Average Lifetime Levelised Generating Costs
This chapter aims to provide a concise introduction to the methodology for calculating levelised costs of electricity generation It outlines the essential parameters and equations necessary for these calculations, which are based on the net power supplied to the station busbar that feeds electricity into the grid The cost estimation approach discounts a series of expenditures to their present values using a specified discount rate, reflecting the time value of money The levelised lifetime cost per kWh is derived from the total lifetime expenses divided by the total expected outputs, expressed in present value terms This cost represents the average price consumers would need to pay to cover the investor's capital, fuel, and operational expenses, including a return rate equal to the discount rate For the calculations in Chapter Five, the base year is set to 2005, excluding normal inflation from the analysis.
The formula to calculate for each power plant, the Average Lifetime Levelised Generating Costs is:
From this follows the ALLGC to:
It = Investment expenditures in year t
Mt = Operation and Maintenance expenditure in year t
Ft = Fuel expenditures in year t
Et = Electricity generation in year t r = Discount rate ALLGC = Average Lifetime Levelised Generating Costs (p)
Capital expenditures each year encompass construction, refurbishment, and decommissioning costs A widely accepted methodology for estimating these costs, as utilized by the OECD, involves defining the overnight construction cost (OIC) in €/kW and outlining the expense schedule throughout the construction phase The OIC represents the total immediate costs incurred for plant construction, with interest rates during this period potentially differing from the standard discount rate These capital costs contribute to the levelised generation cost, which serves as a foundation for cost comparisons and evaluations.
The fuel price assumptions of fossil and nuclear plants are described in chapter 3.
Operating and Maintenance (O&M) costs contribute a small but no negligent fraction to the total cost
• Fixed O&M costs [€/kWa] include cost of the operational staff, insurances, taxes etc.
• Variable O&M costs [€/MWh] include cost for maintenance, contracted personnel, consumed material (i.e operating materials, operating fluids) and cost for disposal of normal operational waste (exclude radioactive waste)
The discount rate that is considered appropriate for the energy sector may differ from plant to plant In this paper, two interest rates were used: 5% and 10%
The private cost of electricity generation encompasses the Average Long-Run Generation Cost (ALLGC) along with additional variable expenses that differ by plant, such as environmental taxes on fuels, carbon emission charges, and system integration costs For the sake of comparison, this discussion focuses solely on ALLGC as the representative measure of private costs.
Fuel prices
To accurately project future heat and electricity production costs, it is essential to consider the fuel price assumptions of various energy carriers These assumptions are often limited by the inherent uncertainties of the market and the principles of supply and demand Local energy carriers such as lignite and biomass (including straw, wood chips, and biogas) are not subject to international pricing mechanisms, leading to stable fuel prices when adjusted for inflation Notably, nuclear power involves comprehensive fuel cycle costs, encompassing natural uranium, conversion, enrichment, and waste disposal As illustrated in Table 1, oil prices are expected to rise initially, with natural gas following a similar trend, while constant prices for all energy carriers are projected post-2030.
Table 1 Fuel price assumptions on plant level /EUSUSTEL 2006/; /ETP 2008/
Heat credits for Combined Heat and Power
When comparing electricity power plants to combined heat and power (CHP) plants, it is essential to recognize the role of heat recovery in enhancing efficiency The value of recovered thermal energy is determined by the cost savings achieved by utilizing this energy instead of relying on traditional fuel sources, typically replacing the output from fuel-burning equipment like boilers This recovered heat generates an energy credit equivalent to the cost of fuel that would have been consumed otherwise The effectiveness of this energy displacement is influenced by the efficiency of the displaced heating system, with this report specifically examining a gas boiler that operates at an efficiency of 88%.
Back-Up costs
The integration of intermittent renewable energies, such as wind and solar power, poses challenges to the electricity generation system due to their inflexibility, variability, and unpredictability These fluctuations necessitate the use of backup technologies to ensure a stable energy supply The costs associated with the lack of guaranteed power generation from solar and wind sources can be quantified using a specific equation (Friedrich, 1989).
C BU = Cost Back-Up h v = Full loading hours, supply h w = Full loading hours of the renewable power station
P = Power credit of the renewable energy plant
A k = Annuity, incl the annual fix costs of the
The provision of back-up power for renewable technologies is influenced by a capacity factor (P), as noted by Kruck (2004) In this context, hard coal condensing power plants are utilized for minimum back-up costs, while gas-fired combined cycle gas turbine (CCGT) plants are employed for maximum back-up costs.
The technology characterization data illustrates the present status of commercial heat and power plants, as well as potential future technologies for electricity and heat generation Tables 2 to 4 present the assumed characteristic data for these electricity and heat generation technologies.
Table 2 Heat and electricity generation technologies 2007
Table 3 Heat and electricity generation technologies 2020
Table 4 Heat and electricity generation technologies 2030
Nuclear Power Plants
In 2004, nuclear energy accounted for 31% of electricity generation and 15% of total energy consumption in the EU-25 Despite historical public skepticism, largely due to the Chernobyl disaster, a resurgence in nuclear energy is becoming feasible Notably, nuclear power boasts low greenhouse gas emissions and stable electricity prices However, effective management of radioactive waste remains essential for the continued advancement of nuclear energy.
