445 research outputs found
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Benchmarking Utility-Scale PV Operational Expenses and Project Lifetimes: Results from a Survey of U.S. Solar Industry Professionals
This paper draws on a survey of solar industry professionals and other sources to clarify trends in the expected useful life and operational expenditure (OpEx) of utility-scale photovoltaic (PV) plants in the United States.
Solar project developers, sponsors, long-term owners, and consultants have increased project-life assumptions over time, from an average of ~21.5 years in 2007 to ~32.5 years in 2019. Current assumptions range from 25 years to more than 35 years depending on the organization; 17 out of 19 organizations surveyed or reviewed use 30 years or more.
Levelized, lifetime OpEx estimates have declined from an average of ~17/kWDC-yr in 2019. Across 13 sources, the range in average lifetime OpEx for projects built in 2019 is broad, from 25/kWDC-yr. Operations and maintenance (O&M) costs—one component of OpEx—have declined precipitously in recent years, to 305/MWh. Using 2019 values for all parameters yields an average LCOE of 305/MWh to 22/MWh) of the overall decline is due to improvements in project life and OpEx. Project life extensions and OpEx reductions have had similarly sized impacts on LCOE over this period, at 73/MWh—43% higher.
Given the limited quantity and comparability of previously available data on these cost drivers, the data and trends presented here may inform assumptions used by electric system planners, modelers, and analysts. The results may also provide useful benchmarks to the solar industry, helping developers and assets owners compare their expectations for project life and OpEx with those of their peers
An Examination of Avoided Costs in Utah
The Utah Wind Working Group (UWWG) believes there are currently opportunities to encourage wind power development in the state by seeking changes to the avoided cost tariff paid to qualifying facilities (QFs). These opportunities have arisen as a result of a recent re-negotiation of Pacificorp’s Schedule 37 tariff for wind QFs under 3 MW, as well as an ongoing examination of Pacificorp’s Schedule 38 tariff for wind QFs larger than 3 MW. It is expected that decisions made regarding Schedule 38 will also impact Schedule 37. Through the Laboratory Technical Assistance Program (Lab TAP), the UWWG has requested (through the Utah Energy Office) that LBNL provide technical assistance in determining whether an alternative method of calculating avoided costs that has been officially adopted in Idaho would lead to higher QF payments in Utah, and to discuss the pros and cons of this method relative to the methodology recently adopted under Schedule 37 in Utah. To accomplish this scope of work, I begin by summarizing the current method of calculating avoided costs in Utah (per Schedule 37) and Idaho (the “surrogate avoided resource” or SAR method). I then compare the two methods both qualitatively and quantitatively. Next I present Pacificorp’s four main objections to the use of the SAR method, and discuss the reasonableness of each objection. Finally, I conclude with a few other potential considerations that might add value to wind QFs in Utah
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Using RPS Policies to Grow the Solar Market in the United States
The market for photovoltaics in the United States remains small relative to the nation's solar resource potential. Nonetheless, annual grid-connected PV installations have grown from just 4 MW in 2000 to over 100 MW in 2006, fast enough to the catch the attention of the global solar industry. The state of California deserves much of the credit for this growth. The State's historical rebate programs resulted in roughly 75% of the nation's grid-connected PV additions from 2000 through 2006 being located in California, and the $3 billion California Solar Initiative will ensure that the State remains a mainstay of the US solar industry for years to come. But California is not the only market for solar in the US; other states have recently developed policies that may rival those of the western state in terms of future growth potential. In particular, 25 states, as well as Washington, D.C., have established renewables portfolio standards (RPS), sometimes called quota systems in Europe, requiring electricity suppliers in those states to source a minimum portion of their need from renewable electricity. (Because a national RPS is not yet in place, my focus here is on state policies). Under many of these state policies, solar is not expected to fare particularly well: PV installations simply cannot compete on cost or scale with large wind plants in the US, at least not yet. In response, an expanding list of states have established solar