For each electricity generation technology in the ATB, this website provides:
Electricity generation technologies are selected on the left side of the screen, and the topics highlighted above can be selected using the drop-down menu at the top right of the screen.
Guidelines for using and interpreting ATB content and comparisons to other literature are provided. LCOE accounts for many variables important to determining the competitiveness of building and operating a specific technology (e.g., upfront capital costs, capacity factor, and cost of financing); however, it does not necessarily demonstrate which technology in a given place and time would provide the lowest cost option for the electricity grid. Such analysis is performed using electric sector models such as the Regional Energy Deployment Systems (ReEDS) model and corresponding analysis results such as the NREL Standard Scenarios.
The NREL Standard Scenarios, a companion product to the ATB, provides a suite of electric sector scenarios and associated assumptions, including technology cost and performance assumptions from the ATB.
ATB data sources and references are also provided for each technology. All dollar values are presented in 2017 U.S. dollars, unless noted otherwise.
Additional information is available here: About the 2019 ATB.
The 2019 ATB characterization for land-based wind updates the Base Year and future wind technology cost and performance estimates from years past to align with current expectations for wind energy costs over the coming decades. This year's ATB characterization for land-based wind relies on a new bottoms-up engineering approach for 2030 turbine and plant technology that is used to inform cost and performance characterizations through 2030. This new approach was developed based on persistent feedback since the release of the Wind Vision report (DOE & NREL, 2015) and the System Management of Atmospheric Resource through Technology (SMART) strategies wind plant analysis (Dykes et al., 2017) , from the wind industry original equipment manufacturer (OEM) and stakeholder community that noted the wind ATB mid case assumptions to be overly conservative. Based on this feedback and observations of substantial technology gains in recently commercialized turbine offerings an array of industry experts now anticipate wind energy LCOEs of 2-2.5 cent/kWh by the mid-2020s, depending on specific financing terms and conditions. In terms of technology gains, the most noteworthy has been the substantial and rapid scaling of wind turbines from the 2-MW to 4-MW with increases in rotor size from approximately 100 m to 150 m. These gains in scale are allowing modern technology to capture turbine level economies of scale and balance of plant efficiencies while placing the turbine in better resource regimes at greater heights above ground level.
To better align with the OEM and industry stakeholder cost reduction expectations NREL redefined the methodology used for estimating future energy costs. Specifically, for this year's ATB NREL used expert input to define one of many potential turbine technology pathways for a Mid and Low scenario in 2030. Bottom-up engineering cost and performance analysis were then executed to obtain the future cost reduction trajectories (Stehly, Beiter, Heimiller, & Scott, 2020) . Although this method has resulted in a cost reduction pathway that maintains and could even accelerate recent significant cost reduction gains, these results are believed to be more in line with wind industry analyst and OEM expectations. There is substantial focus throughout the global wind industry on driving down costs and increasing performance due to fierce competition from within as well as among several power generation technologies including solar PV and natural gas-fired generation.
Representative technologies for land-based wind for the base year (2017) and 2030 assume a 50-MW to 100-MW facility, consistent with current project sizes (Wiser & Bolinger, 2018) . Our base year characterization is extracted from wind turbines installed in the United States in 2017 which were, on average, 2.3-MW turbines with rotor diameters of 113 m and hub heights of 86 m (Wiser & Bolinger, 2018) . Our 2030 representative technology assumes a 4.5-MW turbine with a rotor diameter of 167 m and a hub height of 110 m. Notably turbines that are nearly of this scale (i.e., 4-MW, 150 m rotor and 80-m to 110-m hub height are commercially available today and expected to be installed in facilities in the U.S. in the early 2020s.
Wind resource is prevalent throughout the United States but is concentrated in the central states. Total land-based wind technical potential exceeds 10,000 GW (almost tenfold current total U.S. electricity generation capacity), which would use the wind resource on 3.5 million km2 of land area but would disrupt or exclude other uses from a fraction of that area. This technical potential does not include standard exclusions-lands such as federally protected areas, urban areas, and water. Resource potential has been expanded from approximately 6,000 GW (DOE & NREL, 2015) by including locations with lower wind speeds to provide more comprehensive coverage of U.S. land areas where future technology may improve economic potential.
Renewable energy technical potential, as defined by Lopez et al. (2012) , represents the achievable energy generation of a particular technology given system performance, topographic limitations and environmental and land-use constraints. The primary benefit of assessing technical potential is that it establishes an upper-boundary estimate of development potential. It is important to understand that there are multiple types of potential, including resource, technical, economic, and market potential (see NREL: "Renewable Energy Technical Potential").
The resource potential is calculated by using more than 130,000 distinct areas for wind plant deployment that cover more than 3.5 million km2. The potential capacity is estimated to total more than 10,000 GW if a power density of 3 MW/km2 is assumed.
For each of the 130,000 distinct areas, an LCOE is estimated taking into consideration site-specific hourly wind profiles. Representative wind turbines derived from annual installation statistics are associated with a range of average annual wind speed based on actual historical wind plant installations. This method is described by Moné (2017) and summarized below:
For representation in the ATB, the full resource potential, reflecting the 130,000 individual areas, was divided into 10 techno-resource groups (TRGs). The capacity-weighted average CAPEX, O&M, and capacity factor for each group is presented in the ATB. ATB Base Year costs for land-based wind are calibrated to NREL's 2017 Cost of Wind Energy Review (Stehly, Beiter, Heimiller, & Scott, 2018).
Focusing on future costs, this year's ATB characterization represents an update relative to years past in order to realign with current expectations for costs over the next decade. Three different projections were developed for scenario modeling as bounding levels:
In last year's ATB, the mid case cost projections were informed by the expert survey that reported expected LCOE changes in percentage terms relative to 2014 baseline values (Wiser et al., 2016) . Prior mid case projections were estimated using the entire sample size from the survey work (163 experts) which included strategic, system-level thought leaders with wind technology, costs, and/or market expertise. However, the survey also identified a smaller group – deemed "leading experts" through a deliberative process by a core group of International Energy Agency (IEA) Wind Task 26 members. This leading experts group (22 leading experts) generally expected more aggressive wind energy cost reductions. Recent wind industry data focused on price points more than 3-5 years into the future indicate that costs are falling more quickly than the full sample predicted and more in line with the leading Experts predictions. This year's ATB mid case is informed both by this leading group of experts' predictions as well as the expert input and bottom-up engineering pathways analysis referenced previously.
The Low case is primarily informed by the wind program's Atmosphere to Electrons (A2e) applied research initiative that advances the fundamental science necessary to drive innovation and the realization of the SMART wind power plant of the future (Dykes et al., 2017) . This research in addition to ongoing Wind Energy Technologies Office (WETO) projects including Big Adaptive Rotors (DOE, 2018) , Lightweight Drivetrains (DOE EERE, 2019) , and Tall Towers (2019 Wind Energy Technologies Office Funding Opportunity Announcement, 2019) support the wind industry's ongoing scaling activities and manufacturing improvements and were combined to assess additional potential pathways and related projected cost impacts for each LCOE component.