Nuclear fission reactors harness energy by splitting atoms of elements like uranium-235, uranium-233, or plutonium-239 In these reactors, the released energy generates heat, which is then used to produce steam for electricity generation The most prevalent type of nuclear reactor today is the Light Water Reactor (LWR), utilizing enriched uranium as fuel, with water serving as both coolant and moderator The two primary variants of LWRs are the Pressurized Water Reactor (PWR) and the Boiling Water Reactor (BWR) However, the electrical efficiency of nuclear power plants is limited to around 33% due to low operating temperatures.
The availability of modern reactors varies from 80 to 95% The output of power from large reactors can change with 30 to 40 MW per minute /MIT 2003/, but the technical minimum is 25%.
A typical lifetime for current reactors is 40 to 60 years.
The nuclear power industry has been advancing reactor technology for nearly fifty years, focusing on the development of next-generation systems Current advancements primarily involve "generation III" reactors, which enhance the performance of existing thermal reactors These third-generation reactors feature increased availability, extended operational lifespans of up to 60 years, improved safety measures to minimize core melt accident risks, higher burn-up rates to decrease fuel consumption and waste production, and reduced investment costs.
Generation IV reactors are excluded from private cost calculations due to their anticipated commercial deployment post-2030, making investment cost assumptions unpredictable An international working group is focused on developing six types of these reactors, with several utilizing a closed fuel cycle to optimize resource use and reduce high-level waste destined for repositories.
Next-generation IV reactors will feature advanced safety systems and are expected to utilize alternative coolants such as helium, sodium lead-bismuth, and molten salt instead of traditional light water A primary focus of the international working group is to address cost challenges, aiming to develop reactor designs with investment costs below $1,000 per megawatt.
Fossil Power Plants
Hard coal- and Lignite-fired power plants
Coal-fired power plants have been the leading source of electricity generation for many years, accounting for over 40% of global electricity production as of 2005 (IEA 2007) The fuel costs associated with coal represent about 40% of the total cost of electricity production This technology can utilize both hard coal and lignite, with a particular emphasis on lignite-fired plants due to the substantial lignite resources available in Europe.
Pulverized coal combustion (PCC) remains one of the oldest yet most prevalent technologies for electricity production In this process, coal is finely crushed and milled into powder, which is then combusted to generate heat for steam production, driving a steam turbine in a Rankine cycle for electricity generation PCC is renowned for its high availability and fuel flexibility, accommodating various coal types, including lignite, although lignite results in slightly lower efficiency due to its reduced heat content Recent advancements in PCC technology include supercritical pulverized coal combustion, which operates at steam conditions exceeding 221 bar and approximately 600°C, achieving efficiencies of 44.5% for lignite and 46% for hard coal.
Integrated Gasification Combined Cycle (IGCC):
The integrated gasification combined cycle (IGCC) technology combines coal gasification with a gas-fired combined cycle unit, producing syngas—a mixture of hydrogen and carbon monoxide—from coal This syngas is then utilized to generate electricity through a combined cycle power block, which includes both gas and steam turbine processes, similar to modern natural gas-fired power plants IGCC power plants offer higher efficiencies, reaching 44% for lignite and 45% for hard coal, along with lower emissions compared to conventional steam power plants They are versatile, capable of using various feedstocks such as lignite, hard coal, waste, or biomass, and provide favorable conditions for CO2 capture However, the complexity of IGCC power plants results in significantly higher investment costs than traditional coal power plants, with efficiency influenced by factors such as coal type, gasification technology, and turbine technology levels.
The future advancements in fossil fuel electricity generation technologies hinge on the innovation of new materials To enhance efficiency in modern coal-fired power plants, it is essential to develop materials that can withstand higher temperatures and pressures Additionally, research focused on improving the corrosion resistance of these materials is crucial for optimizing performance and longevity.
The PCC technology has been established for a long time, with no significant innovations anticipated in the near future However, enhancements such as elevated steam parameters, superheating steps, and lower condenser pressures can boost power plant efficiency to 52% for supercritical cases By 2030, IGCC power plants are expected to achieve efficiencies of up to 55% The advancement of IGCC technology relies on not only the development of new materials but also the enhancement of system component reliability Ultimately, IGCC technology holds the potential for substantial efficiency improvements beyond 50%.
Integrated Gasification Combined Cycle (IGCC) with CCS
This paper provides a brief overview of power plant technology that incorporates CO2 capture For a more comprehensive discussion on CO2 capture, transport, and storage, refer to the works of VGB (2004), MIT (2005), and IPCC (2007).
