IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v120y2017icp117-127.html
   My bibliography  Save this article

Levelized cost of energy modeling for concentrated solar power projects: A China study

Author

Listed:
  • Zhao, Zhen-Yu
  • Chen, Yu-Long
  • Thomson, John Douglas

Abstract

Renewable energy plays significant role in achieving energy savings and emissions reduction. As a sustainable and environmental friendly renewable energy source, concentrated solar power (CSP) is of interest for research and development. This is because CSP plants can be equipped with thermal storage systems, thereby producing electricity when sunlight is not available. The installation of CSP plants also leads to substantial ‘peak shaving effects’. However, the cost of CSP generation is an obstacle hampering the commercialization of this emerging industry. This paper constructs a mathematical model of the levelized cost of energy (LCOE) to calculate the power generation cost of CSP projects on the basis of lifetime cost structure analysis. A sensitivity analysis is conducted to examine the impact of different variables on the LCOE of CSP projects. The variables considered in this study are investment cost over the construction period, annual operation and maintenance cost, annual electricity production and the discount rate. Finally, the influence of incentive policies such as preferential loans, tax support and zero land cost for power stations is analyzed. This research offers a new method for power generation cost calculation of CSP projects and provides support for governments to formulate incentive policies for the industry.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:energy:v:120:y:2017:i:c:p:117-127
    DOI: 10.1016/j.energy.2016.12.122
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544216319363
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2016.12.122?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. Pietzcker, Robert Carl & Stetter, Daniel & Manger, Susanne & Luderer, Gunnar, 2014. "Using the sun to decarbonize the power sector: The economic potential of photovoltaics and concentrating solar power," Applied Energy, Elsevier, vol. 135(C), pages 704-720.
    2. Parrado, C. & Girard, A. & Simon, F. & Fuentealba, E., 2016. "2050 LCOE (Levelized Cost of Energy) projection for a hybrid PV (photovoltaic)-CSP (concentrated solar power) plant in the Atacama Desert, Chile," Energy, Elsevier, vol. 94(C), pages 422-430.
    3. Viebahn, Peter & Lechon, Yolanda & Trieb, Franz, 2011. "The potential role of concentrated solar power (CSP) in Africa and Europe--A dynamic assessment of technology development, cost development and life cycle inventories until 2050," Energy Policy, Elsevier, vol. 39(8), pages 4420-4430, August.
    4. Yuan, Jiahai & Sun, Shenghui & Zhang, Wenhua & Xiong, Minpeng, 2014. "The economy of distributed PV in China," Energy, Elsevier, vol. 78(C), pages 939-949.
    5. Kayser, Dirk, 2016. "Solar photovoltaic projects in China: High investment risks and the need for institutional response," Applied Energy, Elsevier, vol. 174(C), pages 144-152.
    6. Ouedraogo, Bachir I. & Kouame, S. & Azoumah, Y. & Yamegueu, D., 2015. "Incentives for rural off grid electrification in Burkina Faso using LCOE," Renewable Energy, Elsevier, vol. 78(C), pages 573-582.
    7. Hang, Qu & Jun, Zhao & Xiao, Yu & Junkui, Cui, 2008. "Prospect of concentrating solar power in China--the sustainable future," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(9), pages 2505-2514, December.
    8. Li, Jun, 2009. "Scaling up concentrating solar thermal technology in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 2051-2060, October.
    9. Zhao, Zhen-Yu & Li, Zhi-Wei & Xia, Bo, 2014. "The impact of the CDM (clean development mechanism) on the cost price of wind power electricity: A China study," Energy, Elsevier, vol. 69(C), pages 179-185.
    10. Dawson, Lucas & Schlyter, Peter, 2012. "Less is more: Strategic scale site suitability for concentrated solar thermal power in Western Australia," Energy Policy, Elsevier, vol. 47(C), pages 91-101.
    11. Bazilian, Morgan & Onyeji, Ijeoma & Liebreich, Michael & MacGill, Ian & Chase, Jennifer & Shah, Jigar & Gielen, Dolf & Arent, Doug & Landfear, Doug & Zhengrong, Shi, 2013. "Re-considering the economics of photovoltaic power," Renewable Energy, Elsevier, vol. 53(C), pages 329-338.
