IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v104y2016icp89-101.html
   My bibliography  Save this article

Grid parity in tidal stream energy projects: An assessment of financial, technological and economic LCOE input parameters

Author

Listed:
  • Vazquez, A.
  • Iglesias, G.

Abstract

Assessments in electricity production technologies are usually supported by a levelised cost of energy (LCOE) analysis. Such cost analyses are riddled with uncertainty, with LCOE values depending on a number of financial, technical and economic variables. When it comes to minimising LCOE, the question arises as to which parameters have a greater bearing — especially if the current grid parity gap between tidal stream energy and conventional sources is to be narrowed. The aim of this study is to investigate the independent effects of the input variables on LCOE values, in order to determine the main drivers in closing the grid parity gap between tidal stream energy costs and traditional grid-power costs. The assessment features six tidal stream farms, in which different numbers of turbines, rows and spacing are considered. Not only are the device interactions of each configuration considered (by means of numerical modelling) but also the impacts of the financial and economic variables. In addition to individual variable sensitivity, a multivariable scenario analysis estimates the combined effect on the projected LCOE of varying an entire set of inputs simultaneously. As a result, it is found that the power coefficient is one of the inputs with the greatest bearing on the LCOE, closely followed by the discount rate and the capital costs (CAPEX). On this basis, a LCOE best-case scenario is constructed, which characterises tidal stream energy projects in terms of economic viability over a variety of conditions in four countries.