The sequestration of CO2 implies adding infrastructure to a common fossil power plant The
CO2 can be separated by three measures:
The CO2-separation technology in power plants necessitates additional components, which influence both the cost and efficiency, with investment costs reaching approximately €1370 per kW in 2020 This elevated initial investment correlates with increased operation and maintenance (O&M) expenses Notably, the costs associated with CO2 storage and transportation are not reflected in the specific investment figures for the IGCC power plant technology Furthermore, operational costs related to carbon capture and storage (CCS) will be incorporated into the overall fuel costs.
This study examines IGCC technology with CO2 capture, anticipated to be available post-2010 The process requires additional energy for compressing and liquefying the captured CO2, which is then injected at 110 bar into transportation pipelines The extraction of steam and electricity for CO2 compression from the electricity generation process decreases the overall efficiency of the power plant It is estimated that the efficiency penalty associated with CO2 capture is 6%, aligning with findings from Hendriks (2007).
Costs of CO2 transport and storage
A full economic analysis for generating costs of future power plants with CCS requires assumptions for CO2 transport and storage cost
Once CO2 is separated, it needs to be compressed to a high pressure of 80-120 bar to become a liquid, after which it is transported to storage sites via pipelines or ships at low temperatures The cost of transporting CO2 varies based on technical factors such as transmission capacity and pipeline diameter, as well as the transport distance and specific characteristics of the country Literature estimates indicate that the cost of CO2 transport ranges from 2 to 7 €/t CO2.
The cost of CO2 storage is influenced by factors such as accessibility, topography, and technical feasibility, with offshore storage being significantly more expensive than onshore options Additionally, the demand for CO2 in enhanced oil and gas recovery can create a market that enhances the economic viability of capture and storage Based on literature estimates, the costs associated with saline aquifers range from 1 to 8 €/t CO2.
The specific total cost for transport and storage of CO2 is assumed for 3 €/t CO2 and
15 €/t CO2 in lower case and upper case.
Natural gas-fired power plants
Natural gas power plants became a very popular technology for the electricity production. Since 1973 the worldwide share of natural gas for the power generation increased from 12.3% to almost 20% worldwide /IEA 2007/
The initial point of gas-fired power plants is a gas turbine This type of turbine can be adopted in a single configuration or in a combined cycle
The simple cycle gas turbine operates in an open cycle, where air is compressed before entering the combustion chamber for fuel injection and combustion The hot gases produced then expand in a turbine before being released into the atmosphere This configuration is highly flexible, primarily used for cycling and peak load applications While the efficiency of a single gas turbine is around 50%, it boasts low capital costs, making it an attractive option for energy generation.
Combined Cycle Gas Turbines (CCGTs) enhance the efficiency of traditional gas turbines by incorporating a steam turbine that utilizes residual heat from flue gases through a heat recovery steam generator This process operates within a closed Rankine cycle, achieving an overall efficiency of 57.5%, which is lower than that of a single gas turbine plant due to the combined cycles While CCGTs are less flexible than simple gas turbine units, they offer significant advantages, including low construction costs of approximately 440 €/kW and a relatively short construction time of 2-3 years.
Gas turbine and combined cycle gas turbine (CCGT) power plants are not anticipated to see significant technical advancements compared to coal power plants, and capital costs are expected to remain relatively low However, the introduction of new materials could lead to improvements, enabling higher turbine inlet temperatures and the potential for supercritical steam parameters By 2030, these advancements in materials and cooling technologies are projected to achieve an overall efficiency of 63%.
Combined Cycle Gas Turbine (CCGT) with CCS
The CCGT (Combined Cycle Gas Turbine) technology is the primary type of power plant utilizing Carbon Capture and Storage (CCS) for natural gas According to the characteristics outlined in Table 2-4, CCGT plants that implement CO2 separation experience a net efficiency reduction of approximately 6%.
Oil-fired power plants
Oil-fired power plants are no longer the leading technology for electricity generation in liberalized markets, with their global share dropping from approximately 25% in 1973 to just 6.6% by 2005, according to IEA 2007 Italy stands out in Europe with a relatively high proportion of oil-fired power plants, while most available oil reserves are primarily allocated for transportation, domestic heating, industrial heating, and the petrochemical sector Additionally, oil is utilized in sporadic peak power units, employing either condensing turbines for large-scale applications or conventional gas turbines.
Combined Heat and Power plants (CHP)
Combined heat and power (CHP), also known as cogeneration, is an efficient energy conversion process that generates electricity and useful heat simultaneously This dual production of energy can be achieved through two main methods: the electrochemical approach, such as fuel cells that convert chemical energy directly into electricity while producing some heat, and the classical thermal route, which relies on conventional power generation systems.
A number of mature electricity production technologies are well suited for CHP The CHP power plants can be divided in three main typologies:
• Gas turbines with heat recovering
• Steam turbines (back-pressure or extraction-condensing)
• Reciprocating engines (basically gas- and diesel engines)
This chapter on CHP will not claim of detailed description of these five technologies of cogeneration
Two types of production technologies (back pressure and extraction condensing) are short discussed in the following:
A back pressure combined heat and power (CHP) plant generates electricity similarly to a traditional power plant, but instead of releasing condensation heat with cooling water, it utilizes a district heating distribution system to cool the steam, thereby producing heat Another cogeneration method involves the controlled extraction operation of the steam turbine, which can function with either unfired or fired boiler systems This controlled extraction allows the steam flow to be adjusted according to demand, enabling varying amounts of steam to be allocated for heating or process applications, while any unused steam is condensed.
