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June 11, 2008 11:01 ET

High Growth Reported for The Cost of Power Generation: The current and future competitiveness of renewable and traditional technologies

LONDON, UNITED KINGDOM--(Marketwire - June 11, 2008) - Reportlinker.com announces that a new market research report related to the Power generation industry is available in its catalogue.

The Cost of Power Generation: The current and future competitiveness of renewable and traditional technologies

http://www.reportlinker.com/p089734/The-Cost-of-Power-Generation-The-current-and-future-competitiveness-of-renewable-and-traditional-technologies.html

The Cost of Power Generation

The current and future competitiveness of renewable and traditional technologies

Conditions within the power industry have changed significantly in recent years. The rising cost of natural gas has made this an expensive source of power, while concern about global warming and the introduction of limits on CO2 emissions will have a profound effect on the use of coal for power generation, at least in the developed world. In consequence nuclear power has its best chance of a revival for a generation and renewable energy is gaining ground as technology is refined and experience grows.

The Cost of Power Generation is a new report published by Business Insights that assesses the current and future case for investment in traditional versus renewable energy. This report analyzes all available data to directly compare the investment case and future prospects of different power generation technologies. It also examines the results of our proprietary executive survey to provide a unique benchmark of how decision makers within the energy industry forecast the future of power generation and the issues influencing those changes.

Identify the most competitive forms of power generation using this report's detailed analysis of the true costs of power generation.

This new report will enable you to...

- Assess the relative cost benefits of renewable and traditional technologies throughout their lifecycles.

- Identify the key factors that impact on the costings of new energy projects, including structural costs, operational costs, grid extension costs, subsidies and externalities.

- Analyse the impact of increased renewable penetration on the structural costs and capacity of energy networks.

- Predict the effect of changes in fuel prices on the competitiveness of renewable technologies.

- Understand why cost of power estimates have changed over the past three years.

- Benchmark industry executive opinion on the future roles of traditional and renewable energy and the significance of a proposed hydrogen economy.

Key questions answered by this report...

- Which technologies will be the most competitive now and in the next ten years?

- How does market structure affect the pricing and penalisation of green energy?

- What is the cheapest renewable energy source?

- How does geographical location affect cost estimates for power generation technologies?

- What are the weaknesses of traditional fossil fuels in terms of the long-term cost implications?

- When do industry executives forecast renewable energy to take a majority share of electricity production?

- What impact does government policy have on the relative competitiveness of competing power generation technologies?

Evaluate the costs of traditional versus renewable power generation using this report's analysis of historical, structural and lifecycle costs...

Key findings from this report...

- There have been major changes in estimates of capital costs of renewable technologies since 2003, for example, cost estimates for fuel cells were 244% higher in 2007 than in 2003.

- The advance of renewables is likely to be slower than their competitiveness would suggest. Wind generation is becoming more competitive relative to fossil fuels but the global wind turbine manufacturing capacity is far too small to fill the gap today.

- Levelized costs for power generation technologies differ by geography. In California, geothermal and wind power have the lowest costs while Vattenfall data suggests nuclear power is the cheapest source.

- 43% of Business Insights survey respondents consider the proposed hydrogen economy for future electricity generation significant compared to 52% in 2005.

- Solar cells cost could fall below $1/W by 2020 and $0.5/W by 2030, assuming 20% annual solar cell production growth.

Executive summary 10

Introduction 10

Levelized cost 10

Risk 11

Historical costs 12

The cost of carbon 12

Market distortions 13

The cost of power 14

The Business Insights 2008 Industry survey 14

Chapter 1 Introducing the cost of power 16

Introduction 16

The structure of the report 18

Chapter 2 Levelized cost: the traditional approach to estimating the cost of power 22

Introduction 22

Capital costs 23

Capacity factor 29

Financing capital cost 32

Levelized cost of electricity 33

Interest, discount rate and present value 35

Chapter 3 Introducing risk into cost of electricity estimates 44

Introduction 44

Fuel prices and fuel price volatility 45

Fuel price risk 49

Portfolio planning theory 52

Chapter 4 Historical costs of electricity and the technology learning effect 58

Introduction 58

Historical costs of electricity 58

Retail cost and levelized cost 61

Technology costs 62

Chapter 5 CO2 lifecycle emissions and the cost of carbon 68

Introduction 68

Lifecycle greenhouse gas emissions 70

Placing a price on carbon 74

Actual carbon costs: the European Trading Scheme 77

Chapter 6 Factors distorting the price of electricity 80

Introduction 80

Structural costs 81

Grid extension 82

Operational costs 86

Externalities 89

Subsidies 92

Fuel subsidies 94

Tariff subsidies 96

Quotas 97

Taxes 97

Chapter 7 The cost of power 100

Introduction 100

Levelized cost trends 102

Chapter 8 Business Insights Executive Survey 112

Introduction 112

Competitiveness of power generation technologies 112

Impact on the competitiveness of renewable energy 115

Impact on the uptake of renewable energy 116

Changes in the use of fossil fuels 117

List of Figures

Figure 2.1: Comparison of capital cost estimates ($/kW), 2003 and 2007 28

Figure 2.2: Typical capacity factors for power generating plants 31

Figure 2.3: Levelized cost of generation by type ($/MWh), California 2007 38

Figure 2.4: Levelized costs as estimated by Vattenfall (EUR /MWh) 40

Figure 2.5: Mean levelized costs from published global figures (Pounds Sterling /MWh) 41

