The Power to Change Cost Reduction Potentials for Solar and Wind 1 - - PowerPoint PPT Presentation
The Power to Change Cost Reduction Potentials for Solar and Wind 1 Continued cost reductions are vital To rapidly meet economic, environmental and social policy goals Accelerating deployment is crucial to keeping open ambitious climate
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Cost Reduction Potentials for Solar and Wind
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Continued cost reductions are vital To rapidly meet economic, environmental and social policy goals Accelerating deployment is crucial to keeping open ambitious climate targets Focus will shift sooner rather than later from competiveness to costs of transition Markets need to be broadened and deepened
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Methodology Top-down learning curve analysis Detailed bottom-up technology-based analysis Approaches complement and inform each other
1992 1998 2002 2004 2011 2014 2025 0.10 1.00 10.00 100.00 1 10 100 1000 10000 100000 1000000 Global average module selling price (2015 USD/W) Cumulative production volume (MW) 2006 c-Si price increase due to polysilicon shortage 22% price reduction for each doubling of cumulative volume 2006 c-Si price increase due to polysilicon shortage 22% price reduction for each doubling of cumulative volume 2006 c-Si price increase due to polysilicon shortage 22% price reduction for each doubling of cumulative volume Cost reduction potentials to 2025
Global weighted average data Investment costs (USD/kW) Percent change Capacity factor Percent change LCOE (USD/kWh) Percent change
2015 2025 2015 2025 2015 2025 Solar PV 1820 830
18% 18% 51 0.13 0.06
CSP (PTC) 5 550 3 700
41% 45% 8.4% 0.15 -0.19 0.09 -0.12
CSP (ST) 5 700 3 600
46% 49% 7.6% 0.15 -0.19 0.08 -0.11
Onshore wind 1 560 1 370
27% 30% 11% 0.07 0.05
Offshore wind 4650 3950
43% 45% 5% 0.18? 0.12
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Continued technology innovation Growing scale of markets Costs will continue to fall for solar and wind power technologies to 2025 Large cost differentials Policy framework critical to unlocking largest savings
New renewable power technologies: rapidly maturing
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Solar PV: Installed system costs to 2025 BoS dominates potential Will require action by policy makers Large average cost reduction potential
Solar PV LCOE to 2025
Highly dependent on BoS convergence scenario
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Onshore wind
Historically every doubling of global capacity has meant: 8% decline in investment costs 12% decline in LCOE
Capacity Hub Height Rotor diameter Yield (for same wind resource) Specific kW costs Increase
Decrease (for same wind resource)
Technology innovation
Onshore wind costs
Capacity factor drives cost reduction potential
Transition to today’s best technology and new Main driver - CF growth
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2000 to 2015 a shift to deeper waters further offshore
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Offshore wind: Installed costs
There are incremental opportunities to reduce capital costs by 2025 across the entire wind farm, from interconnection to project development Inst. costs Reduction driven by: ▪ construction and installation (about 60% of total cost reduction potential) Other ▪ Incremental cost reductions for turbine rotors and nacelles
Projected installed cost reductions for offshore wind, 2015 to 2025
2015-2025 Installed Cost Reduction About 15%
Offshore wind: LCOE
WACC ▪ Reduced cost of capital
(larger pool of experienced developers, maturity of local markets, decreased perceived risks.
Larger Turbines ▪ shift from large 6 MW turbines to very large (8 MW+) ▪ blade and drivetrain improvements
Increased capacity factors Lower downtime Lower O&M Costs
Costs fall by one-third
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Concentrating solar power
Deployment in its infancy! CAPEX could decline by one-third by 2025
PT
▪ USD 5550/kW to
USD 3800/kW 2025
ST
▪ USD 5450/kW to USD 3600/kW
Indirect EPC costs + Owner’s costs also major contributors to reduction potential
Plant Efficiency: 15% currently to 17% by 2025 Plant Efficiency: 15.5% currently to 18% by 2025
Concentrating solar power
By 2025 the LCOE of both parabolic through and solar tower technologies will decrease between 37% and 43%
Main drivers Lower capital investment costs Higher efficiency Reduced WACC
Cost reduction drivers are changing
Low equipment costs change the dynamics Balance of project costs, O&M, financing will grow in importance In some cases more challenging to unlock and integration issues need to be anticipated But cost differentials are large and the policy levers exist
www.irena.org mtaylor@irena.org