This paper analyzes fossil energy systems fueled by gas and hard coal, alongside biomass systems utilizing straw and wood chips It estimates 6000 full load hours annually, with a technical lifespan of 35 years for fossil fuel plants and 30 years for biomass plants Notably, there is a significant investment cost disparity between coal-fired and gas-fired plants, attributed to the use of Combined Cycle Gas Turbine (CCGT) technology for natural gas and condensing plants for hard coal In contrast, the investment costs for biomass Combined Heat and Power (CHP) plants range from €1750 to €2600 per kW, indicating a more consistent cost structure within biomass systems.
Mature combined heat and power (CHP) technologies are poised for enhanced efficiency, akin to advancements in other fossil fuel systems Carbon capture and storage (CCS) will be crucial for the evolution of future cogeneration facilities However, the investment costs for biomass CHP plants will remain higher compared to fossil fuel-fired plants.
Renewable Plants
Hydro
Hydropower is one of the oldest and most significant methods of electricity generation, contributing approximately 16% of the world's electricity supply, according to the IEA (2007) This renewable energy source harnesses the potential and kinetic energy of flowing water, converting it into electricity through turbines The efficiency of hydropower stations is notably high, making them a vital component of the global energy landscape.
Hydropower plants can operate efficiently at 80% to 95% capacity, serving as reliable base load stations Their rapid response capabilities also allow them to function effectively as power control service plants This section provides a brief overview of hydropower stations, focusing on their operational benefits rather than an in-depth analysis of the different types of plants.
In general, the hydro power plants are distinguished in the following types:
Hydropower technology is highly developed and efficient, featuring straightforward mechanical designs These power units vary significantly in capacity, ranging from a few kilowatts to several gigawatts According to the European Commission, hydropower systems are classified as large-scale or small-scale based on a threshold of 10 megawatts.
Hydropower stations exhibit impressive efficiency and availability rates exceeding 80% (EUSUSTEL 2006) While the initial investment for these facilities can be as high as €5,850 per kW, their operational generation costs remain remarkably low.
Current efficiencies in water extraction from tides are already high, with only minor technical improvements possible However, the investment costs associated with these enhancements are relatively high Various emerging technologies are being tested for this purpose, but both the technical and economic projections remain speculative.
Wind
As of the end of 2006, global wind-powered generator capacity reached 73.9 GW, contributing slightly over 1% of the world's electricity supply Notably, this renewable energy source represents about 20% of Denmark's electricity production, 9% in Spain, and 7% in Germany.
Over the past 15 to 20 years, wind energy has experienced remarkable global growth, evolving from early 1980s technology featuring 20 to 30 kW fixed-speed stall-regulated turbines with basic asynchronous generators to today's advanced wind turbines ranging from 2 to 5 MW These modern turbines incorporate cutting-edge components such as variable speed pitch systems, innovative control mechanisms, and gearless direct drive generators Wind energy is primarily harnessed through grid-connected systems, although it can also be utilized in stand-alone setups, with most wind power plants integrated into the electrical grid.
Wind turbines are primarily categorized by the orientation of their drive shafts, which can be either horizontal axis or vertical axis The dominant type in use today is the horizontal axis turbine, typically featuring two or three blades, accounting for nearly 100% of current installations A wind turbine comprises three essential components: the rotor, tower, and foundation Modern wind turbines achieve an efficiency of 45 to 50%, although according to Betz's law, only 59% of the wind's kinetic energy can be converted into mechanical energy Over the past 15 years, the efficiency of wind turbines has improved by 2-3% annually.
Offshore wind development is steadily gaining traction, particularly in north-western European countries, where it is becoming increasingly significant due to limited onshore power plant sites and their lower electricity generation capacity Although offshore projects require approximately double the investment costs, interest continues to rise, driven by the advantages of harnessing wind kinetic energy in less turbulent conditions and at higher wind speeds This results in expected utilization times exceeding 3,000 hours annually, compared to the 2,000 to 2,600 hours typical for onshore wind power plants Economically, the cost of wind-generated electricity is primarily influenced by the plant's investment costs and the turbine's electricity production rate.
The future of wind technology is expected to focus on the up-scaling of turbines to reduce foundation and cabling costs, with current offshore and onshore turbines ranging from 2 to 3 MW commercially available, and larger prototypes in development The anticipated growth in turbine size, potentially exceeding 10 MW in the coming decades, faces logistical challenges in material transport rather than physical limitations Although a shift to gearless wind turbines could address gearbox issues, it is not expected As turbine capacity increases, so too will the dimensions of towers and blades, necessitating innovations to decrease the weight of blades—favoring carbon fibers over glass fibers—and foundations The choice of foundation type will vary based on the turbine's location, particularly for sites with water depths exceeding 30 meters, which require alternative designs to traditional monopile foundations.