or distributed generation (DG) set-asides within their RPS policies, effectively requiring that some fraction of RPS-driven supply derive from solar energy. The popularity of set-asides for solar and/or DG has increased dramatically in recent years. Already, 11 states and D.C. have developed such RPS set-asides. These include states with outstanding solar resources, such as Nevada, Arizona, Colorado, and New Mexico, as well as areas where the solar resource is less robust, including North Carolina, Maryland, Pennsylvania, New Jersey, New York, New Hampshire, Delaware, and DC. Among those states with set-asides, two are restricted to PV applications, nine also allow solar-thermal electric to qualify, three allow solar heating and/or cooling to qualify, and three have broader renewable DG set-asides. The policies also differ in their targets and timeframes, whether projects must be located in-state, the application of cost caps, and the degree of oversight on how suppliers contract with solar projects. Only three of these states have more than two years of experience with solar or DG set-asides so far: Arizona, Nevada, and New Jersey. And yet, despite the embryonic stage of these policies, they have already begun to have a significant impact on the grid-connected PV market. From 2000-2006, 16% (or 48 MW) of grid-connected PV installations in the US occurred in states with such set-asides, a percentage that increases to 67% if one only considers PV additions outside of California. The importance of these programs is growing and will continue to expand. In fact, if one assumes (admittedly somewhat optimistically) that these policies will be fully achieved, then existing state solar or DG set-asides could result in 400 MW of solar capacity by 2010, 2,000 MW by 2015, and 6,500 MW by 2025. This equates to annual additions of roughly 100 MW through 2010, increasing to over 500 MW per year by 2015 and 700 MW per year by 2020. PV is not assured of all of this capacity, and will receive strong competition from solar-thermal electric facilities in the desert southwest. Nonetheless, set-asides in those states outside of the southwest will favor PV, and even some of the southwestern states have designed their RPS programs to ensure that PV fares well, relative to other forms of solar energy. Since 2000, Arizona and, more recently, New Jersey have represented the largest solar set-aside-driven PV markets. Even more-recent additions are coming from Colorado, Nevada, New York, and Pennsylvania. In the long-term, the largest markets for solar electricity are predicted to include New Jersey, Maryland, Arizona, and Pennsylvania. How do these states stack up against California, with a goal of 3,000 MW of new solar capacity by 2016? Though none of the states with solar set-asides are predicted to reach 3,000 MW of solar from their RPS policies alone, three are expected to exceed 1,000 MW (New Jersey, Maryland, and Arizona). And, if stated on a percentage-of-load basis, then the solar targets in New Mexico, Arizona, New Jersey, and Maryland all exceed California's goal. Of course, achieving these targets is not assured. States with solar set-asides have developed various types of cost caps, many of which may ultimately become binding, thereby limiting future solar growth. Penalties for lack of compliance may be insufficient. Finally, some states continue to struggle with how to encourage long-term contracting for solar generation, and to ensure continued rebate programs for smaller PV installations
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Benchmarking Anticipated Wind Project Lifetimes: Results from a Survey of U.S. Wind Industry Professionals
This paper draws on a survey of wind industry professionals to clarify trends in the expected useful life of land-based wind power plants in the United States. The expected useful life of a project affects expectations about its profitability, the timing of possible decommissioning or repowering, and its levelized costs.
We find that most wind project developers, sponsors and long-term owners have increased project-life assumptions over time, from a typical term of ~20 years in the early 2000s to ~25 years by the mid-2010s and ~30 years more recently. Current assumptions range from 25 to 40 years, with an average of 29.6 years.
The estimated average levelized cost of energy (LCOE) for new wind projects built in 2018 is ), assuming a 20-year project life. With a 25-year useful life and no change in assumed operations and maintenance (O&M) expenditures or wind plant performance over time, LCOE declines by 10%, to 33.5/MWh (under the same unaltered assumptions about O&M and performance). Even longer assumed lifetimes lead to further (but diminishing) LCOE reductions—e.g., to 30.3/MWh for 35- and 40-year lives, respectively.