As done in the expert survey work (Wiser et al., 2016) historical LCOE estimates were compared to the LCOE projections of the Mid and Low scenarios. The LCOE projections were found to require continued sizable cost reductions consistent with and potentially somewhat greater than the historical LCOE trends. Possible justifications for maintaining recent rates of high cost reduction and potentially even going beyond long-term historical LCOE learning include stiff competition from around the globe as well as a highly capitalized industry with annual expenditures on the order of $100 billion. Accordingly, the revised Mid scenario is now considered representative of the reference case for land-based wind. The Low cost scenario projections are derived from the same methodology as the Mid case but applying additional cost reduction potentials from a collection of intelligent and novel technologies that comprise next-generation wind turbine and plant technology and characterized as System Management of Atmospheric Resource through Technology, or SMART strategies (Dykes et al., 2017) . In both scenarios, the overall LCOE reductions resulting from these analyses were used as the basis for the ATB projections. Accordingly, all three cost elements – CAPEX, O&M, and capacity factor – should be considered together; individual cost element projections are derived.
Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year. These expenditures include the wind turbine, the balance of system (e.g., site preparation, installation, and electrical infrastructure), and financial costs (e.g., development costs, onsite electrical equipment, and interest during construction) and are detailed in CAPEX Definition. In the ATB, CAPEX reflects typical plants and does not include differences in regional costs associated with labor, materials, taxes, or system requirements. The related Standard Scenarios product uses Regional CAPEX Adjustments. The range of CAPEX demonstrates variation with wind resource in the contiguous United States.
The CAPEX improvements for future land-based wind projects may be realized through many technology pathways to achieve LCOE reductions. It is also important to note that CAPEX improvements are not the only pathway to LCOE reductions as LCOE is also influenced by capacity factor, financing, O&M, and project life. For the purpose of reducing the vast combinations of future pathways NREL analysts defined a single future turbine configuration in 2030 to conduct the bottom-up cost analysis for the Mid and Low scenarios. The specific 2030 turbine configuration for the Mid scenario assumes a nameplate capacity of 4.5 MW with a rotor diameter of 167 m placed on a 110 m tower. Additional turbine configurations explored that resulted in LCOEs that were within 10% (or less) of the current Mid scenario included turbines with nameplate capacity ratings of 3-MW and 4-MW, rotor diameters down to 150 m, and hub heights up to 140 m. The relatively low sensitivity of LCOE to these changes in turbine configuration is indicative of the array potential pathways and solutions to the LCOE values estimated in this year's ATB.
The defined turbine characteristics were then used to estimate the total system CAPEX of a theoretical commercial scale (e.g., 100-MW) project. Although the relatively low observed sensitivity to significantly different turbine configurations for a single reference site indicate some uncertainty need for and value of wind turbine tailoring for varied site conditions, it is generally expected that over the long-term wind turbine designs will be optimized for a specific plant's site conditions. In this year's ATB, this site-specific design optimization process which is often reflected in different CAPEX values across TRGs was not included. Instead we assumed the single turbine configuration across all 10 TRGs. This simplification was applied due to limited resources and lack of necessary data to robustly characterize CAPEX variation across the 10 TRGs. Nevertheless, the ability to assess and tailor turbine configurations and CAPEX estimates for each TRG is expected to be reimplemented in future iterations of the ATB.
Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.
For the ATB, and based on a capital cost estimates report from EIA (2016) and the System Cost Breakdown Structure defined by Moné et al. (2015), the wind plant envelope is defined to include:
CAPEX can be determined for a plant in a specific geographic location as follows:
Regional cost variations and geographically specific grid connection costs are not included in the ATB (CapRegMult = 1; GCC = 0). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor).
ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for Constant, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.
CAPEX in the ATB does not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., but the ReEDS model does include 134 regional multipliers (EIA, 2016).
The ReEDS model determines the land-based spur line (GCC) uniquely for each of the 130,000 areas based on distance and transmission line cost.
Operations and maintenance (O&M) costs depend on capacity and represent the annual fixed expenditures required to operate and maintain a wind plant, including:
The following figure shows the Base Year estimate and future year projections for fixed O&M (FOM) costs. Three cost scenarios are represented. The estimate for a given year represents annual average FOM costs expected over the technical lifetime of a new plant that reaches commercial operation in that year.
The FOM of $44/kW-yr in the Base Year was estimated in the 2017 Cost of Wind Energy Review (Stehly, Beiter, Heimiller, & Scott, 2018); no variation of FOM with TRG (or wind speed) was assumed. The following chart shows sample historical data for reference.
Future FOM is assumed to decline by approximately 25% by 2050 in the Mid case and 45% in the Low case. These values are informed by recent work benchmarking work for wind power operating costs in the United States (Wiser, Bolinger, & Lantz, 2019).
A detailed description of the methodology for developing future year projections is found in Projections Methodology.
Technology innovations that could impact future O&M costs are summarized in LCOE Projections.
The capacity factor represents the expected annual average energy production divided by the annual energy production, assuming the plant operates at rated capacity for every hour of the year. It is intended to represent a long-term average over the lifetime of the plant. It does not represent interannual variation in energy production. Future year estimates represent the estimated annual average capacity factor over the technical lifetime of a new plant installed in a given year.
The capacity factor is influenced by hourly wind profile, expected downtime, and energy losses within the wind plant. The specific power (ratio of machine rating to rotor swept area) and hub height are design choices that influence the capacity factor.
The following figure shows a range of capacity factors based on variation in the resource for wind plants in the contiguous United States. Historical data from wind plants operating in the United States in 2015, according to the year in which plants were installed, is shown for comparison to the ATB Base Year estimates. The range of Base Year estimates illustrate the effect of locating a wind plant in sites with high wind speeds (TRG 1) or low wind speeds (TRG 10). Future projections are shown for Constant, Mid, and Low technology cost scenarios.
Actual energy production from about 90% of wind plants operating in the United States since 2007 is shown in box-and-whiskers format for comparison with the ATB current estimates and future projections. The historical data illustrate capacity factor for projects operating in 2017, shown by year of commercial online date. As reported in the 2017 DOE Wind Technologies Market Report (Wiser & Bolinger, 2018).
Most installed U.S. wind plants generally align with ATB estimates for performance in TRGs 5-7. High wind resource sites associated with TRGs 1 and 2 as well as very low wind resource sites associated with TRGs 8-10 are not as common in the historical data, but the range of observed data encompasses ATB estimates.
To calculate the Base Year capacity factors the 2017 turbine characteristics (Wiser & Bolinger, 2018) are input into the System Advisor Model, or SAM and run for each of the weighted average wind speeds in each TRG.
The capacity factor is referenced to an 80-m, above-ground-level, long-term average hourly wind resource data from AWS Truepower (2012).
Projections for capacity factors implicitly reflect technology innovations such as larger rotors and taller towers that will increase energy capture at the same location (without specifying precise tower height or rotor diameter changes). Improvements in plant performance through lower losses and increased availability are also included implicitly. In practice future turbine designs will be optimized for a specific site with attempts to maximize capacity factor. This optimization is not captured in this analysis since one turbine configuration is defined for each of the TRGs. Analysts hope to enhance the ability to define site-specific turbine configurations for each TRG in future iteration of the ATB.
Increased energy capture through turbine scaling and wind plant optimization are the two primary factors influencing wind plant capacity factor. The introduction of novel control mechanisms will continue to increase energy capture with more-precise control of the flow through the entire wind plant. These technology advancements are expected to increase capacity factor for all TRGs, with a more rapid rate of increases in capacity factor through 2030 and a slower rate of increase through 2050. This analysis is illustrative of one of many capacity factor improvement pathways for LCOE reduction. Of course, as was the case for CAPEX there are many different pathways to a given capacity factor. Turbine rotor diameter, specific power, and hub height can each be traded off to achieve a given capacity factor, depending on site conditions and relative costs for pursuing one approach or the other; plant layout and operational strategies that impact losses are additional levers that may be used to achieve a given capacity factor.
