IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v112y2016icp774-787.html
   My bibliography  Save this article

Probabilistic life-cycle cost analysis for renewable and non-renewable power plants

Author

Listed:
  • Cartelle Barros, Juan José
  • Lara Coira, Manuel
  • de la Cruz López, María Pilar
  • del Caño Gochi, Alfredo

Abstract

Two probabilistic models are presented to assess the costs of power plants. One of them uses requirement trees, value functions and the analytic hierarchy process. It is also based on Monte Carlo simulation. The second one is a mathematical model for calculating the levelised cost of electricity (LCOE) based on discounted cash flow techniques, and combined with Monte Carlo simulation. The results obtained with both models are compared and discussed. On the one hand, the LCOE model provides the most reliable results. These results reinforce the idea that conventional or coal, lignite, oil, natural gas and nuclear power plants are still the most competitive options, with the LCOE falling in a range of around 25 to 200 €/MWh and mean values approaching 70 €/MWh. Generally, renewable power plants obtained the worst results, with a LCOE varying from around 30 to more than 450 €/MWh. Nevertheless, this study demonstrates that renewable alternatives can compete with their conventional counterparts under certain conditions.

Suggested Citation

  • Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2016. "Probabilistic life-cycle cost analysis for renewable and non-renewable power plants," Energy, Elsevier, vol. 112(C), pages 774-787.
    • Handle: RePEc:eee:energy:v:112:y:2016:i:c:p:774-787
    DOI: 10.1016/j.energy.2016.06.098
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544216308726
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2016.06.098?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carneiro, Patrícia & Ferreira, Paula, 2012. "The economic, environmental and strategic value of biomass," Renewable Energy, Elsevier, vol. 44(C), pages 17-22.
    2. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    3. Ondraczek, Janosch, 2014. "Are we there yet? Improving solar PV economics and power planning in developing countries: The case of Kenya," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 604-615.
    4. Hinkley, James T. & Hayward, Jennifer A. & Curtin, Bryan & Wonhas, Alex & Boyd, Rod & Grima, Charles & Tadros, Amir & Hall, Ross & Naicker, Kevin, 2013. "An analysis of the costs and opportunities for concentrating solar power in Australia," Renewable Energy, Elsevier, vol. 57(C), pages 653-661.
    5. Myhr, Anders & Bjerkseter, Catho & Ågotnes, Anders & Nygaard, Tor A., 2014. "Levelised cost of energy for offshore floating wind turbines in a life cycle perspective," Renewable Energy, Elsevier, vol. 66(C), pages 714-728.
    6. Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2015. "Assessing the global sustainability of different electricity generation systems," Energy, Elsevier, vol. 89(C), pages 473-489.
    7. Yuan, Jiahai & Sun, Shenghui & Zhang, Wenhua & Xiong, Minpeng, 2014. "The economy of distributed PV in China," Energy, Elsevier, vol. 78(C), pages 939-949.
    8. Akdag, Seyit Ahmet & Güler, Önder, 2010. "Evaluation of wind energy investment interest and electricity generation cost analysis for Turkey," Applied Energy, Elsevier, vol. 87(8), pages 2574-2580, August.
    9. Di Lorenzo, Giuseppina & Pilidis, Pericles & Witton, John & Probert, Douglas, 2012. "Monte-Carlo simulation of investment integrity and value for power-plants with carbon-capture," Applied Energy, Elsevier, vol. 98(C), pages 467-478.
    10. Vujić, Jasmina & Antić, Dragoljub P. & Vukmirović, Zorka, 2012. "Environmental impact and cost analysis of coal versus nuclear power: The U.S. case," Energy, Elsevier, vol. 45(1), pages 31-42.
    11. Edenhofer, Ottmar & Hirth, Lion & Knopf, Brigitte & Pahle, Michael & Schlömer, Steffen & Schmid, Eva & Ueckerdt, Falko, 2013. "On the economics of renewable energy sources," Energy Economics, Elsevier, vol. 40(S1), pages 12-23.
    12. Ahmad, Ali & Ramana, M.V., 2014. "Too costly to matter: Economics of nuclear power for Saudi Arabia," Energy, Elsevier, vol. 69(C), pages 682-694.
    13. C. Wilson & A. Grubler & N. Bauer & V. Krey & K. Riahi, 2013. "Future capacity growth of energy technologies: are scenarios consistent with historical evidence?," Climatic Change, Springer, vol. 118(2), pages 381-395, May.
    14. O Rourke, Fergal & Boyle, Fergal & Reynolds, Anthony, 2010. "Tidal energy update 2009," Applied Energy, Elsevier, vol. 87(2), pages 398-409, February.
