EPRI assesses status of 8 key power generation technologies for US; estimates of capital cost and levelized cost of electricity
19 July 2011
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| Comparative levelized cost of electricity in 2025 ($/MWh) at different CO2 prices. Source: EPRI. Click to enlarge. |
The Electric Power Research Institute (EPRI) released a report, Integrated Generation Technology Options on the cost, performance, and technology status for eight central-station power generation technologies likely to dominate the US generation mix over the next two decades: pulverized coal; integrated gasification combined-cycle (IGCC); natural gas combined-cycle (NGCC); nuclear; biomass; wind; solar photovoltaic (PV); and concentrating solar thermal generation technologies from the near term to 2025. For the report, central-station generation refers to >100 MW, with the exception of some renewable-resource-based technologies.
The report presents an overview of each technology, including current and projected performance and costs (capital and levelized cost of electricity); major technical issues and future development direction and trends; fuel resource considerations; business issues; and environmental concerns and considerations. Representative costs are reported in constant December 2010 US dollars. The levelized cost of electricity (LCOE) represents an annualized cost of generating electricity over the lifetime of the unit, including initial capital, return on investment, and costs of operation, fuel and maintenance. LCOE calculations are based on assumptions regarding future unit operations, operating costs, fuel prices, financing terms, and inflation.
The report does not include tax credits and loan guarantees in the estimates of capital and LCOE, with the exception of accelerated depreciation under the US Internal Revenue Service Modified Accelerated Capital Recovery System (MACRS).
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| Representative Cost and Performance of Power Generation Technologies (2015). Source: EPRI. Click to enlarge. |
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| Representative Cost and Performance of Power Generation Technologies (2025). Source: EPRI. Click to enlarge. |
Uncertainty in planning for new power generation technologies is currently affected by several key factors, the report notes:
- the recession and its impacts on electricity demand;
- capital cost uncertainties surrounding the various technologies;
- uncertainty regarding potential carbon legislation;
- the profound impact of the shale gas boom on present and future natural gas prices; and
- impacts on existing generating plants from pending or anticipated environmental rules on emissions, use of water resources, and coal ash handling and disposal.
In terms of overall trends, the report notes:
Coal-based new power generation capacity additions have slowed due to uncertainty surrounding potential future carbon legislation, technical and economic feasibility of CO2 emissions capture and storage, new emissions controls regulations, and increasing capital costs.
Planning for new nuclear generation continues, but faces challenges in financing stemming from high capital costs, long lead times in licensing and construction, and rising cost projections.
Natural gas combined cycle generation appears to be poised for significant growth over the next decade as aging coal units are retired and confidence in shale gas resource estimates and lower gas price projections increases.
New capacity addition in the renewable sector also faces challenges due to the economic downturn and the difficulty arranging for financing, as well as the uncertainty regarding passage of a federal renewable energy standard. However, despite a slowdown in 2010, onshore wind generation growth continues at a significant pace and is beginning to play a more important role in the electricity supply in some regions.
Solar thermal and photovoltaic (PV) technology have experienced increased activity, but the magnitude of total capacity additions are still quite limited, making up less than 1% of US electric sector generation.
Biomass technology deployment has slowed due to in part to concerns with pending regulation on industrial boiler environmental control technology.
Although renewable technologies are a growing fraction of the generation technology mix largely due to government incentives and regulatory requirements, the issue of their integration on a much larger scale in the utility system is only beginning to be addressed.
The report delivers generic information and estimates, and is not tailored to site-specific studies, EPRI notes. However, it does provide baseline information with appropriate qualitative references to site-specific conditions that may have an impact on the estimate.
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| The capital cost learning curve. Source: EPRI. Click to enlarge. |
The analysis is based on 2010 EPRI research results and updates a November 2009 assessment.
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Wow, this will take a read through the entire report to even begin to understand the assumptions they're making. For example, did they assume a 10 year life cycle for the solar or a 25 year? Did they assume that no new legislation would be passed that would stop the destruction of Mountains in West Virgina for mining coal?
The assumptions determine the outcome of the study. The politics determine the assumptions.
Posted by: DaveD | 19 July 2011 at 09:12 AM
The report claims that the cost of producing electricity from wind turbines will be the same in 2025 as it is in 2010. That is BS. The cost of producing electricity by wind turbines has dropped some 80% in the past 30 years and that trend is going to continue as this industry grows in scale and its wind turbines get more efficient and drop in price.
Also the report claims nuclear energy will cost the same in 2025 as it does today. Well, Fukushima just proved that even a modern nuclear power plant is far from being safe. Future nuclear plants will be far more expensive in order to comply with higher safety levels or there will be many new accidents like Fukushima.