A detailed description of the methodology for developing future year projections is found in Projections Methodology.
Technology innovations that could impact future O&M costs are summarized in LCOE Projections.
ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for Constant, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.
The ReEDS model output capacity factors for wind and solar PV can be lower than input capacity factors due to endogenously estimated curtailments determined by scenario constraints.
ATB projections were derived from two different sources for the Mid and Low cases:
Projections of the cost of wind energy from the literature provide context for the ATB Constant, Mid, and Low technology cost projections. The ATB Mid cost projection results in LCOE reductions that are higher than other scenarios that are in median range of the literature ((Shreve, 2018), (BNEF, 2018)), and lower than ((Kost, Shammugam, Julch, Huyen-Tran, & Schlegl, 2018), (Wiser et al., 2016)). The ATB Low cost projection, which corresponds to the NREL bottom-up cost analysis, is relatively in line with the leading experts prediction (Wiser et al., 2016).
Levelized cost of energy (LCOE) is a summary metric that combines the primary technology cost and performance parameters: CAPEX, O&M, and capacity factor. It is included in the ATB for illustrative purposes. The ATB focuses on defining the primary cost and performance parameters for use in electric sector modeling or other analysis where more sophisticated comparisons among technologies are made. The LCOE accounts for the energy component of electric system planning and operation. The LCOE uses an annual average capacity factor when spreading costs over the anticipated energy generation. This annual capacity factor ignores specific operating behavior such as ramping, start-up, and shutdown that could be relevant for more detailed evaluations of generator cost and value. Electricity generation technologies have different capabilities to provide such services. For example, wind and PV are primarily energy service providers, while the other electricity generation technologies provide capacity and flexibility services in addition to energy. These capacity and flexibility services are difficult to value and depend strongly on the system in which a new generation plant is introduced. These services are represented in electric sector models such as the ReEDS model and corresponding analysis results such as the Standard Scenarios.
The following three figures illustrate LCOE, which includes the combined impact of CAPEX, O&M, and capacity factor projections for land-based wind across the range of resources present in the contiguous United States. For the purposes of the ATB, the costs associated with technology and project risk in the U.S. market are represented in the financing costs but not in the upfront capital costs (e.g., developer fees and contingencies). An individual technology may receive more favorable financing terms outside the United States, due to less technology and project risk, caused by more project development experience (e.g., offshore wind in Europe) or more government or market guarantees. The R&D Only LCOE sensitivity cases present the range of LCOE based on financial conditions that are held constant over time unless R&D affects them, and they reflect different levels of technology risk. This case excludes effects of tax reform and tax credits, and changing interest rates over time. The R&D + Market LCOE case adds to these financial assumptions: (1) the changes over time consistent with projections in the Annual Energy Outlook and (2) the effects of tax reform and tax credits. The ATB representative plant characteristics that best align with those of recently installed or anticipated near-term land-based wind plants are associated with TRG 4. Data for all the resource categories can be found in the ATB Data spreadsheet; for simplicity, not all resource categories are shown in the figures.
The methodology for representing the CAPEX, O&M, and capacity factor assumptions behind each pathway is discussed in Projections Methodology. In general, the degree of adoption of technology innovation distinguishes the Constant, Mid, and Low technology cost scenarios. These projections represent trends that reduce CAPEX and improve performance. Development of these scenarios involves technology-specific application of the following general definitions:
To estimate LCOE, assumptions about the cost of capital to finance electricity generation projects are required, and the LCOE calculations are sensitive to these financial assumptions. Two project finance structures are used within the ATB:
A constant cost recovery period – or period over which the initial capital investment is recovered – of 30 years is assumed for all technologies throughout this website, and it can be varied in the ATB data spreadsheet.
The equations and variables used to estimate LCOE are defined on the Equations and Variables page. For illustration of the impact of changing financial structures such as WACC, see Project Finance Impact on LCOE. For LCOE estimates for the Constant, Mid, and Low technology cost scenarios for all technologies, see 2019 ATB Cost and Performance Summary.
In general, differences among the technology cost cases reflect different levels of adoption of innovations. Reductions in technology costs reflect the cost reduction opportunities that are listed below.
In 2016, the first offshore wind plant (30 MW) commenced commercial operation in the United States near Block Island (Rhode Island). In 2018, Vineyard Wind LLC and Massachusetts electric distribution companies submitted a 20-year power purchase agreement (PPA) for 800 MW of offshore wind generation and renewable energy certificates to the Massachusetts Department of Public Utilities for review and approval. In the ATB, cost and performance estimates are made for commercial-scale projects with 600 MW in capacity. The ATB Base Year offshore wind plant technology reflects a machine rating of 6 MW with a rotor diameter of 155 m and hub height of 100 m, which is typical of European projects installed in 2016 and 2017 and the turbine rating installed at the Block Island Wind Farm (GE Haliade 150-6MW).
Wind resource is prevalent throughout major U.S. coastal areas, including the Great Lakes. The resource potential exceeds 2,000 GW, excluding Alaska, based on domain boundaries from 50 nautical miles (nm) to 200 nm, turbine hub heights of 100 m (previously 90 m), and a capacity array power density of 3 MW/km2(Walt Musial et al. 2016). A range of technology exclusions were applied based on maximum water depth for deployment, minimum wind speed, and limits to floating technology in freshwater surface ice. Resource potential was represented by more than 7,000 areas for offshore wind plant deployment after accounting for competing use and environmental exclusions, such as marine protected areas, shipping lanes, pipelines, and others.
Based on a resource assessment (Walt Musial et al. 2016), LCOE was estimated at more than 7,000 areas (with a total capacity of approximately 2,000 GW). Using an updated version of NREL's Offshore Regional Cost Analyzer (ORCA) (Beiter et al. 2016), a variety of spatial parameters were considered, such as wind speeds, water depth, distance from shore, distance to ports, and wave height. CAPEX, O&M, and capacity factor are calculated for each geographic location using engineering models, hourly wind resource profiles, and representative sea states. ORCA was calibrated to the latest cost and technology trends observed in the U.S. and European offshore wind markets, including:
The spatial LCOE assessment served as the basis for estimating the ATB baseline LCOE in the Base Year 2017, weighted by the available capacity, for fixed-bottom and floating offshore wind technology. Only sites that exceed a distance to cable landfall of 20 kilometers (km) and a water depth of 10 meters (m) were included in the spatial assessment for the ATB to represent those sites only that are likely to be developed in the near-to-medium term. Long-term average hourly wind profiles are assumed and estimated LCOE reflects the least-cost choice among four substructure types (Beiter et al. 2016):
The representative offshore wind plant size is assumed to be 600 MW (Beiter et al. 2016). For illustration in the ATB, the full resource potential, represented by 7,000 areas, was divided into 15 techno-resource groups (TRGs), of which TRGs 1-5 are representative of fixed-bottom wind technology and TRGs 6-15 are representative of floating offshore wind technology. The capacity-weighted average CAPEX, O&M, grid connection costs, and capacity factor for each group are presented in the ATB.
For illustration in the ATB, all potential offshore wind plant areas were represented in 15 TRGs with TRGs 1-5 representing fixed-bottom offshore technology and TRGs 6-15 representing floating offshore wind technology. These were defined by resource potential (GW) and have higher resolution on the least-cost TRGs, as these are the most likely sites to be deployed, based on their economics. The following table summarizes the capacity-weighted average water depth, distance to cable landfall, and cost and performance parameters for each TRG. The table includes the relative resource potential. Typical offshore wind installations in 2017 that have spatial and economic conditions that may lend themselves well to near-term deployment are associated with TRG 3.