    15. Esteban, Miguel & Leary, David, 2012. "Current developments and future prospects of offshore wind and ocean energy," Applied Energy, Elsevier, vol. 90(1), pages 128-136.
    16. de Groot, R.A.F. & van der Veen, V.G. & Sebitosi, A.B., 2013. "Comparing solar PV (photovoltaic) with coal-fired electricity production in the centralized network of South Africa," Energy, Elsevier, vol. 55(C), pages 823-837.
    17. Ueckerdt, Falko & Hirth, Lion & Luderer, Gunnar & Edenhofer, Ottmar, 2013. "System LCOE: What are the costs of variable renewables?," Energy, Elsevier, vol. 63(C), pages 61-75.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Hao & Gao, Xin-Ya & Liu, Jian-Yu & Zhang, Qian & Yu, Shiwei & Kang, Jia-Ning & Yan, Rui & Wei, Yi-Ming, 2020. "The grid parity analysis of onshore wind power in China: A system cost perspective," Renewable Energy, Elsevier, vol. 148(C), pages 22-30.
    2. Pillot, Benjamin & de Siqueira, Sandro & Dias, João Batista, 2018. "Grid parity analysis of distributed PV generation using Monte Carlo approach: The Brazilian case," Renewable Energy, Elsevier, vol. 127(C), pages 974-988.
    3. Irene Josa & Albert de la Fuente & Maria del Mar Casanovas-Rubio & Jaume Armengou & Antonio Aguado, 2021. "Sustainability-Oriented Model to Decide on Concrete Pipeline Reinforcement," Sustainability, MDPI, vol. 13(6), pages 1-25, March.
    4. Hairat, Manish Kumar & Ghosh, Sajal, 2017. "100GW solar power in India by 2022 – A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 1041-1050.
    5. Wang, Yongpei & Yan, Qing, 2023. "Is cleaner more efficient? Exploring nonlinear impacts of renewable energy deployment on regional total factor energy efficiency," Renewable Energy, Elsevier, vol. 216(C).
    6. Eryilmaz, Serkan & Bulanık, İrem & Devrim, Yilser, 2021. "Reliability based modeling of hybrid solar/wind power system for long term performance assessment," Reliability Engineering and System Safety, Elsevier, vol. 209(C).
    7. Prakash, Vrishab & Ghosh, Sajal & Kanjilal, Kakali, 2020. "Costs of avoided carbon emission from thermal and renewable sources of power in India and policy implications," Energy, Elsevier, vol. 200(C).
    8. Timilsina, Govinda R., 2021. "Are renewable energy technologies cost competitive for electricity generation?," Renewable Energy, Elsevier, vol. 180(C), pages 658-672.
    9. Aldersey-Williams, J. & Rubert, T., 2019. "Levelised cost of energy – A theoretical justification and critical assessment," Energy Policy, Elsevier, vol. 124(C), pages 169-179.
    10. Coronas, Sergio & Martín, Helena & de la Hoz, Jordi & García de Vicuña, Luis & Castilla, Miguel, 2021. "MONTE-CARLO probabilistic valuation of concentrated solar power systems in Spain under the 2014 retroactive regulatory framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    11. Timilsina,Govinda R., 2020. "Demystifying the Costs of Electricity Generation Technologies," Policy Research Working Paper Series 9303, The World Bank.
    12. Wang, Chaoyang & Liu, Ming & Li, Bingxin & Liu, Yiwen & Yan, Junjie, 2017. "Thermodynamic analysis on the transient cycling of coal-fired power plants: Simulation study of a 660 MW supercritical unit," Energy, Elsevier, vol. 122(C), pages 505-527.
    13. Xu, Jiuping & Wang, Fengjuan & Lv, Chengwei & Huang, Qian & Xie, Heping, 2018. "Economic-environmental equilibrium based optimal scheduling strategy towards wind-solar-thermal power generation system under limited resources," Applied Energy, Elsevier, vol. 231(C), pages 355-371.
    14. Aldersey-Williams, John & Broadbent, Ian D. & Strachan, Peter A., 2019. "Better estimates of LCOE from audited accounts – A new methodology with examples from United Kingdom offshore wind and CCGT," Energy Policy, Elsevier, vol. 128(C), pages 25-35.
    15. Aldersey-Williams, John & Broadbent, Ian D. & Strachan, Peter A., 2020. "Analysis of United Kingdom offshore wind farm performance using public data: Improving the evidence base for policymaking," Utilities Policy, Elsevier, vol. 62(C).
    16. Yajing Gao & Fushen Xue & Wenhai Yang & Yanping Sun & Yongjian Sun & Haifeng Liang & Peng Li, 2017. "A Three-Part Electricity Price Mechanism for Photovoltaic-Battery Energy Storage Power Plants Considering the Power Quality and Ancillary Service," Energies, MDPI, vol. 10(9), pages 1-21, August.