The data and trends presented here may inform assumptions used by electric system planners, modelers and analysts. The results may also provide useful benchmarks to the wind industry, helping developers and assets owners to compare their expectations with those of their peers
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Clean energy funds: An overview of state support for renewable energy
Across the United States, as competition in the supply and delivery of electricity has been introduced, states have sought to ensure the continuation of ''public benefits'' programs traditionally administered or funded by electric utilities. Many states have built into their restructuring plans methods of supporting renewable energy sources. One of the most popular policy mechanisms for ensuring such continued support has been the system-benefits charge (SBC), a non-bypassable charge to electricity customers (usually applied on a cents/kWh basis) used to collect funds for public purpose programs. Thus far, at least fourteen states have established SBC funds targeted in part towards renewable energy. This paper discusses the status and performance of these state renewable or ''clean'' energy funds supported by system-benefits charges. As illustrated later, existing state renewable energy funds are expected to collect roughly $3.5 billion through 2012 for renewable energy. Clearly, these funds have the potential to provide significant support for clean energy technologies over at least the next decade. Because the level of funding for renewable energy available under these programs is unprecedented and because fund administrators are developing innovative and new programs to fund renewable projects, a certain number of program failures are unavoidable. Also evident is that states are taking very different approaches to the distribution of these funds and that many lessons are being learned as programs are designed, implemented, and evaluated. Our purpose in this paper is therefore to relay early experience with these funds and provide preliminary lessons learned from that experience. It is our hope that this analysis will facilitate learning across states and help state fund managers develop more effective and more coordinated programs. Central to this paper are case studies that provide information on the SBC-funded renewable energy programs and experiences of 14 states. These case studies are attached as Appendix A. The body of the paper both summarizes and draws lessons from these more detailed state case studies. Section II provides a broad overview of the current status of state SBC funds, including funding level and duration, technology eligibility, and program administration. Section III offers an overview of funding activity and highlights the various renewable energy programs states have established thus far. Section IV provides a summary of results to date. Section V turns to salient observations and preliminary lessons learned from this early experience. Administrative, programmatic, and strategic observations and lessons are emphasized. The paper ends with some brief concluding remarks
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Effects of Temporal Wind Patterns on the Value of Wind-GeneratedElectricity at Different Sites in California and the Northwest
Wind power production varies on a diurnal and seasonal basis. In this paper, we use wind speed data from three different sources to assess the effects of wind timing on the value of electric power from potential wind farm locations in California and the Northwestern United States. By ''value'', we refer to either the contribution of wind power to meeting the electric system's peak loads, or the financial value of wind power in electricity markets. Sites for wind power projects are often screened or compared based on the annual average power production that would be expected from wind turbines at each site (Baban and Parry 2001; Brower et al. 2004; Jangamshetti and Rau 2001; Nielsen et al. 2002; Roy 2002; Schwartz 1999). However, at many locations, variations in wind speeds during the day and year are correlated with variations in the electric power system's load and wholesale market prices (Burton et al. 2001; Carlin 1983; Kennedy and Rogers 2003; Man Bae and Devine 1978; Sezgen et al. 1998); this correlation may raise or lower the value of wind power generated at each location. A number of previous reports address this issue somewhat indirectly by studying the contribution of individual wind power sites to the reliability or economic operation of the electric grid, using hourly wind speed data (Fleten et al.; Kahn 1991; Kirby et al. 2003; Milligan 2002; van Wijk et al. 1992). However, we have not identified any previous study that examines the effect of variations in wind timing across a broad geographical area on wholesale market value or capacity contribution of those different wind power sites. We have done so, to determine whether it is important to consider wind-timing when planning wind power development, and to try to identify locations where timing would have a more positive or negative