    12. Zhao, Zhen-yu & Zhang, Shuang-Ying & Hubbard, Bryan & Yao, Xue, 2013. "The emergence of the solar photovoltaic power industry in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 229-236.
    13. Wang, Yu & Zhou, Sheng & Huo, Hong, 2014. "Cost and CO2 reductions of solar photovoltaic power generation in China: Perspectives for 2020," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 370-380.
    14. Schinko, Thomas & Komendantova, Nadejda, 2016. "De-risking investment into concentrated solar power in North Africa: Impacts on the costs of electricity generation," Renewable Energy, Elsevier, vol. 92(C), pages 262-272.
    15. Frisari, Gianleo & Stadelmann, Martin, 2015. "De-risking concentrated solar power in emerging markets: The role of policies and international finance institutions," Energy Policy, Elsevier, vol. 82(C), pages 12-22.
    16. Larsson, Simon & Fantazzini, Dean & Davidsson, Simon & Kullander, Sven & Höök, Mikael, 2014. "Reviewing electricity production cost assessments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 170-183.
    17. Chung-Ling Chien, John & Lior, Noam, 2011. "Concentrating solar thermal power as a viable alternative in China's electricity supply," Energy Policy, Elsevier, vol. 39(12), pages 7622-7636.
    18. Ouyang, Xiaoling & Lin, Boqiang, 2014. "Levelized cost of electricity (LCOE) of renewable energies and required subsidies in China," Energy Policy, Elsevier, vol. 70(C), pages 64-73.
    19. Zhao, Zhen-Yu & Chang, Rui-Dong & Chen, Yu-Long, 2016. "What hinder the further development of wind power in China?—A socio-technical barrier study," Energy Policy, Elsevier, vol. 88(C), pages 465-476.
    20. Zhu, Zhao & Zhang, Da & Mischke, Peggy & Zhang, Xiliang, 2015. "Electricity generation costs of concentrated solar power technologies in China based on operational plants," Energy, Elsevier, vol. 89(C), pages 65-74.
    21. Li, Yuqiang & Liao, Shengming & Rao, Zhenghua & Liu, Gang, 2014. "A dynamic assessment based feasibility study of concentrating solar power in China," Renewable Energy, Elsevier, vol. 69(C), pages 34-42.
    22. Ondraczek, Janosch & Komendantova, Nadejda & Patt, Anthony, 2015. "WACC the dog: The effect of financing costs on the levelized cost of solar PV power," Renewable Energy, Elsevier, vol. 75(C), pages 888-898.
    23. Cocco, Daniele & Serra, Fabio, 2015. "Performance comparison of two-tank direct and thermocline thermal energy storage systems for 1 MWe class concentrating solar power plants," Energy, Elsevier, vol. 81(C), pages 526-536.
    24. Malagueta, Diego & Szklo, Alexandre & Borba, Bruno Soares Moreira Cesar & Soria, Rafael & Aragão, Raymundo & Schaeffer, Roberto & Dutra, Ricardo, 2013. "Assessing incentive policies for integrating centralized solar power generation in the Brazilian electric power system," Energy Policy, Elsevier, vol. 59(C), pages 198-212.
    25. 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.
    26. Nemet, Gregory F., 2006. "Beyond the learning curve: factors influencing cost reductions in photovoltaics," Energy Policy, Elsevier, vol. 34(17), pages 3218-3232, November.
    27. Zhang, Meimei & Wang, Zhifeng & Xu, Chao & Jiang, Hui, 2012. "Embodied energy and emergy analyses of a concentrating solar power (CSP) system," Energy Policy, Elsevier, vol. 42(C), pages 232-238.
    28. Clifton, Julian & Boruff, Bryan J., 2010. "Assessing the potential for concentrated solar power development in rural Australia," Energy Policy, Elsevier, vol. 38(9), pages 5272-5280, September.
    29. Qi, Tianyu & Zhang, Xiliang & Karplus, Valerie J., 2014. "The energy and CO2 emissions impact of renewable energy development in China," Energy Policy, Elsevier, vol. 68(C), pages 60-69.
