Estimating the Impact of Residual Value for Electricity Generation Plants on Capital Recovery, Levelized Cost of Energy, and Cost to Consumers

Measuring The Impact of Risk On LCOE(Levelized Cost of Energy) In Geothermal Technology

10.21203/rs.3.rs-869061/v1 ◽

2021 ◽

Author(s):

Antony Kipkirui Langat ◽

Yongbeum Yoon ◽

Soojin Park

Keyword(s):

Weighted Average ◽

Theoretical Background ◽

Certainty Equivalent ◽

Equivalent Model ◽

Economic Decisions ◽

Levelized Cost ◽

Cost Of Energy ◽

High Level ◽

Equivalent Method ◽

The Impact

Abstract Geothermal technology has a high level of uncertainty and, thus, requires thorough risk analysis for economic decisions. The Levelized Cost of Energy (LCOE) is a basic economic analysis widely used in determining an investment or energy mix. Many reputable institutions and government agencies provide LCOE, to which they apply different levels of discount rates to reflect project risk. It is a proxy for the Weighted Average Cost of Capital (WACC). Theoretically, determining whether using a higher discount rate for a risky project is appropriate in calculating LCOE has not been scrutinized. The purpose of this paper is to propose a certainty equivalent method of LCOE as an alternative way of reflecting risk. We present a theoretical background and formula based on the utility theory, improving the probabilistic LCOE estimation methodology of previous studies. We also perform scenario analysis to show how the LCOE with certainty equivalent model moves over the change of risk in major input factors, whereas traditional LCOE does not. Additionally, we suggest that the traditional LCOE should be used prudently, recognizing it can distort the result when an individual project has a different level of risk from the industry average.

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Mapping and Analysis of Initial cost Against Levelized Cost of Energy for Residential PV Rooftoop in Indonesia

E3S Web of Conferences ◽

10.1051/e3sconf/20186701024 ◽

2018 ◽

Vol 67 ◽

pp. 01024 ◽

Cited By ~ 2

Author(s):

Riadhi Fairuz ◽

Eko Adhi Setiawan ◽

Ikhsan Hernanda

Keyword(s):

Net Present Value ◽

Economic Feasibility ◽

Solar Irradiation ◽

Solar Pv ◽

Pv Systems ◽

Levelized Cost ◽

Initial Cost ◽

Cost Of Energy ◽

The Difference ◽

The Impact

Future electricity tariffs are expected to increase. To overcome this condition, arise the idea how the residential can generate its own electricity by exploiting the potential of solar energy. However, there are some constraints in its implementation due to the difference of the initial cost and sales from solar PV systems in various region of Indonesia. The purpose of this study is to determine the impact of initial cost on the levelized cost of energy from the system. This study uses the calculation of Levelized Cost of Energy (LCoE) and economic feasibility analysis through the calculation of net present value with net metering scheme. Manado is the most optimal city to implement this system. The initial cost will affect to the LCoE, the high initial cost can be covered by the amount of cash flow generated by the system which has huge solar irradiation potentials.

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Measuring the impact of risk on LCOE (levelized cost of energy) in geothermal technology

Geothermal Energy ◽

10.1186/s40517-021-00209-9 ◽

2021 ◽

Vol 9 (1) ◽

Author(s):

Soojin Park ◽

Antony Langat ◽

Kyuhwan Lee ◽

Yongbeum Yoon

Keyword(s):

Discount Rate ◽

Weighted Average ◽

Theoretical Background ◽

Certainty Equivalent ◽

Equivalent Model ◽

Project Risk ◽

Levelized Cost ◽

Cost Of Energy ◽

The Impact ◽

Level Of Risk

AbstractGeothermal technology has a high level of uncertainty and, thus, requires thorough risk analysis for economic decisions. The levelized cost of energy (LCOE) is a basic economic analysis widely used in determining an investment or energy mix. Many reputable institutions and government agencies provide LCOE, to which they apply different levels of discount rates to reflect project risk. To this end, the weighted average cost of capital (WACC) is frequently used as a proxy for project risk-adjusted discount rate. However, whether using a higher discount rate for a riskier project is appropriate in calculating LCOE has not been scrutinized. The purpose of this paper is to propose a certainty equivalent method of LCOE as an alternative way for considering risk. We present a theoretical background and formula based on the utility theory, improving the probabilistic LCOE estimation methodology of previous studies. We also perform scenario analysis to show how the certainty equivalent model changes LCOE reflecting different level of risk of the individual variables, which traditional LCOE does not. Additionally, we suggest that the traditional LCOE should be used prudently, recognizing it can distort the result when an individual project has a different level of risk from the industry average.