Figure 3.6: Average world oil prices ($/barrel), 1989-2008 47

Figure 4.7: Annual US photovoltaic module production costs (Cost ($/W), 1970-2005 64

Figure 4.8: Global solar cell production (MWp), 1993-2010 65

Figure 5.9: Energy payback ratios 69

Figure 5.10: Lifetime greenhouse gas emissions for different power generation technologies (kgCO2/kWh) 73

Figure 6.11: Balancing costs for 20% wind penetration and energy storage (EUR /MWh) 88

Figure 6.12: External costs for various power generation technologies within the EU (EUR /MWh) 90

Figure 6.13: Fuel subsidies as a percentage of GDP (% of GDP) 95

Figure 7.14: Levelized cost comparison, 2003 vs 2007 ($/MWH) 104

Figure 7.15: Comparative levelized costs of full range of generating technologies ($/MWh) 107

Figure 8.16: The relative competitiveness of power generation technologies in 2008 and 2018 113

Figure 8.17: How important are the following for the competitiveness of renewable energy? 115

Figure 8.18: How important are the following for the uptake of renewable energy? 117

Figure 8.19: How important are the following to changes in the future use of fossil fuel for power generation? 118

Figure 8.20: In how many years would you expect renewable energy to contribute half of global electricity generation? 120

Figure 8.21: How significant do you consider the proposed hydrogen economy for future electricity generation? 121

List of Tables

Table 2.1: Capital costs of power generating technologies in the US ($/kW) 27

Table 2.2: Comparison of capital cost estimates ($/kW), 2003 and 2007 28

Table 2.3: Typical capacity factors for power generating plants (%) 30

Table 2.4: Present value of $1m as a function of discount rate 35

Table 2.5: Levelized cost of generation by type ($/MWh), California 2007 37

Table 2.6: Levelized costs as estimated by Vattenfall (EUR /MWh) 39

Table 2.7: Mean levelized costs from published global figures (Pounds Sterling /MWh) 41

Table 3.8: Average world oil prices ($/barrel), 1989-2008 46

Table 3.9: The comparative cost of natural gas for electricity generation ($/107kcals) 48

Table 3.10: The comparative cost of steam coal for power generation ($/tonne) 49

Table 4.11: The comparative cost of electricity for industry ($/MWh), 1998-2006 59

Table 4.12: The comparative cost of electricity for domestic use ($/MWh), 1998-2006 61

Table 4.13: Annual US photovoltaic module production costs (Cost ($/W), 1970-2005 64

Table 4.14: Global solar cell production (MWp), 1993-2010 65

Table 5.15: Energy payback ratios 69

Table 5.16: Lifetime greenhouse gas emissions for different power generation technologies (kgCO2/kWh) 72

Table 6.17: Grid extension costs as a function of wind penetration (EUR /MWh) 84

Table 6.18: Transmission and distribution costs in 2020 associated with increasing UK renewable contribution above 10% after 2010 (Pounds Sterling m/y) 85

Table 6.19: Balancing costs for 20% wind penetration and energy storage (EUR /MWh) 88

Table 6.20: External costs for various power generation technologies within the EU (EUR /MWh) 90

Table 6.21: Fuel subsidies as a percentage of GDP (% of GDP) 94

Table 7.22: Levelized cost comparison, 2003 vs 2007 ($/MWH) 103

Table 7.23: Comparative levelized costs of full range of generating technologies ($/MWh) 106

Table 8.24: The relative competitiveness of power generation technologies in 2005, 2008 and 2018 113

Table 8.25: The relative competitiveness of power generation technologies in 2018 and 2013 114

Table 8.26: How important are the following for the competitiveness of renewable energy? 115

Table 8.27: How important are the following for the uptake of renewable energy? 116

Table 8.28: How important are the following to changes in the future use of fossil fuel for power generation? 118

Table 8.29: What is the best way to implement carbon emission controls? 119

Table 8.30: What percentage of global electricity production will be supplied by renewable energy in ten years? 119

Table 8.31: In how many years would you expect renewable energy to contribute half of global electricity generation? 120

Table 8.32: How significant do you consider the proposed hydrogen economy for future electricity generation? 121

To order this report:

The Cost of Power Generation: The current and future competitiveness of renewable and traditional technologies

http://www.reportlinker.com/p089734/The-Cost-of-Power-Generation-The-current-and-future-competitiveness-of-renewable-and-traditional-technologies.html

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