Photovoltaic PV
Photovoltaic (PV) technology directly converts solar radiation into electricity through PV cells made of semiconductor materials, generating direct current Typically, a single PV cell has a peak capacity ranging from 50 to 150 watts Due to its modular nature, PV systems are composed of interconnected PV cells, allowing them to achieve peak capacities of several megawatts.
Over the past decade, the global installed capacity of photovoltaic (PV) systems has significantly risen, reaching approximately 5.7 GW by 2006, with the majority of this capacity produced in Japan, the United States, and Europe.
Photovoltaic (PV) systems are categorized into two main types: building-integrated systems, which include installations on facades or roofs, and centralized systems, typically found in ground-mounted power plants For grid-connected PV systems, an inverter is essential to convert the direct current produced by the PV cells into alternating current.
Various semiconductor materials are utilized in the production of photovoltaic (PV) cells, with crystalline silicon being the most prevalent choice in modern installations Crystalline silicon is categorized into two primary types: single-crystalline (sc) and multi-crystalline (mc) silicon This study focuses on multi-crystalline PV cells, which are currently the most widely used and offer an efficiency of approximately 15%.
The cost of electricity generation from photovoltaic (PV) systems is significantly higher than that of other technologies, primarily due to the energy-intensive manufacturing process of PV cells, which leads to elevated investment costs Additionally, the lower efficiencies and limited operational hours—since electricity is produced only when sunlight is available—result in PV systems generating substantially less electricity compared to equivalent capacities of other generation technologies.
The future of photovoltaic (PV) systems improvement is centered on two key areas: advancements in PV cell construction and enhancements in cell efficiency Ongoing research is focused on developing new materials and manufacturing processes that aim to reduce resource consumption and lower costs, as current production learning curves remain around 20% The market is currently seeing the second generation of PV cells, while the anticipated third generation is expected to achieve efficiencies nearing 20% and offer longer technical lifespans.
Solar thermal (Solar trough)
Solar thermal electricity generation involves the capture of heat from solar radiation and conversion into electricity Currently four main systems of solar thermal electricity generation can be distinguished:
• Parabolic trough systems dam/pump storage
The first three solar energy systems utilize window systems to concentrate solar radiation, achieving high temperatures for conventional steam cycle operations In contrast, a solar updraft tower harnesses heated air from solar radiation to drive a turbine for electricity generation This study focuses on parabolic trough systems, which consist of solar collector arrays that concentrate sunlight onto a heat transfer fluid, circulating it through pipes along the collectors The heat from this fluid generates steam, which is then converted into electricity via a steam turbine The initial parabolic trough power plants, with a capacity of 354 MWe, were established in southern California between 1984 and 1989, and these systems can also co-fire with natural gas during periods without solar radiation to ensure base load electricity generation.
With over 20 years of operational experience, parabolic trough technology is recognized as a mature and reliable solution in the renewable energy sector A promising advancement currently undergoing pilot testing is the implementation of direct steam generation (DSG), which eliminates the need for toxic heat transfer fluids and significantly reduces infrastructure requirements This innovation is expected to enable scaling to larger capacity units, while enhancements in the steam cycle align with advancements seen in fossil-fueled condensing power plants.
Fuel Cells
A fuel cell operates on the principle of a controlled electrochemical reaction between hydrogen and oxygen, producing water and generating electric energy in the process This fundamental concept was first articulated by William Grove in the 19th century.
The traditional method of converting the chemical energy of fuels into electricity relies on heat engines, which operate through indirect energy conversion Initially, heat is generated and subsequently transformed into mechanical energy, which is then converted into electrical energy by a generator The maximum efficiency of this process is determined by the Carnot factor, which is influenced by the inlet and outlet temperatures.
Fuel cells generate direct electricity and heat through an electrochemical process, distinguishing them from traditional power generation methods that are constrained by the Carnot efficiency However, it is important to note that the operation of fuel cells still adheres to the principles outlined in the second law of thermodynamics.
Fuel cells are typically arranged in series to produce the required power output, and the combination of multiple cells along with essential components such as separators, cooling plates, manifolds, and supporting structures forms a fuel cell stack When multiple stacks are combined, they create a fuel cell module Various fuel cell technologies and systems cater to a wide range of applications, from small-scale to large-scale uses This paper focuses on fuel cell systems specifically designed for combined heat and power (CHP) applications, as their ability to generate heat as a by-product makes them ideal for such uses.
Numerous demonstration plants and field tests have been conducted for stationary applications of fuel cells, as noted by Adamson (2005) Currently, various types of fuel cells are available, primarily differentiated by their electrode materials and operating temperatures The key fuel cell types for stationary applications are highlighted in research by FZJ (2007).