    30. Fluri, Thomas P., 2009. "The potential of concentrating solar power in South Africa," Energy Policy, Elsevier, vol. 37(12), pages 5075-5080, December.
    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. Liu, Chunyu & Zheng, Xinrui & Yang, Haibin & Tang, Waiching & Sang, Guochen & Cui, Hongzhi, 2023. "Techno-economic evaluation of energy storage systems for concentrated solar power plants using the Monte Carlo method," Applied Energy, Elsevier, vol. 352(C).
    2. Ding, Liping & Zhang, Zumeng & Dai, Qiyao & Zhu, Yuxuan & Shi, Yin, 2023. "Alternative operational modes for Chinese PV poverty alleviation power stations: Economic impacts on stakeholders," Utilities Policy, Elsevier, vol. 82(C).
    3. Calvin Kong Leng Sing & Jeng Shiun Lim & Timothy Gordon Walmsley & Peng Yen Liew & Masafumi Goto & Sheikh Ahmad Zaki Bin Shaikh Salim, 2020. "Time-Dependent Integration of Solar Thermal Technology in Industrial Processes," Sustainability, MDPI, vol. 12(6), pages 1-32, March.
    4. Soomro, Mujeeb Iqbal & Kim, Woo-Seung, 2018. "Performance and economic evaluation of linear Fresnel reflector plant integrated direct contact membrane distillation system," Renewable Energy, Elsevier, vol. 129(PA), pages 561-569.
    5. Shen, Wei & Chen, Xi & Qiu, Jing & Hayward, Jennifier A & Sayeef, Saad & Osman, Peter & Meng, Ke & Dong, Zhao Yang, 2020. "A comprehensive review of variable renewable energy levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    6. Karadöl, İsrafil & Yıldız, Ceyhun & Şekkeli, Mustafa, 2021. "Determining optimal spatial and temporal complementarity between wind and hydropower," Energy, Elsevier, vol. 230(C).
    7. Ephraim Bonah Agyekum & Tomiwa Sunday Adebayo & Festus Victor Bekun & Nallapaneni Manoj Kumar & Manoj Kumar Panjwani, 2021. "Effect of Two Different Heat Transfer Fluids on the Performance of Solar Tower CSP by Comparing Recompression Supercritical CO 2 and Rankine Power Cycles, China," Energies, MDPI, vol. 14(12), pages 1-19, June.
    8. Samaniego Rascón, Danyela & Ferreira, Almerindo D. & Gameiro da Silva, Manuel, 2017. "Cumulative and momentary skin exposures to solar radiation in central receiver solar systems," Energy, Elsevier, vol. 137(C), pages 336-349.
    9. Hakimi, M. & Baniasadi, E. & Afshari, E., 2020. "Thermo-economic analysis of photovoltaic, central tower receiver and parabolic trough power plants for Herat city in Afghanistan," Renewable Energy, Elsevier, vol. 150(C), pages 840-853.
    10. Li, Jing & Gao, Guangtao & Kutlu, Cagri & Liu, Keliang & Pei, Gang & Su, Yuehong & Ji, Jie & Riffat, Saffa, 2019. "A novel approach to thermal storage of direct steam generation solar power systems through two-step heat discharge," Applied Energy, Elsevier, vol. 236(C), pages 81-100.
    11. Laha, Priyanka & Chakraborty, Basab, 2021. "Low carbon electricity system for India in 2030 based on multi-objective multi-criteria assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    12. Elfeky, Karem Elsayed & Wang, Qiuwang, 2023. "Techno-environ-economic assessment of photovoltaic and CSP with storage systems in China and Egypt under various climatic conditions," Renewable Energy, Elsevier, vol. 215(C).
    13. Xiaoru Zhuang & Xinhai Xu & Wenrui Liu & Wenfu Xu, 2019. "LCOE Analysis of Tower Concentrating Solar Power Plants Using Different Molten-Salts for Thermal Energy Storage in China," Energies, MDPI, vol. 12(7), pages 1-17, April.
    14. McTigue, Joshua D. & Castro, Jose & Mungas, Greg & Kramer, Nick & King, John & Turchi, Craig & Zhu, Guangdong, 2018. "Hybridizing a geothermal power plant with concentrating solar power and thermal storage to increase power generation and dispatchability," Applied Energy, Elsevier, vol. 228(C), pages 1837-1852.
