Renewable Energy Auction Prices: Near Subsidy-Free?
Abstract
:1. Introduction
1.1. Setting the Context
1.2. State-of-the-Art
1.3. Contribution
2. Materials and Methods
3. Results
3.1. Auction Prices and LCOE Comparison Results
3.2. NPV and IRR Results for Opposed Cases
3.3. NPV and IRR Sensitivity Results for the Danish Case
4. Discussion
4.1. Analysis of Auction Prices and LCOE Comparison Results
4.2. Analysis of NPV and IRR Results for Opposed Cases
4.3. Analysis of the NPV and IRR Sensitivity Results for the Danish Case
4.4. Final Remarks
5. Conclusions
Author Contributions
Funding
Conflicts of Interest
Acronyms
CfD | contract for differences |
PI | consumer price index |
FIP | Feed-in premium |
IRR | internal rate of return |
LCOE | levelised cost of energy |
NPV | net present value |
OECD | Organization for Economic Co-operation and Development |
O&M | operation and maintenance |
PPA | power purchase agreement |
PV | solar photovoltaics |
RES | renewable energy sources |
UK | United Kingdom |
US | United States |
USD | United States dollar |
WACC | weighted average cost of capital |
Appendix A
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Country | Support | Date | Duration [Years] | Technology | Mean Awarded Bid Price [USD/kWh] |
---|---|---|---|---|---|
Argentina | PPA (in USD) annually adjusted | July 2019 | 20 | Onshore wind | 0.0580 |
Solar PV | 0.0576 | ||||
Small hydro | 0.1034 | ||||
Biomass | 0.1062 | ||||
Biogas | 0.1586 | ||||
Landfill biogas | 0.1295 | ||||
Chile | PPA (in USD) US CPI updated | November 2017 | 20 | Onshore wind | 0.0341 |
Solar PV | 0.0336 | ||||
Geothermal | 0.0347 | ||||
Portugal | PPA | July 2019 | 15 | Solar PV | 0.0227 |
Denmark | Fixed FIP | September–November 2019 | 20 | Onshore wind | 0.0022 |
Solar PV | 0.0028 | ||||
Germany | Sliding FIP | April 2017–April 2018 | 20 | Offshore wind | 0.0323 |
October–November 2019 | Onshore wind | 0.0693 | |||
Solar PV | 0.0548 | ||||
Biomass | 0.1394 | ||||
Netherlands | Sliding FIP | Spring 2019 | 15 | Onshore wind | 0.0458 |
Solar PV | 0.0782 | ||||
12 | Biomass | 0.0391 | |||
Canada | 2-sided CfD periodically adjusted | December 2018 | 20 | Onshore wind | 0.0297 |
Greece | 2-sided CfD | December 2019 | 20 | Onshore wind | 0.0645 |
Solar PV | 0.0670 (≤20 MW) | ||||
Poland | 2-sided CfD CPI updated | 2018 | 15 Or until 31–12–35 | Onshore wind | 0.0541 (≥1 MW) |
Offshore wind | 0.1281 (≥1 MW) | ||||
Solar PV | 0.0966 (<1 MW) | ||||
Small hydro | 0.1281 (≥1 MW) | ||||
Geothermal | 0.1281 (≥1 MW) | ||||
Biomass | 0.1103 (≥1 MW) | ||||
Agricultural biogas | 0.1559 (<1 MW) 0.1394 (≥1 MW) | ||||
UK | 2-sided CfD periodically adjusted | May 2019 | 15 | Offshore wind | 0.0507 (delivery 2023–24) 0.0532 (delivery 2024–25) |
Country | Technology | Investment Cost [USD/kW] | O&M Costs | Capacity Factor [pu] | Lifetime [Years] | Discount Rate [pu] | |
---|---|---|---|---|---|---|---|
Fixed [USD/kW] | Variable [USD/kWh] | ||||||
Argentina | Onshore w. | 1529.34 | 31.72 | 0.00766 | 0.3380 | 25 | 0.100 |
Solar PV | 1433.00 | 30.00 | 0.00000 | 0.1820 | 25 | ||
Small hydro | 2215.39 | 23.20 | 0.00095 | 0.6680 | 30 | ||
Biomass | 1501.21 | 99.40 | 0.00420 | 0.4930 | 20 | ||
