IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v13y2020i7p1553-d337596.html
   My bibliography  Save this article

A Through-Life Cost Analysis Model to Support Investment Decision-Making in Concentrated Solar Power Projects

Author

Listed:
  • Mahmood Shafiee

    (School of Engineering and Digital Arts, University of Kent, Canterbury CT2 7NT, UK
    Department of Energy and Power, Cranfield University, Bedfordshire MK43 0AL, UK)

  • Adel Alghamdi

    (Department of Energy and Power, Cranfield University, Bedfordshire MK43 0AL, UK)

  • Chris Sansom

    (Department of Energy and Power, Cranfield University, Bedfordshire MK43 0AL, UK)

  • Phil Hart

    (Department of Energy and Power, Cranfield University, Bedfordshire MK43 0AL, UK)

  • Adriana Encinas-Oropesa

    (Centre for Competitive Creative Design, Cranfield University, Bedfordshire MK43 0AL, UK)

Abstract

This research paper aims to propose a through-life cost analysis model for estimating the profitability of renewable concentrated solar power (CSP) technologies. The financial outputs of the model include net present value (NPV) and benefit-cost ratio (BCR) of the project, internal rate of return (IRR) and discounted payback period (DPBP) of the investment, and levelized cost of energy (LCoE) from the CSP technology. The meteorological data for a specific location in the city of Tucson in Arizona is collected from a network of automated weather stations, and the NREL System Advisor Model (SAM) is applied to simulate hourly energy output of the CSP plant. An Excel spreadsheet tool is designed to calculate, in a bottom-up approach, the financial metrics required for approval of CSP projects. The model is tested on a 50 MW parabolic trough CSP plant and the results show an annual energy production of 456,351,232 kWh, NPV of over $64 million and LCoE of 0.16 $/kWh. Finally, a sensitivity analysis is performed to identify the factors which have the most significant effect on the economic performance of CSP technologies. The proposed model can provide valuable guidance to support the strategic planning and investment decision-making in CSP projects.

Suggested Citation

  • 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.
  • Handle: RePEc:gam:jeners:v:13:y:2020:i:7:p:1553-:d:337596
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/13/7/1553/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/13/7/1553/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bhattarai, Sujala & Kafle, Gopi Krishna & Euh, Seung-Hee & Oh, Jae-Heun & Kim, Dae Hyun, 2013. "Comparative study of photovoltaic and thermal solar systems with different storage capacities: Performance evaluation and economic analysis," Energy, Elsevier, vol. 61(C), pages 272-282.
    2. 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.
    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. Enkhbayar Shagdar & Bachirou Guene Lougou & Batmunkh Sereeter & Yong Shuai & Azeem Mustafa & Enkhjin Ganbold & Dongmei Han, 2022. "Performance Analysis of the 50 MW Concentrating Solar Power Plant under Various Operation Conditions," Energies, MDPI, vol. 15(4), pages 1-24, February.
    2. Afra, Mohammad & Peyghambarzadeh, S.M. & Shahbazi, Khalil & Tahmassebi, Narges, 2021. "Thermo-economic optimization of steam injection operation in enhanced oil recovery (EOR) using nano-thermal insulation," Energy, Elsevier, vol. 226(C).
    3. Zhixian Wang & Ying Wang & Qia Ding & Chen Wang & Kaifeng Zhang, 2020. "Energy Storage Economic Analysis of Multi-Application Scenarios in an Electricity Market: A Case Study of China," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    4. Suzan Abdelhady & Mohamed A. Shalaby & Ahmed Shaban, 2021. "Techno-Economic Analysis for the Optimal Design of a National Network of Agro-Energy Biomass Power Plants in Egypt," Energies, MDPI, vol. 14(11), pages 1-26, May.
    5. Ming Tao & Yanzhe Yu & Huan Zhang & Tianzhen Ye & Shijun You & Mengting Zhang, 2021. "Research on the Optimization Design of Solar Energy-Gas-Fired Boiler Systems for Decentralized Heating," Energies, MDPI, vol. 14(11), pages 1-27, May.
    6. Milford, James & Henrion, Max & Hunter, Chad & Newes, Emily & Hughes, Caroline & Baldwin, Samuel F., 2022. "Energy sector portfolio analysis with uncertainty," Applied Energy, Elsevier, vol. 306(PA).
    7. Mika Fabricius & Daniel Øland Tarp & Thomas Wehl Rasmussen & Ahmad Arabkoohsar, 2020. "Utilization of Excess Production of Waste-Fired CHP Plants for District Cooling Supply, an Effective Solution for a Serious Challenge," Energies, MDPI, vol. 13(13), pages 1-21, June.

    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. 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.
    2. 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.
    3. 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).
    4. 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.
    5. 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.
    6. Guo, Chao & Ji, Jie & Sun, Wei & Ma, Jinwei & He, Wei & Wang, Yanqiu, 2015. "Numerical simulation and experimental validation of tri-functional photovoltaic/thermal solar collector," Energy, Elsevier, vol. 87(C), pages 470-480.
    7. Karadöl, İsrafil & Yıldız, Ceyhun & Şekkeli, Mustafa, 2021. "Determining optimal spatial and temporal complementarity between wind and hydropower," Energy, Elsevier, vol. 230(C).
    8. 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.
    9. 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).
    10. Essa, Mohamed A. & Talaat, M. & Amer, Abdalla & Farahat, M.A., 2021. "Enhancing the photovoltaic system efficiency using porous metallic media integrated with phase change material," Energy, Elsevier, vol. 225(C).
    11. Yilmaz, Saban & Ozcalik, Hasan Riza & Kesler, Selami & Dincer, Furkan & Yelmen, Bekir, 2015. "The analysis of different PV power systems for the determination of optimal PV panels and system installation—A case study in Kahramanmaras, Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1015-1024.
    12. 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.
    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. 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.
    15. 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).
    16. Hissouf, Mohamed & Feddaoui, M’barek & Najim, Monssif & Charef, Adil, 2020. "Performance of a photovoltaic-thermal solar collector using two types of working fluids at different fluid channels geometry," Renewable Energy, Elsevier, vol. 162(C), pages 1723-1734.
    17. Abadeh, Abazar & Rejeb, Oussama & Sardarabadi, Mohammad & Menezo, Christophe & Passandideh-Fard, Mohammad & Jemni, Abdelmajid, 2018. "Economic and environmental analysis of using metal-oxides/water nanofluid in photovoltaic thermal systems (PVTs)," Energy, Elsevier, vol. 159(C), pages 1234-1243.
    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. Yuan, Weiqi & Ji, Jie & Li, Zhaomeng & Zhou, Fan & Ren, Xiao & Zhao, Xudong & Liu, Shuli, 2018. "Comparison study of the performance of two kinds of photovoltaic/thermal(PV/T) systems and a PV module at high ambient temperature," Energy, Elsevier, vol. 148(C), pages 1153-1161.
    20. Michael, Jee Joe & S, Iniyan & Goic, Ranko, 2015. "Flat plate solar photovoltaic–thermal (PV/T) systems: A reference guide," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 62-88.

    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:gam:jeners:v:13:y:2020:i:7:p:1553-:d:337596. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.