For western countries the future belongs to inexpensive gas power plants in combination with on-shore wind power that will reduce the need to burn gas. That combination will prove to be the most cost efficient.
However, I am afraid that coal power will also be used big time in developing countries like China and this is the only reason that the war on Global Warming is as good as lost. The climate will get much warmer for future generations and the poles will melt completely. Man will survive because we can adapt but for many other species the only hope of surviving will be in the zoos of wealthy nations.
Posted by: Account Deleted | 19 July 2011 at 12:02 PM
Fukushima isnt a modern design there are very few modern nuke plants in the world. Fact is if it had been a modern design it wouldnt have failed. Japan held for too much faith in its workers and depended far too much on them unlike modern designs and as a result BLAMMO.. Ironic realy as thats what made chernobyl fail also.
Posted by: wintermane2000 | 19 July 2011 at 01:23 PM
Chernobyl was a graphite rod design that should have never been built in the first place.
Posted by: SJC | 19 July 2011 at 03:01 PM
NGCC looks like the near-term future for of power generation, certainly in North America. If I'm running an electric utility, why would I build a coal or nuclear plant given the uncertainties?
Longer term, LFTRs (liquid floride thorium reactors) may be the low cost as well as green option, assuming they are ever built and prove out.
Posted by: Nick Lyons | 19 July 2011 at 04:23 PM
Perfect study. It would be good to have direct link. Existing seems to be broken.
Henrik,
German madness about nuclear stinks. Merkel's bet on Russian gas seems suspicious. I expect repetition of oil scenario.
"The cost of producing electricity by wind turbines has dropped some 80% in the past 30 years and that trend is going to continue as this industry grows in scale and its wind turbines get more efficient and drop in price."
How it come??? When??? Where I can by wind turbine at 1000 $/kWh which I was able to make 20 years ago??? Please give me reference.
Posted by: Darius | 20 July 2011 at 01:11 AM
For a starter try Wikipedia
http://en.wikipedia.org/wiki/Wind_power#Cost_trends
and then
http://www.climate-connect.co.uk/Home/?q=node/867
China is down to $493/kW but that figure is biased as the Yuan is undervalued. Moreover, Chinese wind turbines are not as efficient as Western turbines at 2000 USD per kW. However, sub 1000 USD per kW at higher capacity factors than today’s western on-shore wind turbines is a certainty by 2025.
Merkel is right. She is effectively preventing a 100 billion USD disaster from happening in Germany. Also in Europe we need a prosperous and stable Russia and buying their gas is another benefit from dropping nuclear power in Europe. Europe is also developing new sources for gas by opening new import terminals for LNG, new pipes from Norway and Russia and by initiating shale-gas drilling in EU countries like Poland. No single source is going to dictate anything for Europe.
Posted by: Account Deleted | 20 July 2011 at 02:16 AM
Henrik,
Actual investment cost of new wind turbine projects in Europe is over 2000 EUR/kWh. In case 1000 USD/KWh wind power would be competitive on power exchange. Thats why I am insisting study quite precise indication of current trends.
I know you as a strong proponent of natural gas and I am not going to discuss once more. At least I do not like putting all eggs in one basket. What for now 70% of Europes NG market is in one basket. Some countries have even 100% dependency. As for prosperous Russia - it is O.K. for me. Even I would be happy with that. But good oil income an price never guaranteed prosperity and peacefulness. US government studies shows that it goes in opposite directions.
As for nuclear: IMHO in course of time antinuclear will fade in Germany as it happened once.
Posted by: Darius | 20 July 2011 at 04:32 AM
To download report, try this link:
http://my.epri.com/portal/server.pt?space=CommunityPage&cached=true&parentname=ObjMgr&parentid=2&control=SetCommunity&CommunityID=404&RaiseDocID=000000000001022782&RaiseDocType=Abstract_id
Posted by: NorthernPiker | 20 July 2011 at 06:17 AM
To download report, click on the given link and then click on newsroom.
(Sorry, I do not seem to be able to post link directly.)
Posted by: NorthernPiker | 20 July 2011 at 06:20 AM
There are other wildcards. The water extracted after fraccing is heavily loaded with salt and toxic materials like barium and strontium. If discharge is restricted or prohibited, drilling will get much more expensive or shut down entirely.
That's one of the few bright spots.Merkel is silly.
- There is zero potential for an earthquake/tsunami hitting any German nuclear plant.
