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Technology capital cost projections, 2010-2050

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In evaluating the future U.S. electricity system, Rocky Mountain Institute created capital cost projections for fossil and renewable generation technologies through 2050. Many newer technologies, such as concentrated solar power, solar photovoltaics, and battery storage, are projected to have rapidly declining capital costs in the next 40 years.

RMI’s capital cost projections are based on extensive data from industry and government sources on historical, present, and projected capital costs, operating costs, and performance characteristics. Using historical cost data, RMI applied orthodox learning-curve models to project capital costs into the future, calibrating these projections against others within the electricity industry and cross-checking against the latest observed market prices.

Two technologies RMI unlikely to have any learning curve improvements in the next 40 years are nuclear and coal IGCC/CCS (integrated gasification combined cycle with carbon capture and sequestration).

An IGCC plant heats coal in the presence of oxygen and steam to generate a synthetic gas (syngas). This syngas then fuels a combined-cycle gas turbine. The main benefits of using coal in an IGCC plant over the direct combustion of coal are: 1) improved power plant thermal efficiency, and 2) reduced heavy metal, particulates, and sulfur dioxide emissions. Furthermore, by adding carbon capture and sequestration (CCS) technology to an IGCC plant, CO2 emissions can also be reduced or eliminated. However, with only two existing IGCC plants in the U.S., the capital costs are uncertain. Including CCS technology, IGCC capital costs are estimated to be $2,400–7,000/kW.

Nuclear power plants have a history of major cost overruns and construction delays. Of plants in the U.S. whose construction was started prior to 1977 (all ordered since 1973 were cancelled), the average actual construction costs were two to three times higher than the average projected real cost, amounting to almost $5,000/kW. Only 12 nuclear plants have been built in the U.S. since, with the last of these coming online in 1993. Two large European projects underway—Finland's Olkiluoto-3 and France's Flamanville-3—are both at least three years behind schedule and dramatically over budget.

Sources

RMI analysis using learning curve theory, as detailed in:

McDonald, A., Schrattenholzer, L., 2001. "Learning rates for energy technologies." Energy Policy 29 (4): 255–261.

Black & Veatch Corporation. 2008. Renewable Energy Transmission Initiative Final Report. Walnut Creek, California: Black & Veatch Corporation.

Lazard. 2009.Levelized Cost of Energy Analysis 3.0. February.

George E. Sancoucy, P.E., LLC. 2009. Levelized Cost of Electricity Associated with Out-of-City Renewable Energy Resources Considered Supply Candidates for the City and County of San Francisco CCA Program. September 2.

Biomass:

Electric Power Research Institute. 2009. Program on Technology Innovation: Integrated Generation Technology Options. Palo Alto, California.

Kaua’i Island Utility Cooperative. 2005. Renewable Energy Technology Assessments. Hawaii.

The World Bank Group. 2006. Technical and Economic Assessment of Off-Grid, Mini-Grid, and Grid Electrification Technologies. September.

U.S. EIA. 2010. Annual Energy Outlook 2010: With Projections to 2035. Washington, D.C.: U.S. Department of Energy, April.

MIT. 2006. The Future of Geothermal Energy: Impact of EGS on the United States in the 21st Century. link

Geothermal:

Heidinger, Philipp. 2010. “Integral modeling and financial impact of the geothermal situtaiton and power plant at Soultz-sous-Forets.” Comptes Rendus Geoscience 342 (7-8) (July): 626-635.

Ocean:

Bedard,R. et al. 2007. NAOES. Palo Alto, California: EPRI, March.

Carbon Trust. 2006. Results of the Marine Energy Challenge: Cost competitiveness and growth of wave and tidal stream energy. Future Marine Energy.

Solar:

Bony, Lionel, Newman, Sam, and Doig, Stephen. 2010. Achieving Low-Cost Solar PV: Industry Workshop Recommendations for Near-Term Balance of System Cost Reductions. RMI. link

Navigant Consulting. 2008. Florida Renewable Energy Potential Assessment: Draft Report - Techical Potentials and Economic and Performance Characteristics. November 5.

San Diego Regional Renewable Energy Study Group. 2005. Potential for Renewable Energy in the San Diego Region: Appendix E: Solar Thermal - Concentrated Solar Power. National Renewable Energy Laboratory, August.

Song, J. et al. 2009. The True Cost of Solar Power: Race to $1/W. Photon Consulting, LLC.

Stoddard, L., et al. 2006. Economic, Energy, and Environmental Benefits of Concentrating Solar Power in California. NREL, April.

U.S. EIA. 2009. Solar Photovoltaic Cell/Module Manufacturing Activities 2008. Washington, D.C.: U.S. DOE.



Wiser, R. et al. 2009. Tracking the Sun II: The Installed Cost of Photovoltaics in the U.S from 1998-2008. Berkeley, CA: Lawrence Berkeley National Laboratory, October.

Wind:

Cambridge Energy Research Associates. 2009. “Power Business Strategy: Navigating Economic and Political Cycles.” Presented to IHS CERA Global Power Forum Summit, October 20, Williamsburg, VA.

Anon. Joint Stipulation & Settlement Agreement. Oklahoma: Crossroads Wind Farm.

Electric Power Research Institute. 2009. Program on Technology Innovation: Integrated Generation Technology Options. Palo Alto, California.

EnerNex Corporation. 2011. Eastern Wind Integration and Transmission Study. Knoxville, Tennessee: NREL, February.

Georgia IT, and Southern Company. 2007. Southern Winds: Summary Project Report 2007. GA.

Navigant Consulting. 2008. Florida Renewable Energy Potential Assessment. Draft Report - Techical Potentials and Economic and Performance Characteristics. November 5.

Sarah Feinberg. 2010. “Wind Turbine Price Index.” Bloomberg New Energy Finance.

IEA WInd Energy: Annual Report 2009. International Energy Agency, July.

Wiser, Ryan, and Mark Bolinger. 2011. 2010 Wind Technologies Market Report. Lawrence Berkeley National Laboratory, June. link

 
 
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