- MCFC – Molten Carbonate Fuel Cells
- SOFC – Solid Oxide Fuel Cells
- PEMFC – Polymer Electrolyte (or Proton Exchange Membrane) Fuel cells
- PAFC – Phosphoric Acid Fuel Cells
This chapter focuses on two types of fuel cells: Solid Oxide Fuel Cells (SOFC) and Molten Carbonate Fuel Cells (MCFC) SOFCs operate at temperatures ranging from 650 to 1000°C, making them suitable for various Combined Heat and Power (CHP) applications Characterized by their solid oxide electrolyte, SOFCs achieve an efficiency of approximately 44%, which can be significantly enhanced when paired with a downstream micro gas turbine In contrast, MCFCs function at temperatures above 600°C and offer high electrical and thermal efficiencies, along with the ability to utilize carbon-containing synthesis gases This study specifically examines the application of MCFCs using biogas and natural gas as fuel sources.
The molten carbonate fuel cell (MCFC) operates at relatively high temperatures, eliminating the need for expensive catalysts and allowing for the avoidance of costly ceramics compared to solid oxide fuel cells (SOFC), which have a 30% higher investment cost While the capital costs for MCFCs are substantial due to the use of advanced materials, they offer reliable part-load efficiency and flexible power output through their modular design, making them a viable option in cogeneration plants.
This report provides an overview of the current trends and findings related to the private costs of electricity and heat generation, offering a snapshot of the existing situation.
The findings presented in chapters 5.1 (2007), 5.2 (2020), and 5.3 (2030) are categorized into two main sections The first section highlights the impact of varying discount rates (5% and 10%) while maintaining a constant availability factor It illustrates how the availability factor, measured in Full Load Hours, influences production costs by comparing the generation costs of different technologies across various plant factors for the years 2007, 2020, and 2030 The second section delves into the results pertaining to each energy carrier and specific time frame.
Private Costs 2007
Fossil and Nuclear Power 2007
Capital and fuel costs are the primary components of electricity pricing, with nuclear PWR and lignite condensing power plants exhibiting the lowest specific private costs per MWhel Although nuclear power has higher capital costs, it remains more expensive than lignite plants In contrast, gas power plants benefit from lower investment costs but face significant challenges due to fuel costs, which account for over 80% of total electricity production expenses This reliance on gas prices, which are volatile and tend to trend upward, impacts the competitiveness of gas technology Gas power plants can effectively manage base and peak load demands at reasonable production costs, while oil power plants struggle to remain competitive due to high fuel prices.
In 2007, fossil and nuclear technologies revealed that lignite condensing plants offer the lowest production costs at both 5% and 10% discount rates The impact of the availability factor highlights the importance of deploying nuclear, coal, and lignite plants as base load plants Ultimately, nuclear and lignite plants demonstrate the lowest generating costs at a 5% discount rate, while coal and lignite condensing plants maintain the lowest costs at a 10% discount rate.
Table 5 Fossil/Nuclear private costs with a Discount rate of 5 and 10%, 7500 h/a
Figure 1 Fossil/Nuclear private costs with a Discount rate of 5 and 10%, 7500 h/a
Table 6 Fossil/Nuclear effect of availability by 5% discount rate (2007)
Figure 2 Fossil/Nuclear effect of availability (Full loading hours) by 5% discount rate
Table 7 Fossil/Nuclear effect of availability by 10% discount rate (2007)
Combined Heat and Power 2007
Combined Heat and Power (CHP) technology offers significant potential for the heat and electricity markets, with optimal availability ranging from 3500 to 6000 full load hours, influenced by factors such as weather and plant size Currently, coal and gas CHP plants are the most competitive options, while those utilizing biomass incur costs two to three times higher The total production costs of electricity generation in CHP systems are highly site-specific and depend on the value of the co-product, heat Additionally, ordinary CHP systems demonstrate resilience against rising discount rates, with maximum production costs for fossil energy carriers without heat credits ranging from 44 to 63 €/MWhel at a 5% discount rate.
€/MWhel with heat credits For biomass the cost ranges between 103 and 118 €/MWhel without heat credits (incl heat credits: 12-25 €/MWhel).
Table 8 CHP private costs at back pressure mode with a discount rate of 5 and 10%,
Figure 3 CHP private costs at back pressure mode with a discount rate of 5 and 10%,
Table 9 CHP effect of availability at back pressure mode by 5% discount rate, with heat credit (2007)
Figure 4 CHP effect of availability (Full loading hours) at back pressure mode by
5% discount rate, with heat credit (2007) Table 10 CHP effect of availability at back pressure mode by 10% discount rate, with heat credit (2007)
Renewable Sources 2007
The framework for calculating private costs for renewable energy plants has been tailored to their unique characteristics, with most technologies, except hydro power, having a maximum lifespan of 30 years Unlike nuclear, coal, and gas plants, which average 7,500 full loading hours annually, wind and solar technologies experience significantly lower hours The hydro power category includes various run-of-river plants, hydro dams, and pump storage, with production costs ranging from 68 to 110 €/MWhel at a 5% discount rate, and 123 to 205 €/MWhel at 10% Wind power plants show marginal production cost differences, with offshore turbines having higher investment costs but similar overall costs due to better wind conditions, averaging about 55 €/MWhel at a 5% discount rate In contrast, solar PV electricity production costs remain uncompetitive compared to other renewable sources and fossil or nuclear energy The impact of availability on production costs at 5% and 10% discount rates is illustrated in the accompanying tables.