TRG | Weighted Water Depth (m) | Weighted Distance Site to Cable Landfall (km) | Weighted Average CAPEX ($/kW) | Weighted Average OPEX ($/kW/yr) | Weighted Average Net CF (%) | Potential Wind Plant Capacity of Fixed-Bottom/Floating Total (%) | |
Fixed-Bottom | TRG 1 | 18 | 27 | 3,361 | 105 | 45 | 2 |
TRG 2 | 22 | 29 | 3,475 | 106 | 44 | 3 | |
TRG 3 | 24 | 33 | 3,660 | 109 | 44 | 7 | |
TRG 4 | 29 | 57 | 4,001 | 112 | 41 | 44 | |
TRG 5 | 31 | 65 | 4,633 | 107 | 30 | 44 | |
Floating | TRG 6 | 144 | 38 | 4,602 | 77 | 52 | 1 |
TRG 7 | 159 | 45 | 4,661 | 78 | 51 | 2 | |
TRG 8 | 157 | 46 | 4,710 | 78 | 49 | 4 | |
TRG 9 | 148 | 64 | 4,936 | 84 | 49 | 8 | |
TRG 10 | 107 | 101 | 5,209 | 91 | 47 | 15 | |
TRG 11 | 375 | 116 | 5,320 | 98 | 43 | 15 | |
TRG 12 | 467 | 116 | 5,331 | 97 | 36 | 15 | |
TRG 13 | 663 | 166 | 5,785 | 92 | 34 | 15 | |
TRG 14 | 432 | 147 | 6,145 | 87 | 30 | 15 | |
TRG 15 | 468 | 133 | 6,599 | 83 | 28 | 11 |
Future year projections for CAPEX, O&M, and capacity factor in the "Mid Technology Cost" Scenario are derived from the estimated cost reduction potential for offshore wind technologies based on assessments by BVG Associates ((Valpy et al. 2017), (Hundleby et al. 2017)) for 2017-2032. Based on the modeled data between 2017-2032, an (exponential) trend fit is derived for CAPEX, O&M in the "Mid Technology Cost" Scenario, and capacity factor to extrapolate ATB data for years 2033-2050. The specific scenarios are:
Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year. These expenditures include the wind turbine, the balance of system (e.g., site preparation, installation, and electrical infrastructure), and financial costs (e.g., development costs, onsite electrical equipment, and interest during construction) and are detailed in CAPEX Definition. In the ATB, CAPEX reflects typical plants and does not include differences in regional costs associated with labor, materials, taxes, or system requirements. The related Standard Scenarios product uses Regional CAPEX Adjustments. The range of CAPEX demonstrates variation with spatial site parameters in the contiguous United States.
Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.
Based on Moné at al. (2015) and Beiter et al. (2016), the System Cost Breakdown Structure of the ATB for the wind plant envelope is defined to include:
CAPEX can be determined for a plant in a specific geographic location as follows:
Regional cost variations are not included in the ATB (CapRegMult = 1). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor). Because transmission infrastructure between an offshore wind plant and the point at which a grid connection is made onshore is a significant component of the offshore wind plant cost, an offshore spur line cost (OffSpurCost) for each TRG is included in the CAPEX estimate. The offshore spur line cost reflects a capacity-weighted average of all potential wind plant areas within a TRG, similar to OCC.
In the ATB, CAPEX represents the capacity-weighted average values of all potential wind plant areas within a TRG and varies with water depth and distance from shore. Regional cost effects associated with labor rates, material costs, and other regional effects as defined by DOE and NREL (2015) expand the range of CAPEX. Unique land-based spur line costs for each of the 7,000 areas based on distance and transmission line costs expand the range of CAPEX even further. The following figure illustrates the ATB representative plants relative to the range of CAPEX including regional costs across the contiguous United States. The ATB representative plants are associated with a regional multiplier of 1.0.
The following figure shows the Base Year estimate and future year projections for CAPEX costs. Mid and Low technology cost scenarios are shown. Historical data from offshore wind plants installed globally are shown for comparison to the ATB Base Year estimates. The estimate for a given year represents CAPEX of a new plant that reaches commercial operation in that year.
Actual global offshore wind plant CAPEX is shown in box-and-whiskers format for comparison to the ATB current CAPEX estimates and future projections. CAPEX estimates for 2017 correspond well with market data for plants installed in 2017. Projections reflect a continuation of the downward trend observed in the recent past and are anticipated to continue based on preliminary data for 2017 projects.
Base Year estimates for CAPEX were derived using an updated version of NREL's Offshore Regional Cost Analyzer (ORCA) (Beiter et al. 2016). A variety of spatial parameters were considered, such as water depth, distance from shore, distance to ports, and wave height to estimate CAPEX. CAPEX estimates were calibrated to correspond to the latest cost and technology trends observed in the U.S. and European offshore wind markets, including:
A detailed description of the methodology for developing future year projections is found in Projections Methodology.
Technology innovations that could impact future O&M costs are summarized in LCOE Projections.
ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for Constant, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.
CAPEX in the ATB does not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., but the ReEDS model does include 134 regional multipliers (EIA 2013).
The ReEDS model determines offshore spur line and land-based spur line (GCC) uniquely for each of the 7,000 areas based on distance and transmission line cost.
Operations and maintenance (O&M) costs represent the annual fixed expenditures required to operate and maintain a wind plant over its lifetime, including:
The following figure shows the Base Year estimate and future year projections for fixed and floating O&M (FOM) costs. Mid and Low technology cost scenarios are shown. The estimate for a given year represents annual average FOM costs expected over the technical lifetime of a new plant that reaches commercial operation in that year. The range of Base Year O&M estimates reflect the variation in spatial parameters such as distance from shore and metocean conditions.
FOM costs vary by distance from shore and metocean conditions. As a result, O&M costs in the "Mid Technology Cost Scenario" vary from $87/kW-year (TRG 6) to $127/kW-year (TRG 4) in 2017. The average in the ATB "Mid Technology Cost Scenario" for fixed-bottom offshore technology (TRGs 1-5) is $121/kW-year; the corresponding value for floating offshore wind technology (TRGs 6-15) is $97/kW-year.
Future fixed-bottom offshore wind technology O&M is estimated to decline 66% by 2050 in the Mid cost case.
Future floating offshore wind technology O&M is estimated to decline 61% by 2050 in the Mid cost case.
A detailed description of the methodology for developing future year projections is found in Projections Methodology.
Technology innovations that could impact future O&M costs are summarized in LCOE Projections.
The capacity factor represents the expected annual average energy production divided by the annual energy production, assuming the plant operates at rated capacity for every hour of the year. It is intended to represent a long-term average over the lifetime of the plant. It does not represent interannual variation in energy production. Future year estimates represent the estimated annual average capacity factor over the technical lifetime of a new plant installed in a given year.
The capacity factor is influenced by the rotor swept area/generator capacity, hub height, hourly wind profile, expected downtime, and energy losses within the wind plant. It is referenced to 100-m above-water-surface, long-term average hourly wind resource data from Musial et al. (2016).
The following figure shows a range of capacity factors based on variation in the wind resource for offshore wind plants in the contiguous United States. Preconstruction estimates for offshore wind plants operating globally in 2015, according to the year in which plants were installed, is shown for comparison to the ATB Base Year estimates. The range of Base Year estimates illustrates the effect of locating an offshore wind plant in a variety of wind resource (TRGs 1-5 are fixed-bottom offshore wind plants and TRGs 6-15 are floating offshore wind plants). Future projections are shown for Mid and Low technology cost scenarios.
