Projected Costs of Generating Electricity - 2010 Edition, Table ... - IEA

Table of contents
Foreword ..................................................................................................................................................................................... 5
Acknowledgements ............................................................................................................................................................. 6
List of participating members of the Expert Group ........................................................................................ 7
Table of contents ................................................................................................................................................................... 11
List of tables ............................................................................................................................................................................. 13
List of figures ........................................................................................................................................................................... 14
Executive summary ............................................................................................................................................................ 17
Part I Methodology and Data on Levelised Costs for Generating Electricity
Chapter 1 Introduction and context ..................................................................................................................... 29
Chapter 2 Methodology, conventions and key assumptions................................................................. 33
2.1 The notion of levelised costs of electricity (LCOE)................................................. 33
2.2 The EGC spreadsheet model for calculating LCOE ................................................ 37
2.3 Methodological conventions and key assumptions for calculating
LCOE with the EGC spreadsheet model ....................................................................... 41
Conclusions ............................................................................................................................................. 45
Chapter 3 Technology overview .............................................................................................................................. 47
3.1 Presentation of different power technologies ......................................................... 47
3.2 Technology-by-technology data on electricity generating costs .................. 59
Chapter 4
Country-by-country data on electricity generating costs for
different technologies ............................................................................................................................ 65
4.1 Country-by-country data on electricity generating costs (bar graphs) .... 65
4.2 Country-by-country data on electricity generating costs
(numerical tables) ..................................................................................................................... 89
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Part II Sensitivity analyses and boundary issues
Chapter 5 Median case ................................................................................................................................................. 101
Chapter 6 Sensitivity analyses ................................................................................................................................ 105
6.1 Multi-dimensional sensitivity analysis ....................................................................... 106
6.2 Summary results of the sensitivity analyses for different parameters ... 112
6.3 Qualitative discussion of different variables affecting the LCOE ................ 123
Chapter 7 System integration aspects of variable renewable power generation .................... 141
7.1 Introduction ................................................................................................................................. 141
7.2 Variability........................................................................................................................................ 142
7.3 Flexibility......................................................................................................................................... 145
7.4 Costing variable renewable integration........................................................................ 146
7.5 Power system adequacy......................................................................................................... 149
Chapter 8 Financing issues ....................................................................................................................................... 151
8.1 Social resource cost and private investment cost: the difference
is uncertainty .............................................................................................................................. 151
8.2 The role of corporate taxes and the coherence of fiscal and
energy policy ................................................................................................................................ 155
8.3 The impact of the financial and economic crisis ................................................... 158
8.4 Options for improving investment conditions in the power sector ........... 160
Chapter 9 Levelised costs and the working of actual power markets ............................................ 163
9.1 Use and limitations of LCOE ............................................................................................... 164
9.2 Power market functioning and electricity pricing in
competitive markets ............................................................................................................... 168
9.3 Qualitative assessment of major risks associated with generation
technologies ................................................................................................................................. 172
9.4 Policy considerations .............................................................................................................. 174
Chapter 10 Carbon capture and storage .............................................................................................................. 177
10.1 Introduction ............................................................................................................................... 177
10.2 Role of CCS in CO 2 mitigation ......................................................................................... 178
10.3 CO 2 capture and storage in power generation ...................................................... 181
10.4 Demonstration and deployment of CCS ................................................................... 187
Chapter 11 Synthesis report on other studies of the levelised cost of electricity....................... 189
