- Review of key current CSP financial incentives and their stability going forward
- Demonstration/case study of how incentives impact a CSP plant’s levelized cost of electricity (LCOE)
Jay Paidipati, Managing Consultant, NAVIGANT
14. Case Study » Technical Assumptions
A parabolic trough plant was chosen for the case study because the
most public data exists on parabolic trough performance.
Technical Assumptions New Mexico DNI Map
Technology Parabolic Trough
Plant Size [MW] 150
Southwestern New
Location
Mexico
First Year Production [GWh] ~420
Storage? No
Natural Gas Back Up? No
Cooling Technology Wet Tower
National Renewable
Production Model Software Energy Laboratory’s
Solar Advisor Model
Approximate
Source: National Renewable Energy Laboratory at
Location Chosen http://www.nrel.gov/csp/maps.html#nm
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15. Case Study » Economic Assumptions
Economic Assumptions
Installed Cost1,2 [$/kW] $4,750
Construction Time [Months] 24
Construction Loan Rate 8%
Term Loan Rate 7%
Cost of Equity 9%
Project Debt/Equity Split 60%/40%
Assumed NM Gross Receipts Tax Rate3 6.375%
Annual Fixed O&M [$/kW-Yr] 63
Variable O&M [$/MWh] 0.8
1. Installed costs include Interest During Construction and Escalation During Construction.
2. Installed cost does not include any potential transmission upgrades or long-distance transmission. It only includes
transmission required to get to reach a substation.
3. New Mexico has a gross receipts tax in lieu of a sales tax
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16. Case Study » LCOE Impacts
New Mexico’s state level incentives can impact LCOE up to 13% on
top of federal incentives.
Impact of State Level Incentives
25
% Reduction After Federal Incentives
Levlized Cost Of Electricity [¢/kWh]
20
15
5% 8% 13%
10
5
0
1 = LCOE W/O 2 = 1 - Federal ITC 3 = 2 - Accelerated 4 = 3 - Advanced 5 = 3 - State 6 = 3 - State
Incentives Depreciation Energy Tax Credit Production Tax Production Tax
Credit Credit and
Advanced Energy
Tax Credit*
* The New Mexico Energy, Minerals and Natural Resources Department is still investigating if a facility can take both the
production tax credit and the advanced energy tax credit. 15
17. Key Takeaways
• State level incentives appear to be stable
over the near- and mid-term.
• State level incentives can have an
appreciable (>5%) impact on a CSP
plant’s economics.
Jay Paidipati
Managing Consultant
San Francisco, CA 94105
415-399-2191
jpaidipati@navigantconsulting.com
Any
Questions?
18. About NCI » Energy Practice
Navigant Consulting, Inc. (NCI) is a specialized consulting firm known
globally for its emerging energy technology and strategy expertise.
Navigant Consulting Energy Practice
Energy Practice
Business Planning
Business Emerging
Emerging
• Publicly traded Power Systems,
Power Systems, & Performance
& Performance Technologies &
Technologies
since 1996 Markets & Pricing
Markets & Pricing Improvement
Improvement Energy Efficiency
Energy Efficiency
(NYSE: NCI)
• 2008 revenues - Resource Customer
Renewables
Procurement Strategies
$811 million
• 41 offices globally Market
Generation Emerging
Modeling &
Services Technology
Economics
Performance Energy
Fuel Services
Improvement Efficiency
Transmission
Rates &
Regulatory
Navigant Consulting named "Best Advisory – Renewable Energy" in the 9th Annual
Environmental Finance and Carbon Finance Market Survey
17
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19. About NCI » Energy Practice
NCI’s renewable energy service offering spans technology, policy and
markets across all major geographical regions.
Resource, Strategy Resource
Policy Technology Development & Asset Market Research
Development & Market & Business Acquisition & Education
Assessment Planning & Development
• Policy impacts • Incorporation of • Strategic planning and • “Make” vs. “Buy” • Public meeting
• RPS portfolio renewables in Executive Visioning • M&A facilitation
development Integrated Resource • Competitive • Project feasibility • Photovoltaic
• Program resource Planning positioning • Power purchase and service offering
allocations • Market size • Business models sales agreements and newsletters
estimates • Diversified portfolio • Transmission rights and • Survey and focus
• Cost Projections development interconnection group research
• Forward price • Risk management • Project financing and
curves for RECs • Implementation valuations
and locational strategies • Asset/investment
pricing
optimization
• Technology and • RFP development
manufacturing due
diligence • Evaluation of renewable
bids
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