Suggested Citation

  • Vazquez, A. & Iglesias, G., 2016. "Grid parity in tidal stream energy projects: An assessment of financial, technological and economic LCOE input parameters," Technological Forecasting and Social Change, Elsevier, vol. 104(C), pages 89-101.
    • Handle: RePEc:eee:tefoso:v:104:y:2016:i:c:p:89-101
    DOI: 10.1016/j.techfore.2015.12.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162515004114
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2015.12.007?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. Carballo, R. & Sánchez, M. & Ramos, V. & Taveira-Pinto, F. & Iglesias, G., 2014. "A high resolution geospatial database for wave energy exploitation," Energy, Elsevier, vol. 68(C), pages 572-583.
    2. Ramos, V. & Carballo, R. & Álvarez, M. & Sánchez, M. & Iglesias, G., 2013. "Assessment of the impacts of tidal stream energy through high-resolution numerical modeling," Energy, Elsevier, vol. 61(C), pages 541-554.
    3. Malki, Rami & Masters, Ian & Williams, Alison J. & Nick Croft, T., 2014. "Planning tidal stream turbine array layouts using a coupled blade element momentum – computational fluid dynamics model," Renewable Energy, Elsevier, vol. 63(C), pages 46-54.
    4. Vazquez, A. & Iglesias, G., 2015. "LCOE (levelised cost of energy) mapping: A new geospatial tool for tidal stream energy," Energy, Elsevier, vol. 91(C), pages 192-201.
    5. Defne, Zafer & Haas, Kevin A. & Fritz, Hermann M., 2011. "Numerical modeling of tidal currents and the effects of power extraction on estuarine hydrodynamics along the Georgia coast, USA," Renewable Energy, Elsevier, vol. 36(12), pages 3461-3471.
    6. Andrea Masini & Emanuela Menichetti, 2013. "Investment decisions in the renewable energy sector: An analysis of non-financial drivers," Post-Print hal-00796331, HAL.
    7. Vicinanza, D. & Contestabile, P. & Ferrante, V., 2013. "Wave energy potential in the north-west of Sardinia (Italy)," Renewable Energy, Elsevier, vol. 50(C), pages 506-521.
    8. 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.
    9. Andrea Masini & Emanuela Menichetti, 2013. "Investment Decisions in the Renewable Energy Sector: An Analysis of Non-Financial Drivers," Working Papers hal-01947453, HAL.
    10. Masini, Andrea & Menichetti , Emanuela, 2013. "Investment Decisions in the Renewable Energy Sector: An Analysis of Non-Financial Drivers," HEC Research Papers Series 976, HEC Paris.
    11. Robins, Peter E. & Neill, Simon P. & Lewis, Matt J., 2014. "Impact of tidal-stream arrays in relation to the natural variability of sedimentary processes," Renewable Energy, Elsevier, vol. 72(C), pages 311-321.
    12. Lee, Ju Hyun & Park, Sunho & Kim, Dong Hwan & Rhee, Shin Hyung & Kim, Moon-Chan, 2012. "Computational methods for performance analysis of horizontal axis tidal stream turbines," Applied Energy, Elsevier, vol. 98(C), pages 512-523.
    13. Sánchez, M. & Carballo, R. & Ramos, V. & Iglesias, G., 2014. "Tidal stream energy impact on the transient and residual flow in an estuary: A 3D analysis," Applied Energy, Elsevier, vol. 116(C), pages 167-177.
    14. Robins, Peter E. & Neill, Simon P. & Lewis, Matt J. & Ward, Sophie L., 2015. "Characterising the spatial and temporal variability of the tidal-stream energy resource over the northwest European shelf seas," Applied Energy, Elsevier, vol. 147(C), pages 510-522.
    15. Sanchez, M. & Carballo, R. & Ramos, V. & Iglesias, G., 2014. "Floating vs. bottom-fixed turbines for tidal stream energy: A comparative impact assessment," Energy, Elsevier, vol. 72(C), pages 691-701.
    16. Beels, Charlotte & Troch, Peter & Kofoed, Jens Peter & Frigaard, Peter & Vindahl Kringelum, Jon & Carsten Kromann, Peter & Heyman Donovan, Martin & De Rouck, Julien & De Backer, Griet, 2011. "A methodology for production and cost assessment of a farm of wave energy converters," Renewable Energy, Elsevier, vol. 36(12), pages 3402-3416.
    17. Ahmadian, Reza & Falconer, Roger & Bockelmann-Evans, Bettina, 2012. "Far-field modelling of the hydro-environmental impact of tidal stream turbines," Renewable Energy, Elsevier, vol. 38(1), pages 107-116.