11.1 Introduction ............................................................................................................................... 189
11.2 Common lessons .................................................................................................................... 196
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ANNEXES
Annex 1
Issues concerning data from non-OECD countries and assumptions for
the electricity generating cost calculations .............................................................................. 201
Brazil ............................................................................................................................................................ 202
China ............................................................................................................................................................ 204
Russia .......................................................................................................................................................... 208
South Africa ............................................................................................................................................. 210
Annex 2 List of abbreviations ............................................................................................................................... 213
List of Tables
Table 1.1 Summary overview of responses ............................................................................................... 30
Table 2.1 National currency units (NCU) per USD (2008 average) ................................................ 38
Table 3.1a Overnight costs of electricity generating technologies (USD/kWe) –
Mainstream technologies ................................................................................................................ 48
Table 3.1b Overnight costs of electricity generating technologies (USD/kWe) –
Other technologies .............................................................................................................................. 49
Table 3.2 Nuclear power plants ........................................................................................................................ 50
Table 3.3a Coal-fired power generation technologies ............................................................................ 53
Table 3.3b Coal-fired power generation technologies with CC(S) ................................................... 54
Table 3.4 Gas-fired power generation technologies ............................................................................. 55
Table 3.5 Renewable energy sources .............................................................................................................. 57
Table 3.6 Combined heat and power (CHP) plants ................................................................................ 58
Table 3.7a Nuclear power plants: Levelised costs of electricity
in US dollars per MWh ...................................................................................................................... 59
Table 3.7b Coal-fired power plants: Levelised costs of electricity
in US dollars per MWh ...................................................................................................................... 60
Table 3.7c Gas-fired power plants: Levelised costs of electricity
in US dollars per MWh ...................................................................................................................... 61
Table 3.7d Renewable power plants: Levelised costs of electricity
in US dollars per MWh ...................................................................................................................... 62
Table 3.7e CHP: Levelised costs of electricity in US dollars per MWh ......................................... 63
Table 3.7f Oil: Levelised costs of electricity in US dollars per MWh ............................................ 63
Table 3.7g Fuel cells: Levelised costs of electricity in US dollars per MWh .............................. 63
Table 4.1a Country-by-country data on electricity generating costs for mainstream
technologies (at 5% discount rate) ............................................................................................. 90
Table 4.1b Country-by-country data on electricity generating costs for mainstream
technologies (at 10% discount rate) .......................................................................................... 92
Table 4.2a Country-by-country data on electricity generating costs for other
technologies (at 5% discount rate) ............................................................................................. 94
Table 4.2b Country-by-country data on electricity generating costs for other
technologies (at 10% discount rate) .......................................................................................... 96
Table 5.1 Overview of the data points for each main generation technology ...................... 102
Table 5.2 Median case specifications summary ..................................................................................... 103
Table 6.1 Median case ............................................................................................................................................. 105
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Table 6.2 Total generation cost structure ................................................................................................... 112
Table 6.3 2009 WEO fossil fuel price assumptions in the Reference Scenario
(2008 USD per unit) ............................................................................................................................. 114
Table 6.4 2009 WEO fossil fuel price assumptions in the 450 Scenario
(2008 USD per unit) ............................................................................................................................. 114
Table 7.1 Penetration of wind energy in electricity production .................................................... 142
Table 9.1 Main risk factors for investors in power generation ...................................................... 166
Table 9.2 Qualitative assessment of generating technology risks ............................................... 172
Table 10.1 Electricity generation mix in 2050 for the BASE scenario and different
variants of the BLUE scenario ....................................................................................................... 180
Table 10.2 Technical and economic characteristics of power plants with
carbon capture ....................................................................................................................................... 186
Table 11.1a LCOE for nuclear, pulverised coal, IGCC, gas and biomass ......................................... 190
Table 11.1b LCOE for nuclear, pulverised coal, IGCC, gas and biomass ......................................... 191
