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Annual Technology Baseline 2017

National Renewable Energy Laboratory


Recommended Citation:
NREL (National Renewable Energy Laboratory). 2017. 2017 Annual Technology Baseline. Golden, CO: National Renewable Energy Laboratory. http://atb.nrel.gov/.


Please consult Guidelines for Using ATB Data:
https://atb.nrel.gov/electricity/user-guidance.html

Concentrating Solar Power

Representative Technology

Concentrating solar power (CSP) technology is assumed to be molten-salt power towers. Thermal energy storage (TES) is accomplished by storing hot molten-salt in a two-tank system, which includes a hot-salt tank and a cold-salt tank. Stored hot salt can be dispatched to the power block as needed, regardless of solar conditions. In the ATB, CSP plants with 10 hours of TES are illustrated.

The first large molten-salt power tower plant (Crescent Dunes 110 MWe with 10 hours of storage) was commissioned in 2015 with a reported installed CAPEX of $8.96/WAC (Danko 2015; Taylor 2016 ).

Resource Potential

Solar resource is prevalent throughout the United States, but the Southwest is particularly suited to CSP plants. The direct normal irradiance (DNI) resource across the Southwest is some of the best in the world and ranges from 2,000 to 2,800 kWh/m2/year. The solar resource for the Southwest was found in Ballaben, Poliafico, and Hashem (2015). The raw resource technical potential of seven western states (Arizona, California, Colorado, Nevada, New Mexico, Utah, and Texas) exceeds 11,000 GW (almost tenfold current total U.S. electricity generation capacity), assuming an annual average resource > 6.0 kWh/m2/day and after accounting for exclusions such as land slope (>1%), urban areas, water features, and parks, preserves, and wilderness areas (Mehos, Kabel, and Smithers 2009).

map: mean U.S. solar resource available to CSP systems
Map of mean solar resource available to CSP systems in the United States

Renewable energy technical potential, as defined by Lopez et al. (2012), represents the achievable energy generation of a particular technology given system performance, topographic limitations, and environmental and land-use constraints. The primary benefit of assessing technical potential is that it establishes an upper-boundary estimate of development potential. It is important to understand that there are multiple types of potential—resource, technical, economic, and market (Lopez et al. 2012; NREL, “Renewable Energy Technical Potential”).

The Solar Programmatic Environmental Impact Statement identified 17 solar energy zones for priority development of utility-scale solar facilities in six western states. These zones total 285,000 acres and are estimated to accommodate up to 24 GW of solar potential. The program also allows development, subject to a more rigorous review, on an additional 19 million acres of public land. Development is prohibited on approximately 79 million acres.

According to NREL's Concentrating Solar Power Projects website, 15 of the 17 currently operational CSP plants in the United States use parabolic trough technology. And, two power tower facilities—Ivanpah (392 MW) and Crescent Dunes (110 MW), are operational. One small 5-MW linear Fresnel plant is non-operational in California (NREL's Concentrating Solar Power Projects). This 5-MW solar-enhanced oil recovery site was a development site.

Base Year and Future Year Projections Overview

For the ATB, three representative sites were chosen based on resource class to demonstrate the range of cost and performance across the United States:

  • CAPEX are determined using manufacturing cost models and are benchmarked with industry data. The CSP performance and cost are based on the molten-salt power tower technology with dry-cooling to reduce water consumption.
  • O&M cost is benchmarked by industry input.
  • Capacity factor varies with inclusion of thermal energy storage and solar irradiance. The listed projects assume power towers with 10 hours of thermal energy storage.
    • Fair Resource (e.g., Abilene Regional Airport, Texas 5.59 kWh/m2/day based on the site TMY3 file)
    • Good Resource (e.g., Las Vegas, Nevada 7.1 kWh/m2/day based on the site TMY3 file)
    • Excellent Resource (e.g., Daggett, California 7.46 kWh/m2/day based on the site TMY3 file)
  • Representative CSP plant size is net 100 megawatts electrical (MWe).

The Base Year estimates are made for 2015 (via an updated index of the ATB 2016) and for 2018, which has utilized a recent assessment of the industry and has expected project completion in 2018.

Future year projections are informed by published literature and technology pathway assessments to inform CAPEX and O&M cost reductions. Three different projections were developed for scenario modeling as bounding levels:

  • High cost: no change in CAPEX, O&M, or capacity factor from 2018 to 2050; consistent across all renewable energy technologies in the ATB
  • Mid cost: CAPEX reduced by 25% by 2030 and based on median of literature projections of future CAPEX to 2050; O&M technology pathway analysis.
  • Low cost: technology pathway analysis demonstrating feasibility of achieving SunShot targets by 2030 through reductions to CAPEX and O&M.