    15. WenminQin, & Wang, Lunche & Gueymard, Christian A. & Bilal, Muhammad & Lin, Aiwen & Wei, Jing & Zhang, Ming & Yang, Xuefang, 2020. "Constructing a gridded direct normal irradiance dataset in China during 1981–2014," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    16. Eko Supriyanto & Jayan Sentanuhady & Wisnu Hozaifa Hasan & Ariyana Dwiputra Nugraha & Muhammad Akhsin Muflikhun, 2022. "Policy and Strategies of Tariff Incentives Related to Renewable Energy: Comparison between Indonesia and Other Developing and Developed Countries," Sustainability, MDPI, vol. 14(20), pages 1-17, October.
    17. Hoz, Jordi de la & Martín, Helena & Montalà, Montserrat & Matas, José & Guzman, Ramon, 2018. "Assessing the 2014 retroactive regulatory framework applied to the concentrating solar power systems in Spain," Applied Energy, Elsevier, vol. 212(C), pages 1377-1399.
    18. Qimei Chen & Yan Wang & Jianhan Zhang & Zhifeng Wang, 2020. "The Knowledge Mapping of Concentrating Solar Power Development Based on Literature Analysis Technology," Energies, MDPI, vol. 13(8), pages 1-15, April.
    19. Fan, Jing-Li & Wei, Shijie & Yang, Lin & Wang, Hang & Zhong, Ping & Zhang, Xian, 2019. "Comparison of the LCOE between coal-fired power plants with CCS and main low-carbon generation technologies: Evidence from China," Energy, Elsevier, vol. 176(C), pages 143-155.
    20. Ren, Siyue & Feng, Xiao & Yang, Minbo, 2023. "Solution of issues in emergy theory caused by pathway tracking: Taking China's power generation system as an example," Energy, Elsevier, vol. 262(PB).
    21. 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.
    22. Simsek, Yeliz & Watts, David & Escobar, Rodrigo, 2018. "Sustainability evaluation of Concentrated Solar Power (CSP) projects under Clean Development Mechanism (CDM) by using Multi Criteria Decision Method (MCDM)," Renewable and Sustainable Energy Reviews, Elsevier, vol. 93(C), pages 421-438.
    23. Li, Jianglong & Huang, Jiashun, 2020. "The expansion of China's solar energy: Challenges and policy options," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    24. Cibelle Pereira Trama & Amaro Olímpio Pereira Júnior & Ana Paula Cardoso Guimarães & André Luiz Diniz & Leonardo dos Santos Reis Vieira, 2021. "Cost–Benefit Analysis of Solar Thermal Plants with Storage in a Hydrothermal System," Energies, MDPI, vol. 14(18), pages 1-27, September.
    25. Mahmood Shafiee & Adel Alghamdi & Chris Sansom & Phil Hart & Adriana Encinas-Oropesa, 2020. "A Through-Life Cost Analysis Model to Support Investment Decision-Making in Concentrated Solar Power Projects," Energies, MDPI, vol. 13(7), pages 1-20, March.

    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. Xiaoru Zhuang & Xinhai Xu & Wenrui Liu & Wenfu Xu, 2019. "LCOE Analysis of Tower Concentrating Solar Power Plants Using Different Molten-Salts for Thermal Energy Storage in China," Energies, MDPI, vol. 12(7), pages 1-17, April.
    2. Xu, Xinhai & Vignarooban, K. & Xu, Ben & Hsu, K. & Kannan, A.M., 2016. "Prospects and problems of concentrating solar power technologies for power generation in the desert regions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1106-1131.
    3. Tarun Kumar Aseri & Chandan Sharma & Tara C. Kandpal, 2022. "Condenser cooling technologies for concentrating solar power plants: a review," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 4511-4565, April.
    4. Hoz, Jordi de la & Martín, Helena & Montalà, Montserrat & Matas, José & Guzman, Ramon, 2018. "Assessing the 2014 retroactive regulatory framework applied to the concentrating solar power systems in Spain," Applied Energy, Elsevier, vol. 212(C), pages 1377-1399.