Table 11.2 LCOE for wind, hydro, solar PV and solar thermal ........................................................... 192
Table 11.3 Financial assumptions in different studies ......................................................................... 195
Table A.1 Emission limits for selected airborne pollutants ............................................................. 203
Table A.2 China power plant overnight construction cost ............................................................... 205
Table A.3 Qinhuangdao domestic coal prices ........................................................................................... 205
Table A.4 West-East pipeline gas (2008) ....................................................................................................... 206
List of Figures
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Figure ES.1 Regional ranges of LCOE for nuclear, coal, gas and
onshore wind power plants (at 5% discount rate) ........................................................... 18
Figure ES.2 Regional ranges of LCOE for nuclear, coal, gas and
onshore wind power plants (at 10% discount rate) ......................................................... 19
Figure 4.1a Austria – levelised costs of electricity (at 5% discount rate) ...................................... 66
Figure 4.1b Austria – levelised costs of electricity (at 10% discount rate) ................................... 66
Figure 4.2a Belgium – levelised costs of electricity (at 5% discount rate) .................................... 67
Figure 4.2b Belgium – levelised costs of electricity (at 10% discount rate) ................................. 67
Figure 4.3a Canada – levelised costs of electricity (at 5% discount rate) ..................................... 68
Figure 4.3b Canada – levelised costs of electricity (at 10% discount rate) ................................... 68
Figure 4.4a Czech Republic – levelised costs of electricity (at 5% discount rate) .................... 69
Figure 4.4b Czech Republic – levelised costs of electricity (at 10% discount rate) .................. 69
Figure 4.5a France – levelised costs of electricity (at 5% discount rate) ....................................... 70
Figure 4.5b France – levelised costs of electricity (at 10% discount rate) ..................................... 70
Figure 4.6a Germany – levelised costs of electricity (at 5% discount rate) .................................. 71
Figure 4.6b Germany – levelised costs of electricity (at 10% discount rate) ............................... 71
Figure 4.7a Hungary – levelised costs of electricity (at 5% discount rate) ................................... 72
Figure 4.7b Hungary – levelised costs of electricity (at 10% discount rate) ................................ 72
Figure 4.8a Italy – levelised costs of electricity (at 5% discount rate) ............................................ 73
Figure 4.8b Italy – levelised costs of electricity (at 10% discount rate) .......................................... 73
Figure 4.9a Japan – levelised costs of electricity (at 5% discount rate) .......................................... 74
Figure 4.9b Japan – levelised costs of electricity (at 10% discount rate) ....................................... 74

Figure 4.10a Korea – levelised costs of electricity (at 5% discount rate) ......................................... 75
Figure 4.10b Korea – levelised costs of electricity (at 10% discount rate) ....................................... 75
Figure 4.11a Mexico – levelised costs of electricity (at 5% discount rate) ...................................... 76
Figure 4.11b Mexico – levelised costs of electricity (at 10% discount rate) .................................... 76
Figure 4.12a Netherlands – levelised costs of electricity (at 5% discount rate) .......................... 77
Figure 4.12b Netherlands – levelised costs of electricity (at 10% discount rate) ........................ 77
Figure 4.13a Slovak Republic – levelised costs of electricity (at 5% discount rate) ................... 78
Figure 4.13b Slovak Republic – levelised costs of electricity (at 10% discount rate) ................ 78
Figure 4.14a Sweden – levelised costs of electricity (at 5% discount rate) ..................................... 79
Figure 4.14b Sweden – levelised costs of electricity (at 10% discount rate) .................................. 79
Figure 4.15a Switzerland – levelised costs of electricity (at 5% discount rate) ........................... 80
Figure 4.15b Switzerland – levelised costs of electricity (at 10% discount rate) ......................... 80
Figure 4.16a United States – levelised costs of electricity (at 5% discount rate) ........................ 81
Figure 4.16b United States – levelised costs of electricity (at 10% discount rate) ..................... 81
Figure 4.17a Brazil – levelised costs of electricity (at 5% discount rate) .......................................... 82
Figure 4.17b Brazil – levelised costs of electricity (at 10% discount rate) ....................................... 82
Figure 4.18a China – levelised costs of electricity (at 5% discount rate) ......................................... 83
Figure 4.18b China – levelised costs of electricity (at 10% discount rate) ...................................... 83
Figure 4.19a Russia – levelised costs of electricity (at 5% discount rate) ........................................ 84
Figure 4.19b Russia – levelised costs of electricity (at 10% discount rate) ..................................... 84
Figure 4.20a South Africa – levelised costs of electricity (at 5% discount rate) .......................... 85
Figure 4.20b South Africa – levelised costs of electricity (at 10% discount rate) ........................ 85
Figure 4.21a ESAA levelised costs of electricity (at 5% discount rate) .............................................. 86
Figure 4.21b ESAA levelised costs of electricity (at 10% discount rate) ........................................... 86
Figure 4.22a Eurelectric/VGB levelised costs of electricity (at 5% discount rate) ....................... 87
Figure 4.22b Eurelectric/VGB levelised costs of electricity (at 10% discount rate) .................... 87
Figure 4.23a US EPRI levelised costs of electricity (at 5% discount rate) ......................................... 88
Figure 4.23b US EPRI levelised costs of electricity (at 10% discount rate) ...................................... 88
Figure 6.1 Tornado graph 1 nuclear .................................................................................................................. 106
Figure 6.2 Tornado graph 2 gas ........................................................................................................................... 107
Figure 6.3 Tornado graph 3 coal .......................................................................................................................... 108
