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2007 Concentrating Solar Power USA DOE

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2007 Concentrating Solar Power USA DOE ( 2007-concentrating-solar-power-usa-doe )

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in conducting due diligence studies for the fossil power industry. This approach let engineers experienced in due diligence perform the detailed analysis. In its second report the NRC’s committee members commented on the assumptions, methodology, data and its validation, and the results in S&L’s draft report. Sargent and Lundy Study32 S&L examined available industry and national lab analyses, developed its own analyses, and used its own engineering expertise to evaluate CSP’s potential. S&L assumed deployment rates that it believed were relatively low, ranging from 2.8 to 5 gigawatts (GW) over 15 years. S&L found that the levelized cost of energy (LCOE) for CSP was currently in the range of 10-12.6 cents/kWh or, stated another way, about $2,400- $3,000/kW. S&L concluded that costs could be reduced to between 3.5-6.2 cents/kWh by 2020.33 LCOE is a measurement of the cost of producing energy from a technology, and includes the net present value of all capital, O&M, fuel, and other costs. The cost reduction found by S&L was due to three factors: technology development, plant size, and mass production. Figure 3 shows an S&L scenario in which the LCOE from trough technologies is reduced as the technology is deployed. Deployment is important because it enables industry to build increasingly larger power plants which incorporate economies of scale and build components in large enough quantities to take advantage of savings due to mass production. S&L concluded that “CSP technology is a proven technology for energy production, there is a potential market for CSP technology, and that significant cost reductions are achievable assuming reasonable deployment of CSP technology occurs.”34 However, S&L also found that “policy-based incentives are needed for initial introduction of technologies and that both R&D and deployment of technology are necessary.”35Analysis of incentives required to reach market acceptance was outside the scope of the S&L report. 0.30 0.25 0.20 0.15 0.10 0.05 0.00 1984 14-MW SEGS 1988 30-MW SEGS 1989 80-MW SEGS Current Potential 2004 Technology, 50-MWe Size Future Cost Potential 2004-2012 0 1000 2000 3000 4000 5000 Cumulative Installed Capacity (MWe) 5 Factors Contributing to Cost Reduction - Scale-up 37% - Volume Production 21% - Tech Development 42% LCOE 2002$/kWh

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