2017: ATB Approach and Methodology

The ATB represents the cost and performance of typical electricity generation plants in the United States. The ATB represents renewable electricity generation plants either by (1) reflecting the entire geographic range of resource with a few points averaging similar characteristics or (2) providing examples to demonstrate a range associated with resource potential.

Foundational to this averaging approach, NREL uses high-resolution, location-specific resource data to represent site-specific capital investment and estimated annual energy production for all potential renewable energy plants in the United States.

For each renewable technology, the ATB includes:

  • Base Year estimates for a base year of 2015, the year that sufficient historical data are available
  • Three future projections (High, Mid and Low cost) through 2050 to reflect a range of perspectives based on published literature:
    • High = Base Year (or near-term estimates of projects under construction) equivalent through 2050 maintains current relative technology cost differences.
    • Mid = technology advances through continued industry growth, public and private R&D investments, and market conditions relative to current levels that may be characterized as "likely," or "not surprising"
    • Low = Technology advances that may occur with breakthroughs, increased public and private R&D investments, and/or other market conditions that lead to cost and performance levels that may be characterized as the "limit of surprise,", but not necessarily the absolute low bound.
  • Descriptions of the resource, cost and performance estimation methodology, and data sources as well as a comparison with published data.

For fossil and nuclear generation plants, the ATB:

  • Relies on EIA representation of current year plant cost estimates and for plant cost projections through 2050 (AEO 2017)
  • Relies on EIA scenarios for fuel price projections through 2050 (AEO 2017).

For biopower plants, the ATB:

  • Relies on EIA representation current year plant cost estimates
  • Relies on EIA representation of future plant cost estimates through 2050 (AEO 2017)
  • Represents the average biopower feedstock price based on the Billion Ton Update study (DOE 2011) through 2030
  • Holds the biopower feedstock price at 2030 levels through 2050.

Note: Capacity expansion models (including the ReEDS model used by NREL) calculate the optimized capacity factor for each conventionally fueled plant. The default capacity factors listed in the ATB data spreadsheet are meant to be representative—not to reflect exactly what values were used in the modeling.

Base Year (2015) Costs in the ATB

Base year (2015) costs in the ATB are from the following sources:

Technology Source
Land-based wind power plants Bottom-up modeling (Moné et al. 2017), compared to wind market data reports, methodology updated from Wind Vision (DOE 2015)
Offshore wind power plants Bottom-up modeling (Beiter et al. 2016), compared to wind market data reports
Utility, residential, and commercial PV plants Market data reports (2015) supplemented with bottom-up cost modeling from Fu et al. (2016) for 2016 estimate
Concentrating solar power plants Bottom-up cost modeling from Kurup and Turchi (2015), supplemented with industry input regarding projects under construction for operation in 2018
Geothermal plants Bottom-up cost modeling using GETEM
Hydropower plants Hydropower Vision (DOE 2016), bottom-up cost modeling from Hydropower Baseline Cost Modeling (O'Connor et al. 2015)
Fossil, nuclear, and biopower plants Annual Energy Outlook (EIA 2017) reported costs

Future Cost Projections for Renewables

The ATB relies heavily on future cost projections developed for previous studies. This framework provides comparisons of cost projections with published literature to illustrate potential differences in perspective. In general, ATB projections are within the bounds of perspectives represented in the literature.

In the ATB, projections are developed independently for each technology using different methods, but the initial starting point for each is compared with market data (where it is available) to provide a consistent baseline methodology. Common plant envelope definitions are based on EIA (2016a) and contribute to the consistent baseline.

Developing cost and performance projections for electricity generation technologies is very difficult. Methods that rely on engineering-based models are likely to provide insight into potential technology innovations that yield a lower cost of energy. Methods that rely on learning curves in combination with high-level macroeconomic assumptions are likely to provide insight into potential rates of adoption of technology innovations. Methods that include expert elicitation may result in associated probability levels for different future cost outcomes. All methods have strengths and weaknesses in serving the varied interests that seek these types of projections. Approaches that combine methods are likely to provide the greatest transparency and widest application for technology innovation purposes as well as macroeconomic purposes. However, high levels of uncertainty are associated with each method. Providing a range of projections (e.g., High, Mid and Low) produces scenario modeling results that represent a range of possible outcomes.

The following table lists the method behind the ATB cost projections for each renewable energy technology.