Table 11 Private costs of electricity generation technologies by renewable sources with a discount rate of 5 and 10% (2007)
Figure 5 Private costs of electricity generation technologies by renewable sources with a discount rate of 5 and 10% (2007)
Table 12 Renewable effect of availability (Full loading hours) by 5% discount rate
Table 13 Renewables effect of availability (Full loading hours) by 10% discount rate (2007)
Private Costs 2020
Fossil and Nuclear Power 2020
In 2020, lignite and nuclear energy maintained a dominant position in the energy sector, driven by decreasing costs associated with fossil and nuclear fuel technologies This decline in costs can be attributed to two key factors: enhanced efficiency and reduced investment expenses Specifically, at a 5% discount rate, the electricity production costs for lignite-based power plants fell by approximately 5 €/MWhel from 2007 to 2020, while nuclear technology costs also experienced a notable decrease.
The production costs for oil power plants have surged by over 40% due to rising oil prices, while the costs for Integrated Gasification Combined Cycle (IGCC) gas plants remain stable, attributed to improved efficiency (increasing from 57.5% to 62%) and reduced overnight capital costs By 2020, the market sees the introduction of natural gas and coal Carbon Capture and Storage (CCS) technologies, with costs set at 35 €/MWhel for lignite, 43 €/MWhel for coal, and 60 €/MWhel for natural gas, based on a 5% discount rate.
Electricity production costs for nuclear and lignite power plants remain relatively stable at under 40 €/MWhel, primarily due to lower investment costs associated with nuclear energy However, the implementation of carbon capture and storage (CCS) technology significantly raises production costs by over 20%.
Table 14 Fossil/Nuclear private costs with a discount rate of 5 and 10%, 7500 h/a
Figure 6 Fossil/Nuclear private costs with a discount rate of 5 and 10%, 7500 h/a
(2020) Table 15 Fossil/Nuclear effect of availability by 5% discount rate, without costs for
Figure 7 Fossil/Nuclear effect of availability by 5% discount rate, without costs for CO 2 transport and storage (2020) Table 16 Fossil/Nuclear effect of availability by 10% discount rate,without costs for
Combined Heat and Power 2020
The production costs of mature combined heat and power (CHP) technologies, such as coal condensing and natural gas combined cycle gas turbine (CCGT), remain similar to those in 2007, with costs approximately 20% lower than fossil-fuel based carbon capture and storage (CCS) CHP systems At a 5% discount rate, common fossil CHP costs range from 10 to 64 €/MWhel, with coal CCS condensing CHP at 31 €/MWhel and gas-fired CCS CHP at 64 €/MWhel Unlike in 2007, fuel cells have become a more cost-effective CHP technology due to advancements in various fuel cell plants However, biomass-fired cogeneration plants are currently uncompetitive, with over two-thirds of their production costs attributed to high fuel prices.
The costs associated with CO2 transport and storage for plants utilizing CO2 sequestration vary significantly, ranging from 1 to 5 €/MWhel for gas combined cycle power generation (CGP) and from 2 to 10 €/MWhel for coal combined heat and power (CHP) systems.
Figure 9 and the enclosed Table 18 and 19 describe the effect of availability of generating costs of CHP`s.
Table 17 CHP private costs at back pressure mode with a discount rate of 5 and 10%,
Figure 8 CHP private costs at back pressure mode with a discount rate of 5 and
10%, 6000 h/a (2020) Table 18 CHP effect of availability at back pressure mode by 5% discount rate, with heat credit but without costs for CO 2 transport and storage (2020)
Figure 9 CHP effect of availability (Full loading hours) at back pressure mode by
5% discount rate (2020, with heat credit but without costs for CO 2 transport and storage)
Table 19 CHP effect of availability at back pressure mode by 10% discount rate, with heat credit but without costs for CO 2 transport and storage (2020)
Renewable Sources 2020
In 2020, the production costs of most renewable energy sources remained comparable to those in 2007, with the notable exception of solar technologies such as photovoltaic (PV) and solar thermal Notably, at a 5% discount rate, the cost of PV technology has halved, highlighting a significant reduction in investment costs This decline is crucial for the advancement of solar energy compared to other electricity generation technologies.
PV remains the most expensive electricity generating technology with more than 200 €/MWhel at a 5% discount rate.
Table 20 Private costs of renewable electricity generation technologies with a discount rate of 5 and 10% (2020)
Figure 10 Private costs of renewable electricity generation with a discount rate of
5 and 10 % (2020)Table 21 Renewables effect of availability by 5% discount rate (2020)
Table 22 Renewables effect of availability by 10% discount rate (2020)
Private Costs 2030
Fossil and Nuclear Power 2030
The lowest private electricity generation costs for fossil-fired and nuclear technologies are under 28 €/MWhel, consistent with trends observed in 2007 and 2020 Low fuel costs significantly influence the minimal private expenses for lignite and nuclear power plants However, the coal power sector is experiencing significant shifts towards CO2 sequestration, resulting in increased private costs ranging from 2 to 13 €/MWhel At a 5% discount rate, costs for most CO2-sequestering plants fall between 35 and 60 €/MWhel, with additional CO2 transport and storage costs estimated at 3 €/t CO2 Within the fossil and nuclear framework from 2007 to 2030, oil-fired power plants emerge as the most expensive electricity generation technology.