Preconstruction annual energy estimates from publicly available global operating wind capacity in 2017 (Walter Musial et al. forthcoming) are shown in a box-and-whiskers format for comparison with the ATB current estimates and future projections. The historical data illustrate preconstruction estimated capacity factors for projects by year of commercial online date. The figure shows the comparison between the range of capacity factors defined by the ATB TRGs and the reported capacity factors for projects installed in 2017.
The capacity factor is determined using a representative power curve for a generic NREL-modeled 6-MW offshore wind turbine (Beiter et al. 2016) and includes geospatial estimates of gross capacity factors for the entire resource area (Walt Musial et al. 2016). The net capacity factor considers spatial variation in wake losses, electrical losses, turbine availability, and other system losses. For illustration in the ATB, all 7,000 wind plant areas are represented in 15 TRGs.
Projections of capacity factors for plants installed in future years were determined based on estimates obtained from BVG ((Valpy et al. 2017), (Hundleby et al. 2017)) for both fixed-bottom and floating offshore wind technologies. Projections for capacity factors implicitly reflect technology innovations such as larger rotors and taller towers that will increase energy capture at the same geographic location without explicitly specifying tower height and rotor diameter changes.
A detailed description of the methodology for developing future year projections is found in Projections Methodology.
Technology innovations that could impact future O&M costs are summarized in LCOE Projections.
ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for Constant, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.
The ReEDS model output capacity factors for offshore wind can be lower than input capacity factors due to endogenously estimated curtailments determined by scenario constraints.
ATB projections between the Base Year and 2032 (COD) were derived from an expert elicitation conducted by BVG Associates ((Valpy et al. 2017), (Hundleby et al. 2017)). The expert elicitation assesses the impact of more than 50 technology innovations on various cost components of European offshore wind farms up to 2032 (COD). The cost impact from technology innovations was assessed by soliciting industry experts about the maximum cost impact from a technology innovation in combination with an assessment of an innovation's commercial readiness and market share in a given year.
For the ATB, three different technology cost scenarios were adapted from the expert survey results for scenario modeling as bounding levels:
Expert survey estimates from BVG Associates were normalized to the ATB Base Year starting point and applied to overnight capital costs (OCC), FOM, and annual energy production in 2022 (COD), 2027 (COD), and 2032 (COD). These serve as the ATB Mid projection between 2017-2032 (COD). The ATB Mid scenario is intended to represent a cluster of technology innovations that change the manufacturing, installation, operation, and performance of a wind farm consistent with historical cost reduction rates. The ATB Low scenario is intended to represent a cluster of technology innovations that fundamentally change the manufacturing, installation, operation and performance of a wind farm resulting in considerably higher cost reductions than the ATB Mid scenario. The ATB Low scenario is represented by cost reductions that are twice the rate achieved in the ATB Mid scenario. The percentage reduction in LCOE was applied equally across all TRGs. The cost reductions for ATB Mid and ATB Low scenarios between 2032 and 2050 were extrapolated (i.e., exponentially fit) based on the estimated trend between 2017 and 2032 (COD).
Levelized cost of energy (LCOE) is a summary metric that combines the primary technology cost and performance parameters: CAPEX, O&M, and capacity factor. It is included in the ATB for illustrative purposes. The ATB focuses on defining the primary cost and performance parameters for use in electric sector modeling or other analysis where more sophisticated comparisons among technologies are made. The LCOE accounts for the energy component of electric system planning and operation. The LCOE uses an annual average capacity factor when spreading costs over the anticipated energy generation. This annual capacity factor ignores specific operating behavior such as ramping, start-up, and shutdown that could be relevant for more detailed evaluations of generator cost and value. Electricity generation technologies have different capabilities to provide such services. For example, wind and PV are primarily energy service providers, while the other electricity generation technologies provide capacity and flexibility services in addition to energy. These capacity and flexibility services are difficult to value and depend strongly on the system in which a new generation plant is introduced. These services are represented in electric sector models such as the ReEDS model and corresponding analysis results such as the Standard Scenarios.
The following three figures illustrate LCOE, which includes the combined impact of CAPEX, O&M, and capacity factor projections for offshore wind across the range of resources present in the contiguous United States. The R&D Only LCOE sensitivity cases present the range of LCOE based on financial conditions that are held constant over time unless R&D affects them, and they reflect different levels of technology risk. This case excludes effects of tax reform, tax credits, and changing interest rates over time. The R&D + Market LCOE case adds to these financial assumptions: (1) the changes over time consistent with projections in the Annual Energy Outlook and (2) the effects of tax reform and tax credits. The ATB representative plant characteristics that best align with those of recently installed or anticipated near-term offshore wind plants are associated with TRG 3. Data for all the resource categories can be found in the ATB Data spreadsheet; for simplicity, not all resource categories are shown in the figures.
The methodology for representing the CAPEX, O&M, and capacity factor assumptions behind each pathway is discussed in Projections Methodology. In general, the degree of adoption of technology innovation distinguishes the Constant, Mid, and Low technology cost scenarios. These projections represent trends that reduce CAPEX and improve performance. Development of these scenarios involves technology-specific application of the following general definitions:
To estimate LCOE, assumptions about the cost of capital to finance electricity generation projects are required, and the LCOE calculations are sensitive to these financial assumptions. Two project finance structures are used within the ATB:
A constant cost recovery period-over which the initial capital investment is recovered-of 30 years is assumed for all technologies throughout this website, and can be varied in the ATB data spreadsheet.
The equations and variables used to estimate LCOE are defined on the Equations and Variables page. For illustration of the impact of changing financial structures such as WACC, see Project Finance Impact on LCOE. For LCOE estimates for the Constant, Mid, and Low technology cost scenarios for all technologies, see 2019 ATB Cost and Performance Summary.
In general, differences among the technology cost cases reflect different levels of adoption of innovations. Reductions in technology costs reflect the cost reduction opportunities that are listed below:
Concentrating solar power (CSP) technology is currently assumed to be molten-salt power towers. Thermal energy storage (TES) is accomplished by storing hot molten salt in a two-tank system, which includes a hot-salt tank and a cold-salt tank. Stored hot salt can be dispatched to the power block as needed, regardless of solar conditions, to continue power generation and allow for electricity generation after sunlight hours. In the ATB, CSP plants with 10 hours of TES are illustrated. Ten hours is the amount of storage at the Crescent Dunes CSP plant in Nevada, which is representative of most new molten-salt power tower projects.
Molten-salt power towers (with 10 hours of storage) were selected as the representative technology over parabolic trough with synthetic oil-heat transfer fluid for two main reasons. First, most new global capacity of CSP plants in development or under construction are molten-salt power towers; in 2015, 3.7 GWe of molten-salt power towers were in development or under construction ((IRENA 2018), (SolarReserve n.d.)) – compared to 1.3 GWe of parabolic trough (IRENA 2018). Second, current indications are that molten-salt power towers have the greatest cost reduction potential, in terms of both CAPEX and LCOE ((IRENA 2016), (Mehos et al. 2017)). And they are part of the DOE Generation 3 (Gen3) road map for the next generation of commercial CSP plants (Mehos et al. 2017).
Crescent Dunes (110 MWe with 10 hours of storage) was the first large molten-salt power tower plant in the United States. It was commissioned in 2015 with a reported installed CAPEX of $8.96/WAC ((Danko 2015), (Taylor 2016)). No new molten salt storage CSP plants were commissioned in the United States in 2018 or 2019. Molten-salt power tower plants are being bid and built in Chile and Dubai (NREL and SolarPaces n.d.).
