An Enhanced Techno-Economic Analysis of LCOE: Public Incentives vs Private Investment
- Resource Type
- Authors
- María Teresa García-Álvarez; Alejandro Parra Martín; Rogelio Peón Menéndez; Laura Varela-Candamio
- Source
- RUC: Repositorio da Universidade da Coruña
Universidade da Coruña (UDC)
Technological and Economic Development of Economy; Vol 27 No 1 (2021); 1-23
Technological and Economic Development of Economy; Articles in Press; 1-23
Technological and Economic Development of Economy, Vol 27, Iss 1, Pp 1-23 (2021)
RUC. Repositorio da Universidade da Coruña
Universitat Oberta de Catalunya (UOC)
- Subject
- Renewable energy
HF5001-6182
Natural resource economics
Levelized cost of energy
Public policy
020209 energy
public policy
Economic growth, development, planning
02 engineering and technology
020401 chemical engineering
shareholder returns
0202 electrical engineering, electronic engineering, information engineering
Economics
Business
0204 chemical engineering
Cost of electricity by source
Shareholder returns
business.industry
Techno economic
Investment (macroeconomics)
renewable energy
CSP energy
Incentive
Spain
HD72-88
levelized cost of energy
business
Finance
- Language
- ISSN
- 2029-4921
2029-4913
[Abstract] This paper offers a new approach for the estimation of levelized cost of energy (LCOE) by considering the shareholder internal rate of return (IRR) as an unexplored measure in this kind of analysis. The study relies on a comprehensive techno-economic evaluation based on interactions among a set of factors. This mathematical model is then empirically tested for a CSP power plant in Extremadura (Spain) due to their dominant market position and also for being the most developed renewable system at the present. A sensitivity analysis is also performed to establish the influence that market conditions have on the determination of LCOE for different scenarios under the maintenance of a given shareholder IRR for investors. This last assumption makes investment decisions indifferent among several projects in order to focus solely on the minimization of the LCOE. Results reveal that while the annual net electricity production contributes to the reduction of LCOE, total investments, equity percentage and operation and maintenance (O&M) costs help to increase their value by a high percentage. This study gives important scientific basis for investment decision making and also becomes a standpoint to design suitable public incentives that may enhance future technological developments in the CSP generation industry.