    18. Ramos, V. & Carballo, R. & Álvarez, M. & Sánchez, M. & Iglesias, G., 2014. "A port towards energy self-sufficiency using tidal stream power," Energy, Elsevier, vol. 71(C), pages 432-444.
    19. Yun Seng Lim & Siong Lee Koh, 2009. "Marine Tidal Current Electric Power Generation: State of Art and Current Status," Chapters, in: Thomas Hammons (ed.), Renewable Energy, IntechOpen.
    20. Karakaya, Emrah & Hidalgo, Antonio & Nuur, Cali, 2015. "Motivators for adoption of photovoltaic systems at grid parity: A case study from Southern Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 1090-1098.
    21. Verbruggen, Aviel & Fischedick, Manfred & Moomaw, William & Weir, Tony & Nadaï, Alain & Nilsson, Lars J. & Nyboer, John & Sathaye, Jayant, 2010. "Renewable energy costs, potentials, barriers: Conceptual issues," Energy Policy, Elsevier, vol. 38(2), pages 850-861, February.
    22. Astariz, S. & Perez-Collazo, C. & Abanades, J. & Iglesias, G., 2015. "Co-located wave-wind farms: Economic assessment as a function of layout," Renewable Energy, Elsevier, vol. 83(C), pages 837-849.
    23. Abanades, J. & Greaves, D. & Iglesias, G., 2015. "Coastal defence using wave farms: The role of farm-to-coast distance," Renewable Energy, Elsevier, vol. 75(C), pages 572-582.
    24. 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.
    25. Neill, Simon P. & Hashemi, M. Reza & Lewis, Matt J., 2014. "The role of tidal asymmetry in characterizing the tidal energy resource of Orkney," Renewable Energy, Elsevier, vol. 68(C), pages 337-350.
    26. Astariz, S. & Iglesias, G., 2015. "The economics of wave energy: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 397-408.
    27. Bahaj, A.S. & Molland, A.F. & Chaplin, J.R. & Batten, W.M.J., 2007. "Power and thrust measurements of marine current turbines under various hydrodynamic flow conditions in a cavitation tunnel and a towing tank," Renewable Energy, Elsevier, vol. 32(3), pages 407-426.
    28. Blunden, L.S. & Bahaj, A.S., 2006. "Initial evaluation of tidal stream energy resources at Portland Bill, UK," Renewable Energy, Elsevier, vol. 31(2), pages 121-132.
    29. Vennell, Ross & Funke, Simon W. & Draper, Scott & Stevens, Craig & Divett, Tim, 2015. "Designing large arrays of tidal turbines: A synthesis and review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 454-472.
    30. Masini, Andrea & Menichetti, Emanuela, 2013. "Investment decisions in the renewable energy sector: An analysis of non-financial drivers," Technological Forecasting and Social Change, Elsevier, vol. 80(3), pages 510-524.
    31. Ohunakin, S. Olayinka & Ojolo, S. Joshua & Ogunsina, S. Babatunde & Dinrifo, R. Rufus, 2012. "Analysis of cost estimation and wind energy evaluation using wind energy conversion systems (WECS) for electricity generation in six selected high altitude locations in Nigeria," Energy Policy, Elsevier, vol. 48(C), pages 594-600.
    32. Pacheco, A. & Ferreira, Ó. & Carballo, R. & Iglesias, G., 2014. "Evaluation of the production of tidal stream energy in an inlet channel by coupling field data and numerical modelling," Energy, Elsevier, vol. 71(C), pages 104-117.
    33. Riccardo Squatrito & Filippo Sgroi & Salvatore Tudisca & Anna Maria Di Trapani & Riccardo Testa, 2014. "Post Feed-in Scheme Photovoltaic System Feasibility Evaluation in Italy: Sicilian Case Studies," Energies, MDPI, vol. 7(11), pages 1-19, November.
    34. MacGillivray, Andrew & Jeffrey, Henry & Winskel, Mark & Bryden, Ian, 2014. "Innovation and cost reduction for marine renewable energy: A learning investment sensitivity analysis," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 108-124.
    35. Jeffrey, Henry & Sedgwick, Jonathan & Gerrard, Gavin, 2014. "Public funding for ocean energy: A comparison of the UK and U.S," Technological Forecasting and Social Change, Elsevier, vol. 84(C), pages 155-170.
    36. Carballo, R. & Iglesias, G. & Castro, A., 2009. "Numerical model evaluation of tidal stream energy resources in the Ría de Muros (NW Spain)," Renewable Energy, Elsevier, vol. 34(6), pages 1517-1524.