CAPital EXpenditures (CAPEX): Historical Trends, Current Estimates, and Future Projections

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year. These expenditures include the generation plant, the balance of system (e.g., site preparation, installation, and electrical infrastructure), and financial costs (e.g., development costs, onsite electrical equipment, and interest during construction) and are detailed in CAPEX Definition. In the ATB, CAPEX reflects typical plants and does not include differences in regional costs associated with labor or materials. The range of CAPEX demonstrates variation with resource in the contiguous United States.

The following figure shows the Base Year estimate and future year projections for CAPEX costs. Three cost reduction scenarios are represented: High, Mid, and Low. The estimate for a given year represents CAPEX of a new plant that reaches commercial operation in that year.

chart: CAPEX historical trends, current estimates, and future projections for solar CSP in the 2017 ATB

Base Year Estimates

CAPEX is unchanged for resource class because the same plant is assumed to be built in each location. The capacity factor will change with resource.

TES increases plant CAPEX but also increases capacity factor and annual efficiency. TES lowers LCOE for power towers.

The CAPEX estimate (2015) is approximately $8,130/kW. It is for a representative power tower with 10 hours of storage (and a solar multiple of 2.4). Based on recent assessment of the industry and expected project completion in 2018, the CAPEX estimate is $7,037/kW.

Future Year Projections

Three cost projections are developed for CSP technologies:

  • High cost: no change in CAPEX, O&M, or capacity factor from 2018 to 2050; consistent across all renewable energy technologies in the ATB
  • Mid cost: CAPEX reduced by 25% by 2030 and based on median of literature projections of future CAPEX to 2050; O&M technology pathway analysis
  • Low cost: technology pathway analysis demonstrating feasibility of achieving SunShot targets by 2030 through reductions to CAPEX and O&M.

Detailed description of the methodology for developing Future Year Projections is found in Projections Methodology.

Technology innovations that could impact future CAPEX costs are summarized in LCOE Projections.

CAPEX Definition

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.

The ATB represents the year in which a plant starts commercial operation. Accordingly, for plants whose construction duration exceeds one year, CAPEX costs will represent technology costs that are lagging current-year estimates by at least one year. For CSP plants, the construction period is typically three years.

For the ATB—and based on EIA (2016a), Turchi (2010), and Turchi and Heath (2013)—the CSP generation plant envelope is defined to include:

  • CSP generation plant
    • Solar collectors
    • Solar receiver
    • Piping and heat-transfer fluid system
    • Power block (heat exchangers, power turbine, generator, cooling system)
    • Thermal energy storage system
    • Installation
  • Balance of system, including installation, land acquisition, electrical infrastructure and project indirect costs
    • Land acquisition, site preparation, installation of underground utilities, access roads, fencing, and buildings for operations and maintenance
    • Electrical infrastructure, such as transformers, switchgear, and electrical system connecting modules to each other and to control the center; the generator voltage is 13.8 kV, the step-up transformer is 13.8/230kV, and the transmission tie line is 230 kV.
    • Project indirect costs, including costs related to engineering, distributable labor and materials, construction management start up and commissioning, and contractor overhead costs, fees, and profit.
  • Financial Costs
    • Owner's costs, such as development costs, preliminary feasibility and engineering studies, environmental studies and permitting, legal fees, insurance costs, and property taxes during construction
    • Onsite electrical equipment (e.g., switchyard), a nominal-distance spur line (<1 mile), and necessary upgrades at a transmission substation; distance-based spur line cost (GCC) not included in the ATB
    • Interest during construction estimated based on three-year duration accumulated 80%/10%/10% at half-year intervals and an 8% nominal interest rate (ConFinFactor).

CAPEX can be determined for a plant in a specific geographic location as follows:

CAPEX = ConFinFactor*(OCC*CapRegMult+GCC).
(See the Financial Definitions tab in the ATB data spreadsheet.)

Regional cost variations and geographically specific grid connection costs are not included in the ATB (CapRegMult = 1; GCC = 0). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor).

