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

Shafiee, M, Alghamdi, A, Sansom, C, Hart, P, Encinas-Oropesa, A (2020) A Through-Life Cost Analysis Model to Support Investment Decision-Making in Concentrated Solar Power Projects. Energies, 13 (7). pp. 1-20. ISSN 1996-1073. (doi:10.3390/en13071553) (KAR id:80627)

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https://doi.org/10.3390/en13071553

Abstract

This research paper aims to propose a through-life cost analysis model for estimating the profitability of renewable concentrated solar power (CSP) technologies. The financial outputs of the model include net present value (NPV) and benefit-cost ratio (BCR) of the project, internal rate of return (IRR) and discounted payback period (DPBP) of the investment, and levelized cost of energy (LCoE) from the CSP technology. The meteorological data for a specific location in the city of Tucson in Arizona is collected from a network of automated weather stations, and the NREL System Advisor Model (SAM) is applied to simulate hourly energy output of the CSP plant. An Excel spreadsheet tool is designed to calculate, in a bottom-up approach, the financial metrics required for approval of CSP projects. The model is tested on a 50MW parabolic trough CSP plant and the results show an annual energy production of 456,351,232 kWh, NPV of over $64 million and LCoE of 0.16 $/kWh. Finally, a sensitivity analysis is performed to identify the factors which have the most significant effect on the economic performance of CSP technologies. The proposed model can provide valuable guidance to support the strategic planning and investment decision-making in CSP projects.

Item Type: Article
DOI/Identification number: 10.3390/en13071553
Uncontrolled keywords: concentrated solar power (CSP); through-life cost analysis; system advisor model (SAM); net present value (NPV); benefit-cost ratio (BCR); internal rate of return (IRR); discounted payback period (DPBP); levelized cost of energy (LCoE)
Subjects: T Technology > TA Engineering (General). Civil engineering (General) > TA165 Engineering instruments, meters etc. Industrial instrumentation
T Technology > TA Engineering (General). Civil engineering (General) > TA168 Systems engineering
T Technology > TA Engineering (General). Civil engineering (General) > TA401 Materials engineering and construction
T Technology > TJ Mechanical engineering and machinery
Divisions: Faculties > Sciences > School of Engineering and Digital Arts
Depositing User: Mahmood Shafiee
Date Deposited: 27 Mar 2020 08:23 UTC
Last Modified: 31 Mar 2020 12:00 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/80627 (The current URI for this page, for reference purposes)
Shafiee, M: https://orcid.org/0000-0002-6122-5719
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