    37. 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.
    38. Li, Ye, 2014. "On the definition of the power coefficient of tidal current turbines and efficiency of tidal current turbine farms," Renewable Energy, Elsevier, vol. 68(C), pages 868-875.
    39. Sánchez, M. & Carballo, R. & Ramos, V. & Iglesias, G., 2014. "Energy production from tidal currents in an estuary: A comparative study of floating and bottom-fixed turbines," Energy, Elsevier, vol. 77(C), pages 802-811.
    40. Winskel, Mark & Markusson, Nils & Jeffrey, Henry & Candelise, Chiara & Dutton, Geoff & Howarth, Paul & Jablonski, Sophie & Kalyvas, Christos & Ward, David, 2014. "Learning pathways for energy supply technologies: Bridging between innovation studies and learning rates," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 96-114.
    41. Fairley, Iain & Evans, Paul & Wooldridge, Chris & Willis, Miles & Masters, Ian, 2013. "Evaluation of tidal stream resource in a potential array area via direct measurements," Renewable Energy, Elsevier, vol. 57(C), pages 70-78.
    42. Pérez-Collazo, C. & Greaves, D. & Iglesias, G., 2015. "A review of combined wave and offshore wind energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 141-153.
    43. Munoz, L.A. Hurtado & Huijben, J.C.C.M. & Verhees, B. & Verbong, G.P.J., 2014. "The power of grid parity: A discursive approach," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 179-190.
    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. Changwan Gu & Jingjing Xie & Xiaoyu Li & Xu Gao, 2023. "Levelized Cost Analysis for Blast Furnace CO 2 Capture, Utilization, and Storage Retrofit in China’s Blast Furnace–Basic Oxygen Furnace Steel Plants," Energies, MDPI, vol. 16(23), pages 1-20, November.
    2. Martinez, A. & Iglesias, G., 2022. "Mapping of the levelised cost of energy for floating offshore wind in the European Atlantic," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    3. Eva Segura & Rafael Morales & José A. Somolinos, 2019. "Influence of Automated Maneuvers on the Economic Feasibility of Tidal Energy Farms," Sustainability, MDPI, vol. 11(21), pages 1-22, October.
    4. Fouz, D.M. & Carballo, R. & López, I. & González, X.P. & Iglesias, G., 2023. "A methodology for cost-effective analysis of hydrokinetic energy projects," Energy, Elsevier, vol. 282(C).
    5. Astariz, S. & Iglesias, G., 2016. "Co-located wind and wave energy farms: Uniformly distributed arrays," Energy, Elsevier, vol. 113(C), pages 497-508.
    6. Pasquale Contestabile & Enrico Di Lauro & Mariano Buccino & Diego Vicinanza, 2016. "Economic Assessment of Overtopping BReakwater for Energy Conversion (OBREC): A Case Study in Western Australia," Sustainability, MDPI, vol. 9(1), pages 1-28, December.
    7. Brown, S.A. & Ransley, E.J. & Xie, N. & Monk, K. & De Angelis, G.M. & Nicholls-Lee, R. & Guerrini, E. & Greaves, D.M., 2021. "On the impact of motion-thrust coupling in floating tidal energy applications," Applied Energy, Elsevier, vol. 282(PB).
    8. Vazquez, A. & Iglesias, G., 2016. "Capital costs in tidal stream energy projects – A spatial approach," Energy, Elsevier, vol. 107(C), pages 215-226.
    9. Zhang, M.M. & Zhang, C. & Liu, L.Y. & Zhou, D.Q., 2020. "Is it time to launch grid parity in the Chinese solar photovoltaic industry? Evidence from 335 cities," Energy Policy, Elsevier, vol. 147(C).
    10. Jenkins, Lekelia Danielle & Dreyer, Stacia Jeanne & Polis, Hilary Jacqueline & Beaver, Ezra & Kowalski, Adam A. & Linder, Hannah L. & McMillin, Thomas Neal & McTiernan, Kaylie Laura & Rogier, Thea The, 2018. "Human dimensions of tidal energy: A review of theories and frameworks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 97(C), pages 323-337.
    11. Rodrigues, N. & Pintassilgo, P. & Calhau, F. & González-Gorbeña, E. & Pacheco, A., 2021. "Cost-benefit analysis of tidal energy production in a coastal lagoon: The case of Ria Formosa – Portugal," Energy, Elsevier, vol. 229(C).