In the ATB, CAPEX represents a typical solar-CSP plant with 10 hours of thermal storage and does not vary with resource. Regional cost effects associated with labor rates, material costs, and other regional effects as defined by EIA (2016a) expand the range of CAPEX. Unique land-based spur line costs based on distance and transmission line costs expand the range of CAPEX even further. The following figure illustrates the ATB representative plant relative to the range of CAPEX including regional costs across the contiguous United States. The ATB representative plants are associated with a regional multiplier of 1.0.

chart: CAPEX definition for soalr CSP in the 2017 ATB

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

CAPEX in the ATB does not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., but the ReEDS model does include 134 regional multipliers (EIA 2016a).

The ReEDS model determines the land-based spur line (GCC) uniquely for each potential CSP plant based on distance and transmission line cost.

Operation and Maintenance (O&M) Costs

Operations and maintenance (O&M) costs represent the annual expenditures required to operate and maintain a solar CSP plant over its technical lifetime of 30 years (the distinction between economic life and technical life is described here), including:

  • Operating and administrative labor, insurance, legal and administrative fees, and other fixed costs
  • Utilities (water, power, natural gas) and mirror washing
  • Scheduled and unscheduled maintenance, including replacement parts for solar field and power block components over the technical lifetime of the plant

The following figure shows the Base Year estimate and future year projections for fixed O&M (FOM) costs. Three cost reduction scenarios are represented. The estimate for a given year represents annual average FOM costs expected over the technical lifetime of a new plant that reaches commercial operation in that year.

chart: base year estimate and future year projections for fixed O&M costs for solar CSPin the 2017 ATB

Base Year Estimates

FOM is assumed to be $66/kW-yr. Variable O&M is approximately $4/MWh until 2018 and $3.50/MWh after (Kurup and Turchi 2015).

Future Year Projections

Future FOM is assumed to decline to the SunShot target of $50/kW-yr by 2030 in the Mid cost case and $40/kW-yr by 2030 in the Low cost case (DOE 2012).

A detailed description of the methodology for developing future year projections is found in Projections Methodology.

Technology innovations that could impact future O&M costs are summarized in LCOE Projections.

Capacity Factor: Expected Annual Average Energy Production Over Lifetime

The capacity factor represents the expected annual average energy production divided by the annual energy production, assuming the plant operates at rated capacity for every hour of the year. It is intended to represent a long-term average over the technical lifetime of the plant (the distinction between economic life and technical life is described here). It does not represent interannual variation in energy production. Future year estimates represent the estimated annual average capacity factor over the technical lifetime of a new plant installed in a given year.

Capacity factors are influenced by power block technology, storage technology and capacity, the solar resource, expected downtime, and energy losses. The solar multiple is a design choice that influences the capacity factor.

The following figure shows a range of capacity factors based on variation in the resource for CSP plants in the contiguous United States. The range of the Base Year estimates illustrates the effect of locating a CSP plant at a site with fair, good, or excellent solar resource. The future projections for the High, Mid, and Low cost scenarios are unchanged from the Base Year. Technology improvements are focused on CAPEX and O&M cost elements.

chart: capacity factor (annual average energy production over plant lifetime) for geothermal in the 2017 ATB

Base Year Estimates

For illustration in the ATB, a range of capacity factors is associated with three resource locations in the contiguous United States, as represented in the ReEDS model for three classes of insolation:

  • Fair resource: Abilene, Texas: 5.59 kWh/m2/day based on the site TMY3 file equals 42% capacity factor
  • Good resource: Las Vegas, Nevada: 7.1 kWh/m2/day based on the site TMY3 file equals 56% capacity factor
  • Excellent resource: Daggett, California: 7.46 kWh/m2/day based on the site TMY3 file equals 59% capacity factor.

Future Year Projections

The CSP technologies are assumed to be power towers, but with different power cycles and operating conditions as time passes:

  • 2015: a molten-salt (sodium nitrate/potassium nitrate, aka, solar salt) power tower with direct two-tank TES combined with a steam-Rankine power cycle running at 574°C and 41.2% gross efficiency
  • 2018: similar design with identified near-term reductions in heliostat and power system costs
  • 2030 Mid: longer-term reductions (e.g., in the heliostats and power system).
  • 2030 Low: SunShot targets are met; molten-salt power tower with direct two-tank TES combined with a power cycle running at 700°C and 55% gross efficiency.

Over time, CSP plant output may decline. Capacity factor degradation due to mirror and other component degradation is not accounted for in ATB estimates of capacity factor or LCOE.

The ATB capacity factors are slightly down-rated from SAM 2015 projections.

Estimates of capacity factors for CSP in the ATB represent typical operation. The dispatch characteristics of these systems are valuable to the electric system to manage changes in net electricity demand. Actual capacity factors will be influenced by the degree to which system operators call on CSP plants to manage grid services.

