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

Mahmood Shafiee, Adel Alghamdi, Chris Sansom, Phil Hart and Adriana Encinas-Oropesa
Additional contact information
Mahmood Shafiee: School of Engineering and Digital Arts, University of Kent, Canterbury CT2 7NT, UK
Adel Alghamdi: Department of Energy and Power, Cranfield University, Bedfordshire MK43 0AL, UK
Chris Sansom: Department of Energy and Power, Cranfield University, Bedfordshire MK43 0AL, UK
Phil Hart: Department of Energy and Power, Cranfield University, Bedfordshire MK43 0AL, UK
Adriana Encinas-Oropesa: Centre for Competitive Creative Design, Cranfield University, Bedfordshire MK43 0AL, UK

Energies, 2020, vol. 13, issue 7, 1-20

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 50 MW 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.

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) (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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