Table 23 Fossil/Nuclear private Costs with a Discount rate of 5 and 10%, 7500 h/a
Figure 11 Fossil/Nuclear private costs with a discount rate of 5 and 10 %, 7500 h/a
(2030) Table 24 Fossil/Nuclear effect of availability by 5% discount rate but without costs for
In 2030, the impact of availability on full loading hours is analyzed under a 5% discount rate, excluding costs for CO2 transport and storage Additionally, the effects of fossil and nuclear energy availability are examined using a 10% discount rate, also without considering CO2 transport and storage costs.
Combined Heat and Electricity 2030
In 2030 the production costs of CHP´s are nearly equivalent to the figures in 2020 because the increased electrical efficiency will be adjusted by increasing fuel costs The costs of
CO2 transport and storage are with 3 €/t CO2 (min) and 15 €/t CO2 (max) considered and contribute to additional costs from 1 to 5 €/MWhel and for coal from 2 to 10 €/MWhel (see Table
In comparison to 2020, back pressure combined heat and power (CHP) systems have shown an increase in electrical efficiency, with gas CHP rising from 46% to 46.5% and coal CHP from 37% to 38% However, this improvement in electrical efficiency has resulted in a decrease in thermal efficiency, leading to lower heat credits overall.
Considering the effect of availability of CHP`s, the gas CCGT CHP with CO2 sequestration has relative high generating costs, as presented in Figure 13.
Table 26 CHP private costs at back pressure mode with a discount rate of 5 and 10%,
Figure 13 CHP private costs at back pressure mode with a discount rate of 5 and
10%, 6000 h/a (2030) Table 27 CHP effect of availability at back pressure mode by 5% discount rate, with heat credit but without costs for CO 2 transport and storage (2030)
Figure 14 Effect of availability at back pressure mode, (Full loading hours) by 5% discount rate (2030, with Heat credit)
Table 28 CHP effect of availability at back pressure mode, by 10% discount rate, with heat credit (2030)
Renewable Sources 2030
By 2030, the private costs for renewable technologies are projected to show less price reduction compared to the period from 2007 to 2020 Wind energy production costs are expected to range between 51 to 53 €/MWhel (including backup), down from approximately 59 €/MWhel in 2020, based on a 5% discount rate Additionally, the installation site remains a critical factor for solar power costs, with rooftop solar systems being more expensive than open space systems.
230 €/MWhel at 5% discount rate and more than 330 €/MWhel at 10% discount rate
Table 29 Private costs of electricity generation technologies by renewable sources with a discount rate of 5 and 10% (2030)
Figure 15 Renewables private costs with a discount rate of 5 and 10 % (2030)Table 30 Renewables effect of availability by 5% discount rate (2030)
Table 31 Renewables effect of availability by 10% discount rate (2030)
The analysis of various electricity generation technologies reveals that conventional power plants are expected to have economic advantages over renewable energy sources, considering factors such as capital, fuel, operating, maintenance, and CO2 transport and storage costs The input data for capital and operational costs, efficiencies, technical availability, and lifetimes are derived from estimations by power plant manufacturers, operators, and scientists A comparison of the average levelized lifetime costs of electricity for power plants was conducted for the years 2007, 2020, and 2030 Additionally, two different costs for CO2 transport and storage were evaluated (3 €/t CO2 and 15 €/t CO2), alongside detailed sensitivity analyses for all technologies.
The lowest private costs of generating electricity from the traditional main generating technologies (nuclear, hard coal, lignite and hydro) are within the range of about 25 to 45
€/MWhel The private costs for renewable energy sources stays on a high level up to 2030 At a discount rate of 5% the costs for generating electricity with renewable energies are about 52
Wind turbines generate electricity at costs ranging from €/MWhel, while photovoltaic (PV) systems range between 230 - 330 €/MWhel Currently, Combined Heat and Power (CHP) plants are competitive, with private costs between 40 to 60 €/MWhel In contrast, the generation costs for Carbon Capture and Storage (CCS) power plants, still in development, are expected to be significantly higher than conventional fossil power plants due to increased capital and operational expenses and lower efficiency By 2030, the levelized lifetime costs of CCS plants may be about 25% higher, but as CO2 prices rise, CCS technology could become more competitive with traditional power generation methods.
The choice of the discount rates of 5 and 10% reflects an assessment of power generation investment strategies
This paper highlights that no single traditional electricity technology can be deemed the most cost-effective in every scenario The selection of the appropriate generating technology is contingent upon the unique circumstances surrounding each project.
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