    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. Vazquez, A. & Iglesias, G., 2016. "Capital costs in tidal stream energy projects – A spatial approach," Energy, Elsevier, vol. 107(C), pages 215-226.
    2. Sánchez, M. & Carballo, R. & Ramos, V. & Iglesias, G., 2014. "Energy production from tidal currents in an estuary: A comparative study of floating and bottom-fixed turbines," Energy, Elsevier, vol. 77(C), pages 802-811.
    3. Vazquez, A. & Iglesias, G., 2015. "LCOE (levelised cost of energy) mapping: A new geospatial tool for tidal stream energy," Energy, Elsevier, vol. 91(C), pages 192-201.
    4. Fouz, D.M. & Carballo, R. & López, I. & González, X.P. & Iglesias, G., 2023. "A methodology for cost-effective analysis of hydrokinetic energy projects," Energy, Elsevier, vol. 282(C).
    5. 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.
    6. Evans, P. & Mason-Jones, A. & Wilson, C. & Wooldridge, C. & O'Doherty, T. & O'Doherty, D., 2015. "Constraints on extractable power from energetic tidal straits," Renewable Energy, Elsevier, vol. 81(C), pages 707-722.
    7. Eva Segura & Rafael Morales & José A. Somolinos, 2019. "Influence of Automated Maneuvers on the Economic Feasibility of Tidal Energy Farms," Sustainability, MDPI, vol. 11(21), pages 1-22, October.
    8. Álvarez, M. & Ramos, V. & Carballo, R. & Arean, N. & Torres, M. & Iglesias, G., 2020. "The influence of dredging for locating a tidal stream energy farm," Renewable Energy, Elsevier, vol. 146(C), pages 242-253.
    9. Khojasteh, Danial & Lewis, Matthew & Tavakoli, Sasan & Farzadkhoo, Maryam & Felder, Stefan & Iglesias, Gregorio & Glamore, William, 2022. "Sea level rise will change estuarine tidal energy: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    10. Fouz, D.M. & Carballo, R. & López, I. & Iglesias, G., 2022. "A holistic methodology for hydrokinetic energy site selection," Applied Energy, Elsevier, vol. 317(C).
    11. Guillou, Nicolas & Thiébot, Jérôme, 2016. "The impact of seabed rock roughness on tidal stream power extraction," Energy, Elsevier, vol. 112(C), pages 762-773.
    12. Mestres, Marc & Cerralbo, Pablo & Grifoll, Manel & Sierra, Joan Pau & Espino, Manuel, 2019. "Modelling assessment of the tidal stream resource in the Ria of Ferrol (NW Spain) using a year-long simulation," Renewable Energy, Elsevier, vol. 131(C), pages 811-817.
    13. Lewis, M. & Neill, S.P. & Robins, P.E. & Hashemi, M.R., 2015. "Resource assessment for future generations of tidal-stream energy arrays," Energy, Elsevier, vol. 83(C), pages 403-415.
    14. Ramos, V. & Carballo, R. & Ringwood, John V., 2019. "Application of the actuator disc theory of Delft3D-FLOW to model far-field hydrodynamic impacts of tidal turbines," Renewable Energy, Elsevier, vol. 139(C), pages 1320-1335.
    15. González-Gorbeña, Eduardo & Pacheco, André & Plomaritis, Theocharis A. & Ferreira, Óscar & Sequeira, Cláudia, 2018. "Estimating the optimum size of a tidal array at a multi-inlet system considering environmental and performance constraints," Applied Energy, Elsevier, vol. 232(C), pages 292-311.
    16. Ian Masters & Alison Williams & T. Nick Croft & Michael Togneri & Matt Edmunds & Enayatollah Zangiabadi & Iain Fairley & Harshinie Karunarathna, 2015. "A Comparison of Numerical Modelling Techniques for Tidal Stream Turbine Analysis," Energies, MDPI, vol. 8(8), pages 1-21, July.
    17. Deng, Guizhong & Zhang, Zhaoru & Li, Ye & Liu, Hailong & Xu, Wentao & Pan, Yulin, 2020. "Prospective of development of large-scale tidal current turbine array: An example numerical investigation of Zhejiang, China," Applied Energy, Elsevier, vol. 264(C).
    18. Thiébot, Jérôme & Bailly du Bois, Pascal & Guillou, Sylvain, 2015. "Numerical modeling of the effect of tidal stream turbines on the hydrodynamics and the sediment transport – Application to the Alderney Race (Raz Blanchard), France," Renewable Energy, Elsevier, vol. 75(C), pages 356-365.
    19. Faissal Jelti & Amine Allouhi & Mahmut Sami Büker & Rachid Saadani & Abdelmajid Jamil, 2021. "Renewable Power Generation: A Supply Chain Perspective," Sustainability, MDPI, vol. 13(3), pages 1-22, January.
    20. Curtin, Joseph & McInerney, Celine & Ó Gallachóir, Brian, 2017. "Financial incentives to mobilise local citizens as investors in low-carbon technologies: A systematic literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 534-547.

    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:tefoso:v:104:y:2016:i:c:p:89-101. 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.sciencedirect.com/science/journal/00401625 .

    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.