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

CSP plants with TES can be dispatched by grid operators to accommodate diurnal and seasonal load variations and output from variable generation sources (wind and solar PV). Because of this, their annual energy production and the value of that generation are determined by the electric system needs and capacity and ancillary services markets.

Plant Cost and Performance Projections Methodology

When comparing the ATB projections with other projections, note that there are major differences in technology assumptions, radiation conditions, field sizes, storage configurations, and other factors.

chart: ATB cost projections for solar CSP compared with published literaturein the 2017 ATB

The Low ATB projection is based on the SunShot Vision Study (DOE 2012; Mehos et al. 2016 ) and has been vetted with solar industry representatives.

Attempts have been made to clarify the specifics of the other published CSP projections (e.g., number of hours of storage and solar multiple). As yet, this has not been possible in detail for the ATB 2017.

Projections of future utility-scale CSP plant CAPEX and O&M are based on three different projections developed for scenario modeling as bounding levels:

  • High
    • Modeled as molten-salt (sodium nitrate/potassium nitrate, aka, solar salt) power tower with direct two-tank TES combined with a steam-Rankine power cycle running at 574°C and 41.2% gross efficiency in 2015
    • Costs stay the same from the 2018 estimate through 2050, consistent with ATB renewable energy technologies
  • Mid
    • Based on published projections that highlight an overall CSP CAPEX reduction by 25% by 2030 and which represent a potential median compared to other published CSP projections until 2050 (Feldman et al. 2016; IRENA 2016)
    • Gradual reductions in heliostat and power system cost due to greater deployment volume depicted for 2018 based on current state of industry
    • CAPEX and O&M both drop by 25% by 2030
  • Low
    • Significant reductions in heliostat and power system cost due to greater deployment volume and R&D depicted for 2018; modeled as an advanced molten-salt power tower with direct two-tank TES combined with a power cycle running at 700°C and 55% gross efficiency in 2030 (Mehos et al. 2016)
    • Learning rate applied: 9.9% for the solar field and 12% for the turbine based on global projected CSP deployment are applied after 2030
    • SunShot CAPEX and O&M targets are met in 2030, including new, high-efficiency power cycles and low-cost heliostats.

Levelized Cost of Energy (LCOE) Projections

Levelized cost of energy (LCOE) is a simple metric that combines the primary technology cost and performance parameters, CAPEX, O&M, and capacity factor. It is included in the ATB for illustrative purposes. The focus of the ATB is to define the primary cost and performance parameters for use in electric sector modeling or other analysis where more sophisticated comparisons among technologies are made. LCOE captures the energy component of electric system planning and operation, but the electric system also requires capacity and flexibility services to operate reliably. Electricity generation technologies have different capabilities to provide such services. For example, wind and PV are primarily energy service providers, while the other electricity generation technologies provide capacity and flexibility services in addition to energy. These capacity and flexibility services are difficult to value and depend strongly on the system in which a new generation plant is introduced. These services are represented in electric sector models such as the ReEDS model and corresponding analysis results such as the Standard Scenarios.

The following three figures illustrate the combined impact of CAPEX, O&M, and capacity factor projections across the range of resources present in the contiguous United States. The Current Market Conditions LCOE demonstrates the range of LCOE based on macroeconomic conditions similar to the present. The Historical Market Conditions LCOE presents the range of LCOE based on macroeconomic conditions consistent with prior ATB editions and Standard Scenarios model results. The Normalized LCOE (all LCOE estimates are normalized with the lowest Base Year LCOE value) emphasizes the effect of resource quality and the relative differences in the three future pathways independent of project finance assumptions. The ATB representative plant characteristics that best align with recently installed or anticipated near-term CSP plants are associated with Tower – Excellent Resource. Data for all the resource categories can be found in the ATB data spreadsheet.

Current Market Conditions
Historical Market Conditions
Normalized
The ATB representative plant characteristics that best align with recently installed or anticipated near-term CSP plants are associated with Tower – Excellent Resource.

The methodology for representing the CAPEX, O&M, and capacity factor assumptions behind each pathway is discussed in Projections Methodology. The three pathways are generally defined as:

  • 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.

To estimate LCOE, assumptions about the cost of capital to finance electricity generation projects are required. For comparison in the ATB, two project finance structures are represented.