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Photovoltaics: Reviewing the European Feed-in-Tariffs and Changing PV Efficiencies and Costs

The Scientific World JOURNAL ◽

10.1155/2014/404913 ◽

2014 ◽

Vol 2014 ◽

pp. 1-10 ◽

Cited By ~ 5

Author(s):

H. L. Zhang ◽

T. Van Gerven ◽

J. Baeyens ◽

J. Degrève

Keyword(s):

Electricity Generation ◽

Photovoltaic System ◽

Process Efficiency ◽

Solar Irradiation ◽

Energy Potential ◽

Levelized Cost ◽

Cost Of Energy ◽

Sustainable Electricity ◽

Near Future

Feed-in-Tariff (FiT) mechanisms have been important in boosting renewable energy, by providing a long-term guaranteed subsidy of the kWh-price, thus mitigating investment risks and enhancing the contribution of sustainable electricity. By ongoing PV development, the contribution of solar power increases exponentially. Within this significant potential, it is important for investors, operators, and scientists alike to provide answers to different questions related to subsidies, PV efficiencies and costs. The present paper therefore (i) briefly reviews the mechanisms, advantages, and evolution of FiT; (ii) describes the developments of PV, (iii) applies a comprehensive literature-based model for the solar irradiation to predict the PV solar energy potential in some target European countries, whilst comparing output predictions with the monthly measured electricity generation of a 57 m² photovoltaic system (Belgium); and finally (iv) predicts the levelized cost of energy (LCOE) in terms of investment and efficiency, providing LCOE values between 0.149 and 0.313 €/kWh, as function of the overall process efficiency and cost. The findings clearly demonstrate the potential of PV energy in Europe, where FiT can be considerably reduced or even be eliminated in the near future.

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GRID PARITY OF PV – AN ACCESSIBLE OPPORTUNITY TO ACHIEVE BULGARIA’S RENEWABLE TARGETS BY 2030

International Conference on Technics Technologies and Education ◽

10.15547/ictte.2019.04.033 ◽

2019 ◽

pp. 239-244

Author(s):

Georgi Todorov ◽

Krasimira Keremidchieva

Keyword(s):

Technological Progress ◽

Time Frame ◽

Specific Production ◽

Final Consumption ◽

Grid Parity ◽

Levelized Cost ◽

Cost Of Energy ◽

Main Candidate ◽

Common Vision ◽

The Eu

On the go is the development and adaptation of an individual target for Bulgaria, in order to increase the share of RES energy, according to the EU common vision for leadership in the implementation of renewables to 32% in the gross final consumption by 2030. The technological progress, the easy applicability and feasibility of the projects, as well as the geographic and climatic specifics of Bulgaria, makes photovoltaic Bulgaria's main candidate for leading technology in this process. With net specific production of 1323kWh/annual per installed kWp, price levels of PV technology of €1360kWp and Levelized cost of energy (LCOE) below €0.12kWh for 20 years time frame, households in Bulgaria are at a stage where photovoltaic projects should be developed as an alternative to the grid supply

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Uncertainty and global sensitivity analysis of levelized cost of energy in wind power generation

Energy Conversion and Management ◽

10.1016/j.enconman.2020.113781 ◽

2021 ◽

Vol 229 ◽

pp. 113781

Author(s):

Mi Dong ◽

Ya Li ◽

Dongran Song ◽

Jian Yang ◽

Mei Su ◽

...

Keyword(s):

Power Generation ◽

Sensitivity Analysis ◽

Wind Power ◽

Global Sensitivity Analysis ◽

Wind Power Generation ◽

Global Sensitivity ◽

Levelized Cost ◽

Cost Of Energy

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Thermal performance comparison of different sun tracking configurations

The European Physical Journal Applied Physics ◽

10.1051/epjap/2019190048 ◽

2019 ◽

Vol 88 (2) ◽

pp. 20902

Author(s):

O. Achkari ◽

A. El Fadar

Keyword(s):

Thermal Performance ◽

Electricity Generation ◽

Arid Regions ◽

Performance Comparison ◽

Water Desalination ◽

Parabolic Trough ◽

Parabolic Trough Collector ◽

The Impact ◽

The Mathematical Model ◽

Good Agreement

Parabolic trough collector (PTC) is one of the most widespread solar concentration technologies and represents the biggest share of the CSP market; it is currently used in various applications, such as electricity generation, heat production for industrial processes, water desalination in arid regions and industrial cooling. The current paper provides a synopsis of the commonly used sun trackers and investigates the impact of various sun tracking modes on thermal performance of a parabolic trough collector. Two sun-tracking configurations, full automatic and semi-automatic, and a stationary one have numerically been investigated. The simulation results have shown that, under the system conditions (design, operating and weather), the PTC's performance depends strongly on the kind of sun tracking technique and on how this technique is exploited. Furthermore, the current study has proven that there are some optimal semi-automatic configurations that are more efficient than one-axis sun tracking systems. The comparison of the mathematical model used in this paper with the thermal profile of some experimental data available in the literature has shown a good agreement with a remarkably low relative error (2.93%).

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