U6L7 Alternative Energy Solutions Flashcards
No matter the type of energy, power-generating facilities have 2 aim categories of cost. What are they?
Capital costs and operating costs
What are capital costs?
Fixed costs and include things like infrastructure, land, buildings, and equipment.
What are operating costs?
Costs that vary over time and include the cost of fuel, labor, and maintenance.
What do operating costs of renewable energy sources look like?
For renewable energy sources, such as wind, solar, and geothermal, the fuel is mostly free. Labor and maintenance costs comprise the bulk of the operating costs.
What do capital costs for renewable power-generating systems look like?
However, capital costs for renewable power-generating systems and facilities tend to be much greater than for coal and natural gas plants. Capital costs can include equipment such as solar panels and wind turbines.
How do operating costs look like for fossil fuels?
While capital costs are lower for fossil fuel plants, the fuel cost tends to dominate the total cost of operations and is highly dependent on the fluctuating cost of fuel. As a result, operating costs are generally higher for coal and natural gas plants.
What is the levelized cost of energy (LCOE) used for?
Economists often use a measure known as the levelized cost of energy (LCOE) to compare different methods of energy generation.
What is the LOCE?
The LCOE is the average total cost to build and operate a power-generating asset over its lifetime, also called the total cost of ownership, divided by the total energy output of that asset over its lifetime.
LCOE of different resources.
wind: $0.032/kWh to $0.077/kWh
solar photovoltaic (thin film utility scale): $0.050/kWh to $0.050/kWh
solar photovoltaic (rooftop residential): $0.184/kWh to $0.300/kWh
geothermal: $0.082/kWh to $0.117/kWh
biomass direct: $0.082/kWh to $0.110/kWh
natural gas (combined cycle): $0.052/kWh to $0.078/kWh
coal: $0.065/kWh to $0.150/kWh
Equation of LOCE:
(Capital costs)+(average yearly operating costs)x(number of project years)/(total production)
The LCOE considers all power-generating system costs. However, it has one downside when it comes to wind and solar power, what it is?
However, it does not necessarily include the cost of delivering wind and solar power into the grid system that transmits electricity from the power system or facility to the end user. Two technical challenges faced by the grid in regard to renewable energy are the location and variability of renewable energy generation. Renewable energy resources are usually located far from urban cities, although increasing numbers of solar panels are being installed in some cities. Additionally, the unpredictability of weather can affect wind and sunlight conditions, creating variation in the amount of energy generated.
Which of the following is a characteristic of levelized cost of energy (LCOE)?
It is the minimum price per kWh at which electricity must be sold in order to break even over the lifetime of a power-generating project.
Which of the following statements is true for both solar energy and wind energy?
Power generation using this energy source does not contribute to water pollution.
A solar energy project is expected to have capital costs of $785,000, average yearly operating costs of $123,000, and a lifetime of 25 years. If the estimated yearly production during the lifetime of the project is 3,580,000 kWh, what is the levelized cost of energy (LCOE)?
0.043
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When calculating LCOE, the capitalized costs are not multiplied by the number of years. Multiply the average yearly operating costs by the number of years before adding in the capitalized costs.