    5. Martín, Helena & de la Hoz, Jordi & Velasco, Guillermo & Castilla, Miguel & García de Vicuña, José Luís, 2015. "Promotion of concentrating solar thermal power (CSP) in Spain: Performance analysis of the period 1998–2013," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1052-1068.
    6. Malagueta, Diego & Szklo, Alexandre & Borba, Bruno Soares Moreira Cesar & Soria, Rafael & Aragão, Raymundo & Schaeffer, Roberto & Dutra, Ricardo, 2013. "Assessing incentive policies for integrating centralized solar power generation in the Brazilian electric power system," Energy Policy, Elsevier, vol. 59(C), pages 198-212.
    7. Labordena, Mercè & Patt, Anthony & Bazilian, Morgan & Howells, Mark & Lilliestam, Johan, 2017. "Impact of political and economic barriers for concentrating solar power in Sub-Saharan Africa," Energy Policy, Elsevier, vol. 102(C), pages 52-72.
    8. Li, Yuqiang & Liao, Shengming & Rao, Zhenghua & Liu, Gang, 2014. "A dynamic assessment based feasibility study of concentrating solar power in China," Renewable Energy, Elsevier, vol. 69(C), pages 34-42.
    9. 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.
    10. Sharma, Chandan & Sharma, Ashish K. & Mullick, Subhash C. & Kandpal, Tara C., 2015. "Assessment of solar thermal power generation potential in India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 902-912.
    11. Damien Bazin & Nouri Chtourou & Amna Omri, 2019. "Risk management and policy implications for concentrating solar power technology investments in Tunisia," Post-Print hal-02061788, HAL.
    12. Sweerts, Bart & Longa, Francesco Dalla & van der Zwaan, Bob, 2019. "Financial de-risking to unlock Africa's renewable energy potential," Renewable and Sustainable Energy Reviews, Elsevier, vol. 102(C), pages 75-82.
    13. Lai, Chun Sing & McCulloch, Malcolm D., 2017. "Levelized cost of electricity for solar photovoltaic and electrical energy storage," Applied Energy, Elsevier, vol. 190(C), pages 191-203.
    14. Yuan, Jiahai & Sun, Shenghui & Zhang, Wenhua & Xiong, Minpeng, 2014. "The economy of distributed PV in China," Energy, Elsevier, vol. 78(C), pages 939-949.
    15. Shen, Wei & Chen, Xi & Qiu, Jing & Hayward, Jennifier A & Sayeef, Saad & Osman, Peter & Meng, Ke & Dong, Zhao Yang, 2020. "A comprehensive review of variable renewable energy levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    16. George A. Gonzalez, 2016. "Transforming Energy: Solving Climate Change with Technology Policy . New York : Cambridge University Press . 360 pages. ISBN 9781107614970, $29.99 paperback. Anthony Patt , 2015 ," Review of Policy Research, Policy Studies Organization, vol. 33(1), pages 111-113, January.
    17. Tao, Jacqueline Yujia & Finenko, Anton, 2016. "Moving beyond LCOE: impact of various financing methods on PV profitability for SIDS," Energy Policy, Elsevier, vol. 98(C), pages 749-758.
    18. Malagueta, Diego & Szklo, Alexandre & Soria, Rafael & Dutra, Ricardo & Schaeffer, Roberto & Moreira Cesar Borba, Bruno Soares, 2014. "Potential and impacts of Concentrated Solar Power (CSP) integration in the Brazilian electric power system," Renewable Energy, Elsevier, vol. 68(C), pages 223-235.
    19. Wang, Yongli & Gao, Mingchen & Wang, Jingyan & Wang, Shuo & Liu, Yang & Zhu, Jinrong & Tan, Zhongfu, 2021. "Measurement and key influencing factors of the economic benefits for China’s photovoltaic power generation: A LCOE-based hybrid model," Renewable Energy, Elsevier, vol. 169(C), pages 935-952.
    20. Ndala Y. Mulongo & Pule A. Kholopane, 2018. "Cost Assessment: Electricity Generating Sources Against Energy Efficiency Measures," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-28, March.

    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:120:y:2017:i:c:p:117-127. 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.