Cost-Benefit Analysis for the Concentrated Solar Power in China

Abstract

In 2016, the first batch of concentrated solar power (CSP) demonstration projects of China was formally approved. Due to the important impact of the cost-benefit on the investment decisions and policy-making, this paper adopted the static payback period (SP), net present value (NPV), net present value rate (NPVR), and internal rate of return (IRR) to analyze and discuss the costbenefit of CSP demonstration plants. The results showed the following.(1) The SP of CSP systems is relatively longer, due to high initial investment; but the cost-benefit of CSP demonstration plants as a whole is better, because of good expected incomes. (2) Vast majority of CSP projects could gain excess returns, on the basis of meeting the profitability required by the benchmark yield of 10%. (3) The cost-benefit of solar tower CSP technology (IRR of 12.33%) is better than that of parabolic trough CSP technology (IRR of 11.72%) and linear Fresnel CSP technology (IRR of 11.43%). (4) The annual electricity production and initial costs have significant impacts on the cost-benefit of CSP systems; the effects of operation and maintenance costs and loan interest rate on the cost-benefit of CSP systems are relatively smaller but cannot be ignored.

An Enhanced Techno-Economic Analysis of Lcoe: Public Incentives vs Private Investment

“…Thus, except for the annual net electricity production, the other three factors (total investments, equity percentage and O&M costs) contribute to increase the LCOE by a high percentage. The results of this study are in line with the most recent empirical evidence worldwide, which holds that investment costs, O&M costs, electricity production and discount rate are the most significant variables that affect the LCOE of CSP projects (Hernández-Moro & Martínez-Duart, 2013;Zhao et al, 2017;Yang et al, 2018). Additionally, in our case, equity percentage also appears as one of the fundamental variables for minimizing the LCOE.…”

“…Under the design of any power generation cost calculation model, the estimation of LCOE is indispensable (Hernández-Moro & Martínez-Duart, 2013). Notice that there are some number of investigations in discussing the cost-benefit of distinctive energy system under a LCOE perspective, it is clearly seen however that those are lacking financial indexes, such as net present value (NPV), payback period, or internal rate of return (IRR) (Yang et al, 2018). Thus, in the above studies, system cost and O&M cost are usually considered because they make up the most significant part of the total cost of a project.…”

“…Case of study: the Spanish CSP plants CSP technology relies on the aggregation of the solar energy to collect mainly thermal energy which, in turn, serves to produce steam and with it operate a conventional turbine that produces electricity. Despite the fact that nowadays photovoltaic energy has a wider geographic area of application, CSP is able to effectively solve the issues on the instability of solar energy by installing a thermal energy storage (TES) system in the CSP plants (Yang et al, 2018). Besides, some advantages of this CSP technology are: 1) it is manageable or, in other words, it is capable of adapting energy production to demand; 2) it can be combined with fossil fuels, allowing the reduction of emission of polluting gases to the atmosphere in conventional plants, while it can extend its useful life and, 3) it promotes socio-economic development through the creation of employment and industrial fabric that favor technological development, innovation and entrepreneurship.…”

High-resolution assessment of solar energy resources over the Arabian Peninsula

“…The development of large-scale commercial Photovoltaic (PV) and Concentrating Solar Power (CSP) establishments over different regions of the world and their economic benefits have been reported in many previous studies [e.g., [6][7][8][9][10][11][12][13][14]. Yang et al [15] reported that the commercial CSP plant operations are now only available in the United States of America and Spain, producing about 4079 MW, is more than 80% of the global capacity in 2016. They also emphasized the plans of South Africa and Morocco to establish massive CSP plants by 2022 to respectively produce about 3.3 GW and 2 GW, and the plan of Saudi Arabia to install a 25 GW mega CSP by 2040 [15].…”

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

“…Zhao et al [11] proposed a mathematical model to calculate the LCoE from CSP projects using a lifetime cost structure analysis. Yang et al [12] evaluated the static payback period, NPV, and IRR to analyze and discuss the costs and benefits of CSP plants in China.…”