Please keep this discussion focussed by following the guidelines at the bottom of this article. In particular, all comments comparing energy options like nuclear and renewables are off-topic.
What is meant by “internalized costs”?
Internalized costs are the costs which can be accurately accounted for in our current systems. In energy production, these costs typically consist of capital costs, financing costs, operation and maintenance costs, and exploration costs. Some energy options incur these costs in various stages such as extraction, transportation and refinement. Profits and taxes are excluded wherever possible in order to isolate the pure cost of production.
Internalized costs of solar thermal energy
Like most renewable energy technologies, the most important factors influencing the internalized costs of solar thermal are capital costs, capacity factor and discount rate. Relevant numbers can be found in two recent reports from the IEA and BNEF.
Only plants with thermal storage will be considered in this analysis since plants without thermal storage will not be able to complete with solar PV.
Capital costs of solar thermal plants with storage currently range between 6000 and 11000 $/kW according to the BNEF report, while the IEA puts the upper limit at $9000/kW. These are high numbers, but are compensated for to some degree by the higher capacity factors delivered by the addition of a thermal storage system. The BNEF report lists capacity factors for solar thermal with storage in the range of 28-64%.
Discount rates applied to solar thermal plants should also be fairly high considering the risks involved in this relatively immature technology. The 8% discount rate employed for offshore wind in a previous article should be reasonable.
The LCOE of solar thermal energy with storage is given below as a function of the capacity factor for different capital costs (at 8% financing costs) and financing costs (at $7000/kW capital costs). Other assumptions include O&M costs of $70/kW/yr and a plant lifetime of 30 years. The Excel file from which these figures were compiled can be downloaded here.
The cost of using utility scale solar power for heat is given below.
However, using solar thermal generated electricity directly for heat would not be a very thermodynamically intelligent thing to do. It would be much better to simply use the solar heat directly wherever possible. Solar hot water heaters offer one such example. Costs associated with small scale solar hot water heaters are shown below for different capital costs ($ per gallon of capacity) and solar fractions (fraction of total yearly heating needs covered by solar heat). Other assumptions include a 20 year lifetime, 6% discount rate, O&M costs of 1.5% of the upfront cost per year, and average utilization to heat the entire water capacity by 50 degrees Celcius every day.
As outlined in the previous article on the internalized costs of nuclear, transport costs using solar thermal energy will be estimated based on optimistic projected technologically mature synfuel production technology. Since solar thermal plants with storage will be able to function both in a baseload-dominated system (where synfuel production would take place in low demand periods at night and over weekends) and in a variable-dominated system (where synfuel production would take place during times of wind/solar peaks), a 40% capacity factor will be used for the synfuel plant.
In order to assist in finding the consensus view on the internalized costs of solar thermal energy, please follow these simple commenting guidelines:
Three types of comments are welcome, each introduced by a keyword:
- DATA: Please give your opinion on any of the numbers presented in the article. Of particular interest is the average global capital cost of solar thermal plants with thermal storage ($/kW), average global capacity factors and average global financing costs (%). Each DATA comment will be weighted by the number of “likes” when the data is ultimately processed.
- REBUTTAL: If you strongly disagree with an existing DATA comment, please write a short rebuttal. The “likes” received by a REBUTTAL comment will subtract from the “likes” of the DATA comment. A REBUTTAL comment can once again be rebutted to reduce its weighting.
- CORRECTION: If you see a serious error in the numbers presented in the above analysis, please correct me so that I can correct the article.
- Make sure your comment gives only one piece of information (use multiple comments for multiple pieces of information).
- Keep things short.
- Please try to be as objective as at all possible. For this process to work, we all need to be in the mindset of dialectic instead of debate.
- Externalities, potential technological breakthroughs and other energy options are off-topic.
Many comments are welcome. More data = greater accuracy.