Figure 6.4 Tornado graph 4 coal with CC(S) ................................................................................................. 109
Figure 6.5 Tornado graph 5 onshore wind .................................................................................................... 110
Figure 6.6 Tornado graph 6 solar PV ................................................................................................................ 110
Figure 6.7 LCOE as a function of the discount rate ................................................................................. 112
Figure 6.8 The ratio of investment cost to total costs as a function of the discount rate....... 113
Figure 6.9 LCOE as a function of fuel cost variation (at 5 % discount rate) .............................. 115
Figure 6.10 LCOE as a function of fuel cost variation (at 10% discount rate) ............................ 115
Figure 6.11 Share of fuel cost over total LCOE calculated (at 5 % discount rate) .................... 115
Figure 6.12 Share of fuel cost over total LCOE calculated (at 10% discount rate) ................... 115
Figure 6.13 LCOE as a function of carbon cost variation (at 5 % discount rate) ....................... 117
Figure 6.14 LCOE as a function of carbon cost variation (at 10% discount rate) ..................... 117
Figure 6.15 Share of CO 2 cost over total LCOE calculated (at 5% discount rate) ...................... 118
Figure 6.16 Share of CO 2 cost over total LCOE calculated (at 10% discount rate) ................... 118
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Figure 6.17 LCOE as a function of a 30% construction cost increase (at 5%
discount rate) .......................................................................................................................................... 119
Figure 6.18 LCOE as a function of a 30% construction cost increase (at 10%
discount rate) .......................................................................................................................................... 119
Figure 6.19 LCOE as a function of a variation in the construction period (at 5%
discount rate) .......................................................................................................................................... 120
Figure 6.20 LCOE as a function of a variation in the construction period (at 10%
discount rate) .......................................................................................................................................... 120
Figure 6.21 LCOE as a function of a variation in the load factor (at 5% discount rate) ....... 121
Figure 6.22 LCOE as a function of a variation in the load factor (at 10% discount rate) ..... 121
Figure 6.23 LCOE as a function of lifetime variation (at 5% discount rate) ................................ 122
Figure 6.24 LCOE as a function of lifetime variation (at 10% discount rate) .............................. 122
Figure 6.25 Incremental power generation in the OECD area ............................................................ 125
Figure 6.26 Monthly gas prices in key OECD regional gas markets ................................................. 127
Figure 6.27 Steam coal quarterly import costs and monthly spot prices .................................... 128
Figure 6.28 Average prices in the EU for natural uranium delivered under spot and
multiannual contracts, 1980-2008 (in EUR/kgU and USD/lb U 3 O 8 ) ......................... 130
Figure 6.29 Monthly natural uranium spot prices in USD/lb U 3 O 8 ................................................... 131
Figure 6.30 Changes in installed capacity in the OECD area (GW) .................................................. 133
Figure 6.31 Changes in installed capacity in the OECD North America region (GW) ........... 134
Figure 6.32 Changes in installed capacity in the OECD Asia-Pacific region (GW) ................... 134
Figure 6.33 Changes in installed capacity in the OECD Europe region (GW) ............................. 135
Figure 6.34 IHS CERA Power Capital Cost Index (PCCI) ........................................................................... 137
Figure 6.35 Electric Power Generation Producer Price Index ............................................................... 138
Figure 7.1 Smoothing effect of geo-spread on wind power output
in Germany (2-12 February 2005) ................................................................................................ 143
Figure 7.2 Monthly capacity factors for wind and PV, Germany, 2005 ........................................ 144
Figure 7.3 Western Denmark’s electricity trading with Norway and Sweden: wind
power for hydropower ....................................................................................................................... 146
Figure 7.4 Estimates of increase in balancing costs ............................................................................... 147
Figure 8.1 Impact of corporate taxes at 5% discount rate and 50% equity finance ............ 157
Figure 8.2 Impact of corporate taxes at 10% basic discount rate and
50% equity finance .............................................................................................................................. 158
Figure 9.1 Illustrative electricity market clearing based on marginal costs ............................ 170
Figure 10.1 Reduction in CO 2 emissions from the baseline scenario in the power
sector in the ACT Map and BLUE Map scenarios in 2050,
by technology area .............................................................................................................................. 179
Figure 10.2 CO 2 capture processes ....................................................................................................................... 181
Figure 10.3 Cost components of the capture costs for a coal and natural
gas power plant ..................................................................................................................................... 185
Figure 10.4 CO 2 avoidance costs for different coal and gas power plants between
2010 and 2030 ......................................................................................................................................... 187
Figure 11.1 LCOE for nuclear ................................................................................................................................... 196
Figure 11.2 LCOE for pulverised coal .................................................................................................................. 197
Figure 11.3 LCOE for IGCC ......................................................................................................................................... 197
Figure 11.4 LCOE for gas ............................................................................................................................................. 198
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