Technology Methods Source ATB Mid and Low Notes
Wind (land and offshore) Expert elicitation Wiser et al. 2016 Mid: 50% probability scenario

Low: 10% probability scenario
Scenarios reflect relative difference between Mid and Low associated with probability; include LCOE component projections (e.g., CAPEX and capacity factor)
Solar PV (utility and distributed) Literature survey (CAPEX), single pathway (O&M) Internal NREL analysis (Feldman) Mid: Based on median of literature sample

Low: Based on lower bound of literature sample
Long term: forecasts published in last three years

Short term: forecasts published in last six months
CSP (10 hours thermal storage) Single pathway, learning, literature survey Internal NREL analysis (Kurup) and On the Path to SunShot Mid: Based on median of literature sample

Low: SunShot target achieved in 2035
Low projection informed by bottom-up analysis combined with learning rates; Mid projection based on literature sample
Hydropower (NPD, NSD) Multiple pathway, expert input, learning Hydropower Vision (DOE 2016) Mid: Hydropower Vision (DOE 2016) Reference scenario

Low: Hydropower Vision (DOE 2016) Advanced Technology scenario
Projections informed by industry expertise, identifiable potential future technology and process advancements, EIA minimum learning
Geothermal Minimum learning EIA NEMS Mid: -5% CAPEX by 2035

Low: -10% CAPEX by 2035
Geothermal Vision Study will result in detailed analysis for future ATB editions

The methods identified in the table above are defined as follows:

  • Expert Elicitation: formal, structured information gathering associated with probability level for multiple scenarios
  • Literature Survey: assessment of statistics (e.g., median) associated with sample of published literature
  • Pathway Analysis: use of engineering models, often with expert input about specific assumptions, to explore single or multiple technology advance pathways associated with future outcomes
  • Expert Input: information gathering to define and support assumptions for technology pathway analysis
  • Learning: application of published learning rates and assumptions of future global or national capacity additions.

References

EIA (U.S. Energy Information Administration). 2017. Annual Energy Outlook 2017 with Projections to 2050. Washington, D.C.: U.S. Department of Energy. January 5, 2017. http://www.eia.gov/outlooks/aeo/pdf/0383(2017).pdf.
DOE (U.S. Department of Energy). 2011. U.S. Billion-Ton Update: Biomass Supply for a Bioenergy and Bioproducts Industry. Perlack, R.D., and B.J. Stokes, eds. Oak Ridge, TN: Oak Ridge National Laboratory. ORNL/TM-2011/224. August 2011. https://www.osti.gov/scitech/biblio/1023318.
Moné, Christopher, Maureen Hand, Mark Bolinger, Joseph Rand, Donna Heimiller, and Jonathan Ho. 2017. 2015 Cost of Wind Energy Review. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-66861. http://www.nrel.gov/docs/fy17osti/66861.pdf.
DOE (U.S. Department of Energy). 2016. Hydropower Vision: A New Chapter for America's Renewable Electricity Source. Washington, D.C.: U.S. Department of Energy. DOE/GO-102016-4869. July 2016. https://energy.gov/sites/prod/files/2016/10/f33/Hydropower-Vision-10262016_0.pdf.
Beiter, Philipp, Walter Musial, Aaron Smith, Levi Kilcher, Rick Damiani, Michael Maness, Senu Sirnivas, Tyler Stehly, Vahan Gevorgian, Meghan Mooney, and George Scott. 2016. A Spatial-Economic Cost-Reduction Pathway Analysis for U.S. Offshore Wind Energy Development from 2015-2030. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-66579. September 2016. http://www.nrel.gov/docs/fy16osti/66579.pdf.
Fu, Ran, Donald Chung, Travis Lowder, David Feldman, Kristen Ardani, and Robert Margolis. 2016. U.S. Photovoltaic (PV) Prices and Cost Breakdowns: Q1 2016 Benchmarks for Residential, Commercial, and Utility-Scale Systems. Golden, CO: National Renewable Energy Laboratory. NREL/PR-6A20-67142. September 2016. http://www.nrel.gov/docs/fy16osti/67142.pdf.
Kurup, Parthiv, and Craig S. Turchi. 2015. Parabolic Trough Collector Cost Update for the System Advisor Model (SAM). Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-65228. November 2015. http://www.nrel.gov/docs/fy16osti/65228.pdf.
O'Connor, Patrick W., Scott T. DeNeale, Dol Raj Chalise, Emma Centurion, and Abigail Maloof. 2015. Hydropower Baseline Cost Modeling, Version 2. Oak Ridge, TN: Oak Ridge National Laboratory. ORNL/TM-2015/471. September 2015. http://info.ornl.gov/sites/publications/files/Pub58666.pdf.
EIA (U.S. Energy Information Administration). 2016a. Capital Cost Estimates for Utility Scale Electricity Generating Plants. Washington, D.C.: U.S. Department of Energy. November 2016. https://www.eia.gov/analysis/studies/powerplants/capitalcost/pdf/capcost_assumption.pdf.