    17. Ramirez, Angel D. & Rivela, Beatriz & Boero, Andrea & Melendres, Ana M., 2019. "Lights and shadows of the environmental impacts of fossil-based electricity generation technologies: A contribution based on the Ecuadorian experience," Energy Policy, Elsevier, vol. 125(C), pages 467-477.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Segura, E. & Morales, R. & Somolinos, J.A., 2018. "A strategic analysis of tidal current energy conversion systems in the European Union," Applied Energy, Elsevier, vol. 212(C), pages 527-551.
    2. Cartelle Barros, Juan José & Lara Coira, Manuel & de la Cruz López, María Pilar & del Caño Gochi, Alfredo, 2015. "Assessing the global sustainability of different electricity generation systems," Energy, Elsevier, vol. 89(C), pages 473-489.
    3. Rose, Amy & Stoner, Robert & Pérez-Arriaga, Ignacio, 2016. "Prospects for grid-connected solar PV in Kenya: A systems approach," Applied Energy, Elsevier, vol. 161(C), pages 583-590.
    4. Ruhang Xu & Zhilin Liu & Zhuangzhuang Yu, 2019. "Exploring the Profitability and Efficiency of Variable Renewable Energy in Spot Electricity Market: Uncovering the Locational Price Disadvantages," Energies, MDPI, vol. 12(14), pages 1-30, July.
    5. Kästel, Peter & Gilroy-Scott, Bryce, 2015. "Economics of pooling small local electricity prosumers—LCOE & self-consumption," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 718-729.
    6. Alexandra G. Papadopoulou & George Vasileiou & Alexandros Flamos, 2020. "A Comparison of Dispatchable RES Technoeconomics: Is There a Niche for Concentrated Solar Power?," Energies, MDPI, vol. 13(18), pages 1-22, September.
    7. Lanshina, Tatiana A. & “Skip” Laitner, John A. & Potashnikov, Vladimir Y. & Barinova, Vera A., 2018. "The slow expansion of renewable energy in Russia: Competitiveness and regulation issues," Energy Policy, Elsevier, vol. 120(C), pages 600-609.
    8. Segura, E. & Morales, R. & Somolinos, J.A. & López, A., 2017. "Techno-economic challenges of tidal energy conversion systems: Current status and trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 536-550.
    9. Li, Hui & Wang, LiGuo, 2023. "Numerical study on self-power supply of large marine monitoring buoys: Wave-excited vibration energy harvesting and harvester optimization," Energy, Elsevier, vol. 285(C).
    10. Spiros Papaefthimiou, Manolis Souliotis, and Kostas Andriosopoulos, 2016. "Grid parity of solar energy: imminent fact or future's fiction," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    11. Nock, Destenie & Baker, Erin, 2019. "Holistic multi-criteria decision analysis evaluation of sustainable electric generation portfolios: New England case study," Applied Energy, Elsevier, vol. 242(C), pages 655-673.
    12. Hammar, Linus & Ehnberg, Jimmy & Mavume, Alberto & Cuamba, Boaventura C. & Molander, Sverker, 2012. "Renewable ocean energy in the Western Indian Ocean," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4938-4950.
    13. Fuquan Zhao & Feiqi Liu & Han Hao & Zongwei Liu, 2020. "Carbon Emission Reduction Strategy for Energy Users in China," Sustainability, MDPI, vol. 12(16), pages 1-19, August.
    14. Chenglong Guo & Wanan Sheng & Dakshina G. De Silva & George Aggidis, 2023. "A Review of the Levelized Cost of Wave Energy Based on a Techno-Economic Model," Energies, MDPI, vol. 16(5), pages 1-30, February.
    15. Zeyringer, Marianne & Fais, Birgit & Keppo, Ilkka & Price, James, 2018. "The potential of marine energy technologies in the UK – Evaluation from a systems perspective," Renewable Energy, Elsevier, vol. 115(C), pages 1281-1293.
    16. Chen, Hao & Gao, Xin-Ya & Liu, Jian-Yu & Zhang, Qian & Yu, Shiwei & Kang, Jia-Ning & Yan, Rui & Wei, Yi-Ming, 2020. "The grid parity analysis of onshore wind power in China: A system cost perspective," Renewable Energy, Elsevier, vol. 148(C), pages 22-30.
    17. Oskar Lecuyer & Adrien Vogt-Schilb, 2013. "Assessing and ordering investments in polluting fossil-fueled and zero-carbon capital," CIRED Working Papers hal-00850680, HAL.
    18. Zhao, Zhen-Yu & Chen, Yu-Long & Thomson, John Douglas, 2017. "Levelized cost of energy modeling for concentrated solar power projects: A China study," Energy, Elsevier, vol. 120(C), pages 117-127.
    19. Fox, Clive J. & Benjamins, Steven & Masden, Elizabeth A. & Miller, Raeanne, 2018. "Challenges and opportunities in monitoring the impacts of tidal-stream energy devices on marine vertebrates," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 1926-1938.
    20. Renaud Coulomb & Oskar Lecuyer & Adrien Vogt-Schilb, 2019. "Optimal Transition from Coal to Gas and Renewable Power Under Capacity Constraints and Adjustment Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 557-590, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:112:y:2016:i:c:p:774-787. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.