Biogas | 2074.56 | 99.40 | 0.00420 | 0.5640 | 20 | ||
Chile | Onshore w. | 1529.34 | 31.72 | 0.00766 | 0.3380 | 25 | 0.075 |
Solar PV | 1210.20 | 30.00 | 0.00000 | 0.1820 | 25 | ||
Geothermal | 3976.34 | 112.16 | 0.00506 | 0.8390 | 25 | ||
Portugal | Solar PV | 1210.20 | 30.00 | 0.00000 | 0.1820 | 25 | 0.075 |
Denmark | Onshore w. | 1891.21 | 31.72 | 0.00766 | 0.3940 | 25 | 0.075 |
Solar PV | 1210.20 | 30.00 | 0.00000 | 0.1820 | 25 | ||
Germany | Onshore w. | 1833.17 | 31.72 | 0.00766 | 0.2900 | 25 | 0.075 |
Offshore w. | 4353.42 | 90.00 | 0.01970 | 0.4250 | 25 | ||
Solar PV | 1113.02 | 30.00 | 0.00000 | 0.1820 | 25 | ||
Biomass | 3373.45 | 99.40 | 0.00420 | 0.8200 | 20 | ||
Netherlands | Onshore w. | 1949.58 | 31.72 | 0.00766 | 0.3090 | 25 | 0.075 |
Solar PV | 1210.20 | 30.00 | 0.00000 | 0.1820 | 25 | ||
Biomass | 3373.45 | 99.40 | 0.00420 | 0.8200 | 20 | ||
Canada | Onshore w. | 1711.78 | 31.72 | 0.00766 | 0.3460 | 25 | 0.075 |
Greece | Onshore w. | 1949.58 | 31.72 | 0.00766 | 0.3380 | 25 | 0.075 |
Solar PV | 1210.20 | 30.00 | 0.00000 | 0.1820 | 25 | ||
Poland | Onshore w. | 1949.58 | 31.72 | 0.00766 | 0.3380 | 25 | 0.075 |
Offshore w. | 4353.42 | 90.00 | 0.01970 | 0.4250 | 25 | ||
Solar PV | 1210.20 | 30.00 | 0.00000 | 0.1820 | 25 | ||
Small hydro | 4802.37 | 23.20 | 0.00095 | 0.4720 | 30 | ||
Geothermal | 3976.34 | 112.16 | 0.00506 | 0.8390 | 25 | ||
Biomass | 3373.45 | 99.40 | 0.00420 | 0.8200 | 20 | ||
Agr. Biogas | 3341.46 | 99.40 | 0.00420 | 0.8390 | 20 | ||
UK | Offshore w. | 4353.42 | 90.00 | 0.01970 | 0.4250 | 25 | 0.075 |
Base Case Assumptions | Germany | Denmark |
---|---|---|
Investment cost [USD/kW] | 2888.23 biomass | 1619.18 onshore wind, 1036.130 solar PV |
Loan duration [years] | 15 | 15 |
Loan amortisation | linear | linear |
Equity [pu] | 0.3 | 0.3 |
Equity Cost [pu] | 0.18 | 0.18 |
Loan fraction [pu] | 0.7 | 0.7 |
Loan interest [pu] | 0.03 | 0.03 |
Corporate tax [pu] | 0.2987 | 0.2200 |
WACC before tax [pu] | 0.075 | 0.075 |
2019 mean market price [USD/kWh] | 0.0411 | 0.0438 |
Annual market price variation [pu] | 0 | 0 |
Country | Technology | Project NPV [USD/kW] | Equity NPV [USD/kW] | Project IRR [%] | Equity IRR [%] |
---|---|---|---|---|---|
Germany | Biomass | 4301.54 | 4871.74 | 23.66% | 65.01% |
Denmark | Onshore wind | −547.50 | −233.15 | 2.90% | 3.55% |
Solar PV | −586.86 | −385.70 | −0.72% | −2.70% |
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Martín, H.; Coronas, S.; Alonso, À.; de la Hoz, J.; Matas, J. Renewable Energy Auction Prices: Near Subsidy-Free? Energies 2020, 13, 3383. https://doi.org/10.3390/en13133383
Martín H, Coronas S, Alonso À, de la Hoz J, Matas J. Renewable Energy Auction Prices: Near Subsidy-Free? Energies. 2020; 13(13):3383. https://doi.org/10.3390/en13133383
Chicago/Turabian StyleMartín, Helena, Sergio Coronas, Àlex Alonso, Jordi de la Hoz, and José Matas. 2020. "Renewable Energy Auction Prices: Near Subsidy-Free?" Energies 13, no. 13: 3383. https://doi.org/10.3390/en13133383
APA StyleMartín, H., Coronas, S., Alonso, À., de la Hoz, J., & Matas, J. (2020). Renewable Energy Auction Prices: Near Subsidy-Free? Energies, 13(13), 3383. https://doi.org/10.3390/en13133383