96 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
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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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Public Goods and Private Interests: Understanding Non-Residential Demand for Green Power
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Effects of Temporal Wind Patterns on the Value of Wind-Generated Electricity in California and the Northwest
Wind power production is variable, but also has diurnal and seasonal patterns. These patterns differ between sites, potentially making electric power from some wind sites more valuable for meeting customer loads or selling in wholesale power markets. This paper investigates whether the timing of wind significantly affects the value of electricity from sites in California and the Northwestern United States. We use both measured and modeled wind data and estimate the time-varying value of wind power with both financial and load-based metrics. We find that the potential difference in wholesale market value between better-correlated and poorly correlated wind sites is modest, on the order of 5-10 percent. A load-based metric, power production during the top 10 percent of peak load hours, varies more strongly between sites, suggesting that the capacity value of different wind projects could vary by as much as 50 percent based on the timing of wind alone
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Impacts of High Variable Renewable Energy Futures on Electric-Sector Decision Making: Demand-Side Effects
Previous work by the Berkeley Lab describes how high shares of variable renewable energy (VRE) such as wind and solar power could change wholesale electricity price dynamics. These include the timing of when electricity is cheap or expensive, locational differences in the cost of electricity, and the degree of regularity or predictability in those costs. Many decentralized decision-makers on the demand-side may not yet have considered the implications of these possible future changes.
In this report, we evaluate the sensitivity of a set of demand-side decisions to different levels of VRE penetration ranging from a low of 5-20% to a high of 40-50%. The analysis builds on hourly wholesale energy and capacity prices in different VRE scenarios for four wholesale markets in the United States for the year 2030 (CAISO, ERCOT, NYISO, and SPP). The principal question for this exploration is whether private and public electric-sector decisions that are made based on assumptions reflecting low VRE levels still achieve their intended objective in a high VRE scenario with 40-50% wind and solar?
This scoping report evaluates the impacts of changing patterns of peak system needs on the benefits of demand reductions by examining the altered value of different energy efficiency (EE) measures. Similarly, we investigate new opportunities for large energy consumers that may arise from periods with very low wholesale electricity prices. We calculate the value of new process investments (e.g., hydrogen production and other generalized electro-commodities), showcase the varying value of new product storage investments (such as reservoir extensions at a desalination plant), and estimate the benefits of increased process flexibility that uses electricity as a process-input in addition to traditional fossil fuels (e.g., district energy systems). Finally, many decentralized decision-makers and end-use customers are not directly exposed to wholesale electricity prices but instead receive price signals from their retail electricity rates. As wind and solar shares increase, we compare the economic efficiency of flat retail rates relative to more dynamic time-of-use tariffs with and without critical peak-pricing events
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Public goods and private interests: Understanding non-residential demand for green power
This article presents the results of the first large-scale mail survey of non-residential green power customers in the United States. The survey explored the motivations, attitudes, and experiences of 464 business, non-profit, and public-sector customers that have voluntarily opted to purchase - and frequently pay a premium for - renewable electricity. Results of this study should be of value to marketers interested in targeting these customer segments, to policy makers interested in fostering and understanding non-residential demand for green power, and to academics pondering the motivations for firms to engage in such voluntary environmental initiatives
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Impact of Wind, Solar, and Other Factors on Wholesale Power Prices: An Historical Analysis—2008 through 2017
Wholesale power markets have evolved. Some of the most prominent changes over the last decade in the United States include growth in wind and solar, a reduction in the price of natural gas, weakened load growth, and an increase in the retirement of thermal power plants. Here we empirically assess the degree to which wind and solar—among other factors—have influenced wholesale electricity prices. We show that wind and solar have contributed to reductions in overall average annual wholesale electricity prices since 2008, but that natural gas prices have had the largest impact. More notable is that expansion of variable renewable energy has led to significant changes in locational, time of day, and seasonal pricing patterns in some regions. These altered pricing patterns reflect a fundamental shift, and hold important implications for the grid-system value of wind and solar, and for other electric-sector planning and operating decisions
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