Why solar?

Levelized Cost of Electricity - LCOE

Capital Overnight cost: is the cost of a construction project if no interest incurred during construction, as if the project was completed "overnight." An alternate definition is: the present value cost that would have to be paid as a lump sum up front to completely pay for a construction project. This is a type of investment cost!

Levelized Cost Of Electricity – is the cost of production of electricity, includes the Capital Overnight cost, the maintenance cost, fix operational cost and consumables (like coal, gas) as well. This is the real comparison number!

Future Scenarios for Electricity Production

The message is Solar will have major share!

Coal

• Coal has the highest carbon emission.

• The planet still has plenty of coal reserves but because the global labour cost is rising it might increase the mining cost.

• Carbon emission is very high: 0.7 t/MWh.

• Capital Overnight Cost with coal power plant is around: 2.2-3.7 USD/W!

• LCOE with Coal power plant is: ~0.1 – 0.05 USD/kWh!

Cost of Coal

Gas

Global gas reserves in trillions of m^{3 (10ˆ12)}

• The Earth is running out of gas reserves.

• Reserves are controlled by few countries – political risk

• Capital Overnight Cost with Gas power plant is around: 0.06-0.12 USD/W!

• LCOE with Gas power plant is: 0.08-0.13 USD/kWh!

• Carbon emission is very high: 0.5 t/MWh

• Consumption trend is growing.

• Expected price is growing.

Nuclear

Nuclear technology has high risk factors:

• Accident (Chernobyl)

• Military risk being a potential target

• Nuclear waste handling risk

• Political risk

• Expected uranium price grows

• To build nuclear power plant takes 5-7 years and the minimum investment is still huge.

• Capital Overnight Cost with nuclear power plant is around: 3.8 USD/W!

• LCOE with Gas power plant is: 0.11 USD/kWh!

Oil

Global oil reserves

• The Earth is running out of oil reserves.
• The reserves are controlled by few countries.
• Environmental risk: Gulf of Mexico BP case!
• Oil price will rise!
• The LCOE is very high: 0.18-0.2 USD/kWh!

LCOE of Different Technologies

About Fossil based technologies it is very hard to calculate the LCOE because they need significant amount of consumables (gas, coal, oil) for the operation which has major effect on the LCOE but the price trend of those raw materials are difficult to estimate. Solar is very easy to calculate because it doesn’t require any consumables for the operation. Once it is installed it generates power during its lifetime!

The following charts will summarize the different technologies from the aspect of:

• Capital Overtime Cost level (investment)
• LCOE level.

Capital (investment) cost and fixed operating & maintenance cost. IMPORTANT for the fossil based systems consumables like coal and gas NOT included!!

With Solar now the 2500-3500 USD/kW is reachable!

Fuel Trends of Different Technologies

Because of the growing trend of the fossil based fuels/consumables most probably the LCOE level will increase while with Solar it will remain the same or reduce because of the GHG market.

Benefits of Solar

• Precisely calculable and low operational and fix costs
• Independency from the raw material commodity market
• No consumable/fuel needed
• Short lead time: delivery of the plant within 1.5 years
• The section can be continuously connected to the grid during installation.
• Low LCOE: 0.09-0.1 USD/kWh
• Comparing to the fossil-based technologies even in long term Solar will keep its cost level thus there is no fuel/consumables requirement.
• Low carbon emission:
  Important businesswise (GHG credit market)
  Important because of the environmental protection