Solar resource is prevalent throughout the United States, but the Southwest is particularly suited to CSP plants. The direct normal irradiance (DNI) resource across the Southwest, which is some of the best in the world, ranges from 6.0 to more than 7.5 kWh/m2/day (Roberts 2018). The raw resource technical potential of seven western states (Arizona, California, Colorado, Nevada, New Mexico, Utah, and Texas) exceeds 11,000 GWe, which is almost tenfold current total U.S. electricity generation capacity-considering regions in these states with an annual average resource > 6.0 kWh/m2/day. After accounting for exclusions such as land slope (> 1%), urban areas, water features, and parks, preserves, and wilderness areas (Mehos, Kabel, and Smithers 2009).
Renewable energy technical potential, as defined by Lopez et al. (2012), represents the achievable energy generation of a particular technology given system performance, topographic limitations, and environmental and land-use constraints. The primary benefit of assessing technical potential is that it establishes an upper-boundary estimate of development potential. It is important to understand that there are multiple types of potential – resource, technical, economic, and market (see NREL: "Renewable Energy Technical Potential").
The Solar Programmatic Environmental Impact Statement identified 17 solar energy zones for priority development of utility-scale solar facilities in six western states. These zones total 285,000 acres and are estimated to accommodate up to 24 GWe of solar potential. The program also allows development, subject to a more rigorous review, on an additional 19 million acres of public land. Development is prohibited on approximately 79 million acres.
According to NREL's Concentrating Solar Power Projects website and the CSP Today Global Projects Tracker ("CSP Today Global Tracker" n.d.), 12 of the 14 currently operational CSP plants greater than 5 MWe in the United States use parabolic trough technology, and two are power tower facilities – Ivanpah (392 MWe, utilizing direct steam generation in the towers) and Crescent Dunes (110 MWe, as highlighted, utilizing molten-salt in the tower).
For the ATB, various factors are used to demonstrate the range of LCOE and performance across the United States. These include:
The CSP costs originated from: (1) a NREL survey leading to updated cost estimates in the System Advisor Model (SAM) 2017.09.05; and (2) further cost estimates for CSP components which are now present in SAM 2018.11.11 (Craig Turchi et al. 2019). These SAM 2018 CSP costs were deflated to the ATB Base Year of 2017 via the consumer price index. The SAM 2018 costs translate to ATB costs in 2021 due to the three-year construction period. (SAM costs are based on the project announcement year, while the ATB is based on the plant commissioning year).
Future year projections are informed by a variety of published literature, NREL expertise and technology pathway assessments for CAPEX and O&M cost reductions. Three different projections were developed for scenario modeling as bounding levels:
Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year. These expenditures include the generation plant, the balance of system (e.g., site preparation, installation, and electrical infrastructure), and financial costs (e.g., development costs, and interest during construction) and are detailed in CAPEX Definition. In the ATB, CAPEX reflects typical plants and does not include differences in regional costs associated with labor, materials, taxes, or system requirements. The related Standard Scenarios product uses Regional CAPEX Adjustments. The range of CAPEX demonstrates variation with resource in the contiguous United States.
The following figure shows the Base Year estimate and future year projections for CAPEX costs. Three cost scenarios are represented: Constant, Mid, and Low. The estimate for a given year represents CAPEX of a new plant that reaches commercial operation in that year (i.e., SAM 2018 CSP costs are reflected in the ATB in 2021).
CAPEX is unchanged for resource class because the same plant is assumed to be built in each location. The capacity factor will change with resource.
TES increases plant CAPEX but also increases capacity factor and annual efficiency. TES generally lowers LCOE for power towers.
The CAPEX estimate (with a base year of 2017) is approximately $7,730/kWe in 2017$. It is for a representative power tower with 10 hours of storage and a solar multiple of 2.4. Based on recent assessment of the industry in 2017 and updated CSP systems costs reflected in SAM 2018.11.11 (Craig Turchi et al. 2019), the CAPEX estimate for 2021 is $6,450/kWe in 2017$.
Three cost projections are developed for CSP technologies:
Relative to today's reported CAPEX for plants either announced or in construction, $6,450/kWe in the ATB in 2021 and $4,800/kWe in 2030 is possible. For example, Noor III (150 MWe molten salt power tower with 7.5 hours of storage and operational in 2018), had an estimated CAPEX of $6,500/kWe in 2017$ (Kistner 2016). The Dubai Electricity and Water Authority (DEWA) 700-MWe CSP portion (600-MWe parabolic trough and 100-MWe molten salt tower, each with 12-15 hours of storage), which is in construction had an estimated bundled CAPEX of $5,500/kWe ( (Shemer 2018), (Craig Turchi et al. 2019)).
A detailed description of the methodology for developing future year projections is found in Projections Methodology.
Technology innovations that could impact future O&M costs are summarized in LCOE Projections.
Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.
The ATB represents the year in which a plant starts commercial operation. Accordingly, for plants whose construction duration exceeds one year, CAPEX costs will represent technology costs that are lagging current-year estimates by at least one year. For CSP plants, the construction period is typically three years.
For the ATB – and based on key sources ((EIA 2016), (C. Turchi 2010), and (Craig Turchi and Heath 2013)) – the CSP generation plant envelope is defined to include:
CAPEX can be determined for a plant in a specific geographic location as follows:
Regional cost variations and geographically specific grid connection costs are not included in the ATB (CapRegMult = 1; GCC = 0). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor).
In the ATB, CAPEX represents a typical solar-CSP plant with 10 hours of thermal storage and does not vary with resource. Regional cost effects associated with labor rates, material costs, and other regional effects as defined by the U.S. Energy Information Administration (EIA 2016) expand the range of CAPEX. Unique land-based spur line costs based on distance and transmission line costs expand the range of CAPEX even further. The following figure illustrates the ATB representative plant relative to the range of CAPEX including regional costs across the contiguous United States. The ATB representative plants are associated with a regional multiplier of 1.0.
ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for Constant, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.
CAPEX in the ATB does not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., but the ReEDS model does include 134 regional multipliers (EIA 2016).
The ReEDS model determines the land-based spur line (GCC) uniquely for each potential CSP plant based on distance and transmission line cost.
Operations and maintenance (O&M) costs represent the annual expenditures required to operate and maintain a solar CSP plant over its lifetime, including:
The following figure shows the Base Year estimate and future year projections for fixed O&M (FOM) costs. Three cost scenarios are represented. The estimate for a given year represents annual average FOM costs expected over the technical lifetime of a new plant that reaches commercial operation in that year.
FOM is assumed to be $66/kW-yr until 2021. Variable O&M is approximately $4.1/MWh until 2021 and $3.50/MWh after that (Kurup and Turchi 2015).
Future FOM is assumed to decline to $51/kW-yr by 2030 in the Mid cost case (i.e., approximately a 25% drop) and approximately $40/kW-yr by 2030 in the Low cost case based on DOE investments likely to help to lower costs (DOE 2012).
A detailed description of the methodology for developing future year projections is found in Projections Methodology.
Technology innovations that could impact future O&M costs are summarized in LCOE Projections.
The capacity factor represents the expected annual average energy production divided by the annual energy production, assuming the plant operates at rated capacity for every hour of the year. It is intended to represent a long-term average over the lifetime of the plant. It does not represent interannual variation in energy production. Future year estimates represent the estimated annual average capacity factor over the technical lifetime of a new plant installed in a given year.
