 GW PV
Net Load-NW-Central
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Peak Day Net Load with 5 GW of Solar PV (peak and energy reduction)
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Peak Day Net Load with 10 GW of Solar PV (peaks getting “spiky”)
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Peak Day Net Load with 15 GW of Solar PV (no further peak reduction)
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29 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Peak Day Net Load with 20 GW of Solar PV
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30 © 2013 Electric Power Research Institute, Inc. All rights reserved.
High Penetration of Wind and Solar Lead to Extreme Variability and Limited Peak Synergy
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31 © 2013 Electric Power Research Institute, Inc. All rights reserved.
Observations
• LCOEs useful for ball park estimates of costs, but numerous embedded assumptions mean “caveat user”
• Wind and solar provide “shaped energy” whose value can be usefully summarized by LACE, but diminishing returns to wind/solar at policy-relevant levels of penetration means LACE estimates are not constants
• Good reasons for using power system simulation models in policy analysis (e.g., NEMS, IPM, US-REGEN, Haiku)
• LCOE, LACE, and the simulation models aren’t perfect
• But they all can be useful
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Together…Shaping the Future of Electricity