  • Current Market Conditions: The values of the production tax credit (PTC) and investment tax credit (ITC) are ramping down by 2020, at which time wind and solar projects may be financed with debt fractions similar to other technologies. This scenario reflects debt interest (4.4% nominal, 1.9% real) and return on equity rates (9.5% nominal, 6.8% real) to represent 2017 market conditions (AEO 2017) and a debt fraction of 60% for all electricity generation technologies. An economic life, or period over which the initial capital investment is recovered, of 20 years is assumed for all technologies. These assumptions are one of the project finance options in the ATB spreadsheet.
  • Long-Term Historical Market Conditions: Historically, debt interest and return on equity were represented with higher values. This scenario reflects debt interest (8% nominal, 5.4% real) and return on equity rates (13% nominal, 10.2% real) implemented in the ReEDS model and reflected in prior versions of the ATB and Standard Scenarios model results. A debt fraction of 60% for all electricity generation technologies is assumed. An economic life, or period over which the initial capital investment is recovered, of 20 years is assumed for all technologies. These assumptions are one of the project finance options in the ATB spreadsheet.

These parameters are held constant for estimates representing the Base Year through 2050. No incentives such as the PTC or ITC are included. The equations and variables used to estimate LCOE are defined on the equations and variables page. For illustration of the impact of changing financial structures such as WACC and economic life, see Project Finance Impact on LCOE. For LCOE estimates for High, Mid, and Low scenarios for all technologies, see 2017 ATB Cost and Performance Summary.

In general, the degree of adoption of a range of technology innovations distinguishes the High, Mid and Low cost cases. These projections represent the following trends to reduce CAPEX and FOM, and increase O&M.

  • Power tower improvements
    • Better and longer-lasting selective surface coatings improve receiver efficiency and reduce O&M costs
    • New salts allow for higher operating temperatures and lower-cost TES
    • Development of the power cycle running at 700°C and 55% gross efficiency improves cycle efficiency, reduces powerblock cost, and reduces O&M costs
    • Lower-cost heliostats developed due to more efficient designs and automated and high-volume manufacturing
  • General and "soft" costs improvements
    • Expansion of world market leads to greater and more efficient supply chains; reduction of supply chain margins (e.g., profit and overhead charged by suppliers, manufacturer, distributors, and retailers)
    • Expansion of access to a range of innovative financing approaches and business models
    • Development of best practices for permitting interconnection and installation such as subdivision regulations, new construction guidelines, and design requirements.

The LCOE range shown is based on locations with fair (Abilene, Texas), good (Las Vegas, Nevada), and excellent (Daggett, California) resources. The CAPEX is the same at each resource as the same plant is used.

References

Danko, Pete. 2015. 'SolarReserve: Crescent Dunes Solar Tower Will Power Up in March: Without Ivanpah's Woes.' Breaking Energy. February 10, 2015. http://breakingenergy.com/2015/02/10/solarreserve-crescent-dunes-solar-tower-will-power-up-in-march-without-ivanpahs-woes/.
Taylor, Phil. 2016. 'Nev. Plant Solves Quandary of How to Store Sunshine.' E&E News. March 29, 2016. http://www.eenews.net/stories/1060034748.
Lopez, Anthony, Billy Roberts, Donna Heimiller, Nate Blair, and Gian Porro. 2012. U.S. Renewable Energy Technical Potentials: A GIS-Based Analysis. National Renewable Energy Laboratory. NREL/TP-6A20-51946. http://www.nrel.gov/docs/fy12osti/51946.pdf.
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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.
DOE (U.S. Department of Energy). 2012. SunShot Vision Study. DOE/GO-102012-3037. February 2012. https://www1.eere.energy.gov/solar/pdfs/47927.pdf.
Mehos, Mark, Craig Turchi, Jennie Jorgenson, Paul Denholm, Clifford Ho, and Kenneth Armijo. 2016. On the Path to SunShot: Advancing Concentrating Solar Power Technology, Performance, and Dispatchability. Golden, CO: National Renewable Energy Laboratory. NREL/TP-5500-65688. May 2016. http://www.nrel.gov/docs/fy16osti/65688.pdf.
Feldman, David, Robert Margolis, Paul Denholm, and Joseph Stekli. 2016. Exploring the Potential Competitiveness of Utility-Scale Photovoltaics plus Batteries with Concentrating Solar Power, 2015–2030. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A20-66592. August 2016. http://www.nrel.gov/docs/fy16osti/66592.pdf.
IRENA (International Renewable Energy Agency). 2016. The Power to Change: Solar and Wind Cost Reduction Potential to 2025. June 2016. Paris: International Renewable Energy Agency. http://www.irena.org/DocumentDownloads/Publications/IRENA_Power_to_Change_2016.pdf.
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.