Renewable energy modelled under three future scenarios
Using a baseline projection as well as high-cost and low-cost renewable energy scenarios, the report projects that overnight capital costs (excluding interest charges but including contingency, learning, and technological optimism factors, as well as a contingency allowance) could be as low as US$902/kW for hydroelectric output by 2035, while geothermal could be US$2955, solar PV US$2467, solar thermal electric US$1918, offshore wind US$1997 and onshore wind could cost as little as US$1414 under the low-cost renewable energy scenario.
Under the high-cost renewable energy scenario, geothermal could be US$5762, solar PV US$5061, solar thermal electric US$4209, offshore wind US$3150 and onshore wind could cost US$1935 by 2035.
Factors which impact capital costs for renewable energy
Capital costs for renewable energy technologies are affected by several factors, including the technology to exploit some resources (especially geothermal, hydroelectric and wind). “Short-term cost adjustment factors increase technology capital costs as a result of a rapid US buildup in a single year, reflecting limitations on the infrastructure to accommodate unexpected demand growth.”
For capacity factors, geothermal could be 0.90 by 2035 while solar PV would be 0.21, solar thermal electric 0.31, offshore wind 0.45 and onshore wind could be 0.40 under the low-cost renewable energy.
The assumptions for concentrating solar power (CSP)and solar PV reflect a 50 MW central receiver and a 5 MW single axis tracking-flat plate solar PV facility. Solar PV is assumed available in all regions, while solar thermal is available only in 6 western regions with the arid atmospheric conditions that result in the most cost-effective capture of direct sunlight.
“Because solar technologies are more expensive than other utility grid-connected technologies, early
penetration will be driven by broader economic decisions such as the desire to become familiar with a
new technology, environmental considerations, and the availability of limited federal subsidies,” it notes. “Solar resources are well in excess of conceivable demand for new capacity; energy supplies are
considered unlimited within regions.”
“Because of limits to windy land areas, wind is considered a finite resource” so the submodule calculates
maximum available capacity by region.
The minimum economically-viable average wind speed is 14 mph, and capital costs for wind technologies are assumed to increase in response to declining natural resource quality (eg: terrain slope, terrain roughness, terrain accessibility, wind turbulence, wind variability) and the increasing cost of upgrading existing local and network distribution and transmission lines to accommodate growing quantities of remote wind power, as well as market conditions such as the increasing costs of alternative land uses, including aesthetic or environmental reasons.
A summary of the Annual Energy Outlook 2010 was issued earlier this year; the full report is expected to be released later this month.
The assumptions explain the general features of the model used and the key parameters that guide the outputs. The projections were produced with the National Energy Modeling System (NEMS), which was developed by DoE to perform policy analyses requested by the White House, Congress and government agencies.
The NEMS module on renewable fuels develops sub-modules for biomass, geothermal, conventional hydroelectricity, landfill gas, solar thermal, solar photovoltaics and wind. In addition to projections for renewable energy used in central station electricity generation, the Outlook contains projections of renewable energy used in green heat (biomass consumption, solar water heating, geothermal heat pumps).