- The problems of the Dai'ichi plant were not even shared by the Onagawa plant down the coast (which became a refugee center despite being hit by waves just as high); modern passively-safe designs are immune to the failure cascade because they don't need electric power for cooling.
- Merkel's panic means electric prices in Germany will rise steeply, cutting into Germany's economic edge. Ironically, Germans will be using plenty of nuclear power regardless; it will just profit France and the Czechs.
Eliminating nuclear power was a bad idea before, and it's still a bad one.This is about profits from projects like Nordstream, the climate suffered by the rest of the world be damned.
Posted by: Engineer-Poet | 20 July 2011 at 07:04 AM
Wind power cost will go down (again) in the next 20+ years, and so will Solar power and probably even more so. Much higher efficiency (50+%) wide spectrum solar panels and lower cost batteries will make small domestic solar power plants affordable by 2020+. Multiplied by many millions, domestic solar power plants will play a major role in the future. It is already taking an increasing share of the energy market in China, Spain and other sunny places. Their progression will no be linear.
Posted by: HarveyD | 20 July 2011 at 07:57 AM
EPRI’s very conservative 2015 estimate of $242 to $455 per MWh for the LCOE of Solar PV is based on a 20-year 9% ROI rate – half the investment being equity at 11% and the other half debt at 7%. The variance in LCOE values is dependent on a location’s solar flux. For a residential homeowner in the US financing a solar PV system with a 6% mortgage, the LCOE would range from $136 to $255 per MWh, all other assumptions being the same as EPRI’s.
At a marginal 40% tax rate, the effective mortgage rate is 3.6%. Solar cells degrade at the rate of 0.25 to 0.5 % per year, or about 0.4% per year. According to EIA, electricity rates for the last 20 years have increased annually by an average of 2%. So, factoring in the annual degradation and rate increases, the grid electricity cost savings need to be able to finance a 20-year loan at a 2% (3.6% + 0.4% - 2%) interest rate.
For a 20-year loan at 9% and 2%, the capital payback is 9.13 and 16.35 years, respectively. Using the factor of 0.56 (9.13 / 19.35), the homeowners LCOE would be $136 to $255 per MWh, or 13.6¢ to 25.5¢ / kWh. If grid rates are more than his LCOE, the homeowner would get a net positive financial ‘return’, or tax free savings over 20 years.
For PGE residential customers in California, the tiered electricity rates begin at 12¢ / kWh for the base amount of usage and increase to 14¢, 30¢ and 34¢ / kWh, which kick in at 100%, 130% and 200% of a skimpy base usage. These rates will certainly encourage the installation of solar PV, particularly if any EVs are being charged at home.
Posted by: NorthernPiker | 20 July 2011 at 11:15 AM
The study is completely wrong not only by some percent but by factors.
Fact is, that in germany already Photovoltaik is being built at a cost of 1700Euro=2400Dollar this year 2011. see e.g. http://www.photon.de/news_archiv/details.aspx?cat=News_Archiv&sub=Praxis&pub=1&parent=3249. So we have today lower cost study predicts for 2025. Considering the price decrease of PV by factor of 2.5 in the last 10 years which all of you readers can e.g. find out from reading Wikipedia 20 minutes you will know that this study is pure politics and has nothing to do with facts, economics or technology. The coal and nuclear guys are same type like mainframe IBM guys 25 years ago predicting that PC can never replace mainframes. Totally ignorant in regards to technical and economic progress and trying to prevent progress by lobbying and faking studies.
Posted by: Henning Reich | 23 July 2011 at 07:12 AM
"Faking studies"? You mean, like Michael Dittmar's fake study claiming that uranium was about to run out? That one had holes you could drive a truck through, starting with the fact that uranium prices (both spot and futures) were quite moderate when he wrote, and continue to be.
How do you heat your home on winter nights with a PV-dependent grid?
Posted by: Engineer-Poet | 25 July 2011 at 03:50 AM
The life expectancy of wind and solar is two to three times the observed operational life reducing the imputed cost of these sytems, immensely. Instead of being tripple or quadrupple the cost, it reduced them to only double the cost of ohter generation methods.
Proving once agasin that: Figures don't Lie but LIARS can figure.
For the next 25 years, we are much better off with NGCC, IGCC, and Nuclear electric generation. All will cleanse the environment over the present installed base, and provide the least cost and most eficiency for the capital expended.
Posted by: ExDemo | 31 July 2011 at 01:03 PM
I think Merkel is right. She is effectively preventing a 100 billion USD disaster from happening in Germany.get your ex back !venapro reviews
Posted by: Account Deleted | 05 August 2011 at 11:52 PM