effect. The research reported in this paper seeks to answer three specific questions: (1) How large of an effect can the temporal variation of wind power have on the value of wind in different wind resource areas? (2) Which locations are affected most positively or negatively by the seasonal and diurnal timing of wind speeds? (3) How compatible are wind resources in California and the Northwest (Washington, Oregon, Idaho, Montana and Wyoming) with wholesale power prices and loads in either region? The latter question is motivated by the fact that wind power projects in the Northwest could sell their output into California (and vice versa), and that California has an aggressive renewable energy policy that may ultimately yield such imports. We also assess whether modeled wind data from TrueWind Solutions, LLC, can help answer such questions, by comparing results found using the TrueWind data to those found using anemometers or wind farm power production data. This paper summarizes results that are presented in more detail in a recent report from Lawrence Berkeley National Laboratory (Fripp and Wiser 2006). The full report is available at http://eetd.lbl.gov/EA/EMP/re-pubs.html
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Comparison of AEO 2009 Natural Gas Price Forecast to NYMEX Futures Prices
On December 17, 2008, the reference-case projections from Annual Energy Outlook 2009 (AEO 2009) were posted on the Energy Information Administration's (EIA) web site. We at LBNL have, in the past, compared the EIA's reference-case long-term natural gas price forecasts from the AEO series to contemporaneous natural gas prices that can be locked in through the forward market, with the goal of better understanding fuel price risk and the role that renewables can play in mitigating such risk. As such, we were curious to see how the latest AEO reference-case gas price forecast compares to the NYMEX natural gas futures strip. This brief memo presents our findings. Note that this memo pertains only to natural gas fuel price risk (i.e., the risk that natural gas prices might differ over the life of a gas-fired generation asset from what was expected when the decision to build the gas-fired unit was made). We do not take into consideration any of the other distinct attributes of gas-fired and renewable generation, such as dispatchability (or lack thereof), differences in capital costs and O&M expenses, or environmental externalities. A comprehensive comparison of different resource types--which is well beyond the scope of this memo--would need to account for differences in all such attributes, including fuel price risk. Furthermore, our analysis focuses solely on natural-gas-fired generation (as opposed to coal-fired or nuclear generation, for example), for several reasons: (1) price volatility has been more of a concern for natural gas than for other fuels used to generate power; (2) for environmental and other reasons, natural gas has, in recent years, been the fuel of choice among power plant developers; and (3) natural gas-fired generators often set the market clearing price in competitive wholesale power markets throughout the United States. That said, a more-complete analysis of how renewables mitigate fuel price risk would also need to consider coal, uranium, and other fuel prices. Finally, we caution readers about drawing inferences or conclusions based solely on this memo in isolation: to place the information contained herein within its proper context, we strongly encourage readers interested in this issue to read through our previous, more-detailed studies, available at http://eetd.lbl.gov/ea/EMS/reports/53587.pdf or http://eetd.lbl.gov/ea/ems/reports/54751.pdf
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Comparing state portfolio standards and system-benefits charges under restructuring
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Designing PV Incentive Programs to Promote Performance: A Reviewof Current Practice in the U.S.
In the U.S., the increasing financial support for customer-sited photovoltaic (PV) systems provided through publicly-funded incentive programs has heightened concerns about the long-term performance of these systems. Given the barriers that customers face to ensuring that their PV systems perform well, and the responsibility that PV incentive programs bear to ensure that public funds are prudently spent, these programs should, and often do, play a critical role in addressing PV system performance. To provide a point of reference for assessing the current state of the art, and to inform program design efforts going forward, we examine the approaches to encouraging PV system performance used by 32 prominent PV incentive programs in the U.S. We identify eight general strategies or groups of related strategies that these programs have used to address factors that affect performance, and describe key implementation details. Based on this review, we then offer recommendations for how PV incentive programs can be effectively designed to mitigate potential performance issues
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