Capacity factors are influenced by power block technology, storage technology and capacity, the solar resource, expected downtime, and energy losses. The solar multiple is a design choice that influences the capacity factor.
The following figure shows a range of capacity factors based on variation in the resource, for locations where currently CSP plants could be built in the contiguous United States. The range of the Base Year estimates illustrates the effect of locating a CSP plant at a site with Fair, Good, or Excellent solar resource. The future projections for the Constant, Mid, and Low technology cost scenarios are unchanged from the Base Year. Technology improvements are focused on CAPEX and O&M cost elements.
For illustration in the ATB, a range of capacity factors calculated in SAM 2018.11.11 (NREL n.d.) is associated with three resource locations in the contiguous United States, as represented in the ReEDS model for three classes of insolation:
A key finding from a recent report is that if future costs of CSP decrease sufficiently, it could be deployed across a greater range of the United States and DNI resources. For example, with aggressive cost decreases and due to the regional market constraints, southeastern states with lower DNI resources (e.g., Florida and South Carolina) could see increased CSP capacity deployments of up to 5 GWe (Murphy et al. 2019).
The CSP technologies highlighted in the ATB are assumed to be power towers but with different power cycles and operating conditions as time passes:
While an advanced molten salt projection is used for the ATB Low Cost scenario, lower costs for baseload CSP are being investigated via different technology options (i.e. Solid Particle and Gas phase towers) and as defined by the CSP Gen3 program ((EERE n.d.), (Mehos et al. 2017)).
Over time, CSP plant output may decline. Capacity factor degradation due to mirror and other component degradation is not accounted for in ATB estimates of capacity factor or LCOE.
The ATB capacity factors are generated from Constant, Mid and Low technology cost plant simulations in SAM 2018.11.11 (NREL n.d.).
Estimates of capacity factors for CSP in the ATB represent typical operation. The dispatch characteristics of these systems are valuable to the electric system to manage changes in net electricity demand. Actual capacity factors will be influenced by the degree to which system operators call on CSP plants to manage grid services.
ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for Constant, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.
CSP plants with TES can be dispatched by grid operators to accommodate diurnal and seasonal load variations and output from variable generation sources (wind and solar PV). Because of this, their annual energy production and the value of that generation are determined by the electric system needs and capacity and ancillary services markets.
A range of literature projections is shown to illustrate the comparison with the ATB. When comparing the ATB projections with other projections, note that there are major differences in technology assumptions, radiation conditions, field sizes, storage configurations, and other factors. As shown in the chart, the ATB 2019 CSP Mid projection is in line with other recently analyzed projections from other organizations. The Low cost ATB projection is based on the lower bound of the literature sample, and on the Power to Change report (IRENA 2016).
Projections of future utility-scale CSP plant CAPEX and O&M are based on three different technology cost scenarios that were developed for scenario modeling as bounding levels:
Levelized cost of energy (LCOE) is a summary metric that combines the primary technology cost and performance parameters: CAPEX, O&M, and capacity factor. It is included in the ATB for illustrative purposes. The ATB focuses on defining the primary cost and performance parameters for use in electric sector modeling or other analysis where more sophisticated comparisons among technologies are made. The LCOE accounts for the energy component of electric system planning and operation. The LCOE uses an annual average capacity factor when spreading costs over the anticipated energy generation. This annual capacity factor ignores specific operating behavior such as ramping, start-up, and shutdown that could be relevant for more detailed evaluations of generator cost and value. Electricity generation technologies have different capabilities to provide such services. For example, wind and PV are primarily energy service providers, while the other electricity generation technologies such as CSP can provide capacity and flexibility services in addition to energy. These capacity and flexibility services are difficult to value and depend strongly on the system in which a new generation plant is introduced. These services are represented in electric sector models such as the ReEDS model and corresponding analysis results such as the Standard Scenarios.
The following three figures illustrate LCOE, which includes the combined impact of CAPEX, O&M, and capacity factor projections for power-tower CSP across the range of resources present in the contiguous United States. For the purposes of the ATB, the costs associated with technology and project risk in the U.S. market are represented in the financing costs but not in the upfront capital costs (e.g., developer fees and contingencies). An individual technology may receive more favorable financing terms outside the United States, due to less technology and project risk, caused by more project development experience (e.g., offshore wind in Europe) or more government or market guarantees. The R&D Only LCOE sensitivity cases present the range of LCOE based on financial conditions that are held constant over time unless R&D affects them, and they reflect different levels of technology risk. This case excludes effects of tax reform, tax credits, and changing interest rates over time. The R&D + Market LCOE case adds to these financial assumptions: (1) the changes over time consistent with projections in the Annual Energy Outlook and (2) the effects of tax reform and tax credits. For example, the projected LCOE for most utility scale renewable energy generation technologies could potentially increase from the end of 2020 due to the decreasing levels of the ITC. The ATB representative plant characteristics that best align with those of recently installed or anticipated near-term CSP plants are associated with Tower-Excellent Resource. Data for all the resource categories can be found in the ATB Data spreadsheet; for simplicity, not all resource categories are shown in the figures.
Note: the future projection of the "Good resource" (i.e., for a CSP plant built in Phoenix, Arizona) is not shown in the figures to simplify the figures and because the projection lies between the Excellent and the Fair Resource projections.
The methodology for representing the CAPEX, O&M, and capacity factor assumptions behind each pathway is discussed in Projections Methodology. In general, the degree of adoption of technology innovation distinguishes the Constant, Mid, and Low technology cost scenarios. These projections represent trends that reduce CAPEX and improve performance. Development of these scenarios involves technology-specific application of the following general definitions:
To estimate LCOE, assumptions about the cost of capital to finance electricity generation projects are required, and the LCOE calculations are sensitive to these financial assumptions. Two project finance structures are used within the ATB:
A constant cost recovery period – over which the initial capital investment is recovered – of 30 years is assumed for all technologies throughout this website, and can be varied in the ATB data spreadsheet.
The equations and variables used to estimate LCOE are defined on the Equations and Variables page. For illustration of the impact of changing financial structures such as WACC, see Project Finance Impact on LCOE. For LCOE estimates for the Constant, Mid, and Low technology cost scenarios for all technologies, see 2019 ATB Cost and Performance Summary.
For illustration of the impact of changing financial structures such as WACC, see Project Finance Impact on LCOE. For LCOE estimates for the Constant, Mid, and Low technology cost scenarios for all technologies, see 2019 ATB Cost and Performance Summary.
In general, differences among the technology cost cases reflect different levels of adoption of innovations. Reductions in technology costs reflect the cost reduction opportunities that are listed below.
Energy storage technologies are important to document in the ATB because of their potential role in enhancing grid flexibility, especially under scenarios of high penetration of variable renewable technologies. CSP with TES and Hydropower both include storage capabilities, and a variety of other storage technologies could enhance the flexibility of the electrical grid. This section documents assumptions about only one of them: 4-hour, utility-scale, lithium-ion battery storage. NREL has completed recent analysis on ranges of costs related to other battery sizes (Fu, Remo, & Margolis, 2018) with relative costs represented in Figure ES-1 of the report (included below) which looked at 4-hour to 0.5 hour battery duration of utility scale plants.
The ATB does not currently have costs for distributed battery storage-either for residential nor commercial applications behind the meter nor for a micro-grid or off-grid application. NREL has completed prior work on residential battery plus solar PV system analysis (Ardani et al., 2017) resulting in a range of costs of PV+battery systems as shown in the figure below. Note these costs are for 2016 and published in 2017, so we anticipate battery costs to be significantly lower currently.
Battery cost and performance projections are based on a literature review of 25 sources published between 2016 and 2019, as described by Cole and Frazier (2019) . Three different projections from 2017 to 2050 were developed for scenario modeling based on this literature:
ATB CAPEX, O&M, and round-trip efficiency assumptions for the Base Year and future projections through 2050 for High, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.
The representative technology was a utility-scale lithium-ion battery storage system with a 15-year life and a 4-hour rating, meaning it could discharge at its rated capacity for four hours as described by Cole and Frazier (2019) . Within the ATB spreadsheet, the costs are separated into energy and power cost estimates, which allow capital costs to be constructed for durations other than 4 hours according to the following equation:
For more information on the power vs. energy cost breakdown, see Cole and Frazier (2019) .
Costs of lithium-ion battery storage systems have declined rapidly in recent years, prompting greater interest in utility-scale applications.
The Base Year cost estimate is taken from Fu, Remo, and Margolis (2018). Comparisons to other reported costs for 2018 are included in Cole, Wesley & Frazier, A. Will (2019). Although the ATB uses a 2017 Base Year, the 2018 estimate based on the literature is the first year reported in the ATB, with a value of $1,484/kW in 2017 dollars.
Future projections are taken from Cole and Frazier (2019), which generally used the median of published cost estimates to develop a Mid Technology Cost Scenario and the minimum values to develop a Low Technology Cost Scenario. Analysts' judgment was used to select the long-term projections to 2050 from a sparse data set.
The literature review does not enumerate elements of the capital cost of lithium-ion batteries (Cole, Wesley & Frazier, A. Will, 2019). However, the NREL storage cost report does detail a breakdown of capital costs with the actual battery pack being the largest component but significant other costs are also included. This breakdown is different if the battery is part of a hybrid system with solar PV. These relative costs for utility-scale standalone battery and battery + PV are demonstrated in the figure below (Fu, Remo, & Margolis, 2018).
Cole and Frazier (2019) assumed no variable operation and maintenance (VOM) cost. All operating costs were instead represented using fixed operation and maintenance (FOM) costs. The FOM costs include augmentation costs needed to keep the battery system operating at rated capacity for its lifetime. In the ATB, FOM is defined as the value needed to compensate for degradation to enable the battery system to have a constant capacity throughout its life. The literature review states that FOM costs are estimated at 2.5% of the $/kW capital costs.
In the ATB, the FOM cost remains constant at 2.5% of capital costs in all scenarios.
Round-trip efficiency is the ratio of useful energy output to useful energy input. Cole and Frazier (2019) identified 85% as a representative round-trip efficiency, and the ATB adopts this value.
The ATB includes a single nuclear power plant type. The cost and performance of this plant type is adapted from EIA data rather than derived from original analysis.
Nuclear power plant CAPEX is taken from the AEO2019 Reference Scenario (EIA, 2019a) with the adjustments discussed in the CAPEX definition section. The EIA advanced nuclear option is based on two AP1000 nuclear power plant units built on a brownfield site. The ATB includes only a single CAPEX projection for nuclear plants.
Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.
Overnight capital costs are modified from AEO2019 (EIA, 2019a). The EIA projections were adjusted by removing the material price index. The material price index accounts for projected changes in the price index for metals and metals products, and it is independent of the learning-based cost reductions applied in the EIA projections.
Overnight Capital Cost ($/kW) | Construction Financing Factor (ConFinFactor) | CAPEX ($/kW) | |
Nuclear: Advanced nuclear power generation | $6,200 | 1.087 | $6,742 |
CAPEX can be determined for a plant in a specific geographic location as follows:
Regional cost variations and geographically specific grid connection costs are not included in the ATB (CapRegMult = 1; GCC = 0). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor).
In the ATB, CAPEX represents each type of nuclear plant with a unique value. Regional cost effects associated with labor rates, material costs, and other regional effects as defined by (EIA, 2016) expand the range of CAPEX (Plant × Region). Unique land-based spur line costs based on distance and transmission line costs are not estimated. The following figure illustrates the ATB representative plant relative to the range of CAPEX including regional costs across the contiguous United States. The ATB representative plants are associated with a regional multiplier of 1.0.
Nuclear power plant fixed and variable O&M costs are taken from table 8.2 of the AEO2019, and they are assumed to be constant over time.
The capacity factor represents the assumed annual energy production divided by the total possible annual energy production, assuming the plant operates at rated capacity for every hour of the year. For nuclear plants, the capacity factor is typically the same as (or very close to) their availability factor. For the ATB we assign the nuclear capacity factor as the fleet-wide average from 2017.
Levelized cost of energy (LCOE) is a summary metric that combines the primary technology cost and performance parameters: CAPEX, O&M, and capacity factor. It is included in the ATB for illustrative purposes. The ATB focuses on defining the primary cost and performance parameters for use in electric sector modeling or other analysis where more sophisticated comparisons among technologies are made. The LCOE accounts for the energy component of electric system planning and operation. The LCOE uses an annual average capacity factor when spreading costs over the anticipated energy generation. This annual capacity factor ignores specific operating behavior such as ramping, start-up, and shutdown that could be relevant for more detailed evaluations of generator cost and value. Electricity generation technologies have different capabilities to provide such services. For example, wind and PV are primarily energy service providers, while the other electricity generation technologies provide capacity and flexibility services in addition to energy. These capacity and flexibility services are difficult to value and depend strongly on the system in which a new generation plant is introduced. These services are represented in electric sector models such as the ReEDS model and corresponding analysis results such as the Standard Scenarios.
The following three figures illustrate LCOE, which includes the combined impact of CAPEX, O&M, and capacity factor projections for nuclear across the range of resources present in the contiguous United States. For the purposes of the ATB, the costs associated with technology and project risk in the U.S. market are represented in the financing costs but not in the upfront capital costs (e.g., developer fees and contingencies). An individual technology may receive more favorable financing terms outside the United States, due to less technology and project risk, caused by more project development experience (e.g., offshore wind in Europe) or more government or market guarantees. The R&D Only LCOE sensitivity cases present the range of LCOE based on financial conditions that are held constant over time unless R&D affects them, and they reflect different levels of technology risk. This case excludes effects of tax reform, tax credits, and changing interest rates over time. The R&D + Market LCOE case adds to these financial assumptions: (1) the changes over time consistent with projections in the Annual Energy Outlook and (2) the effects of tax reform and tax credits.
The LCOE of nuclear power plants is directly impacted by the cost of uranium, variations in the heat rate, and O&M costs, but the biggest factor is the capital cost (including financing costs) of the plant. The LCOE can also be impacted by the amount of downtime from refueling or maintenance. For a given year, the LCOE assumes that the fuel prices from that year continue throughout the lifetime of the plant.
Fuel prices are based on the AEO2019 (EIA, 2019a).
To estimate LCOE, assumptions about the cost of capital to finance electricity generation projects are required, and the LCOE calculations are sensitive to these financial assumptions. Two project finance structures are used within the ATB:
The equations and variables used to estimate LCOE are defined on the Equations and Variables page. For illustration of the impact of changing financial structures such as WACC, see Project Finance Impact on LCOE. For LCOE estimates for the Constant, Mid, and Low technology cost scenarios for all technologies, see 2019 ATB Cost and Performance Summary.
2019 Wind Energy Technologies Office Funding Opportunity Announcement. (2019, April). U.S. Department of Energy, EERE.
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