DOE OSTI2019
For solar electricity generating technologies to be cost competitive at a large scale with conventionally generated electricity, cost reductions are needed for both concentrating solar power (CSP) and solar photovoltaic (PV) systems. In 2011, the U.S. Department of Energy (DOE) established solar cost targets that corresponded to reducing CSP and PV prices by approximately 75% in order to achieve a levelized cost of electricity (LCOE) of $0.06 per kilowatt-hour (kWh) for both utility-scale PV and high-capacity factor CSP-TES systems in 2020. Utility-scale PV achieved its 2020 cost target in 2017, and recent estimates for the LCOE of CSP-TES with a molten-salt power tower system are approximately $0.10/kWh for projects that are expected to come online in 2020, which represents a substantial reduction since 2010 - when the LCOE for CSP-TES was around $0.21/kWh. To continue the momentum for cost reductions in solar technologies, DOE recently established cost targets for 2030 that would make solar one of the lowest-cost sources of new electricity in the United States. For CSP-based systems, the new targets correspond to an LCOE in 2030 of $0.05/kWh for a dispatchable, high-capacity factor CSP-TES plant configuration. This aggressive target would have been unimaginable a decade ago. However, building on the previously described reduction in CSP-TES costs over the past decade, recent announcements suggest the next phase of projects will continue this downward trend through lower installation costs, attractive financing, longer-duration PPAs, and the ability to capitalize on the value that the flexibility of storage brings CSP. This presentation summarizes a recent report that evaluates the potential impacts of simultaneously achieving the 2030 cost targets for PV and CSP-TES, and it includes a detailed evaluation of the role that CSP-TES could play in realizing those impacts. The scenarios in this analysis are designed to isolate and assess the potential impacts of achieving DOE's 2030 cost targets for CSP-TES and PV, and they do not reflect the potential benefits or system impacts associated with success in other DOE research programs. The low-cost solar scenarios include DOE's 2030 solar cost targets--which are represented via a roughly 50% reduction in LCOE by 2030 (from current levels) with additional cost reductions thereafter representing technology learning and/or improvements that could result from innovation - coupled with a variety of market, technology, and demand assumptions. With these assumptions, the evolution of the contiguous U.S. electricity system is evaluated with NREL's Renewable Energy Deployment System (ReEDS) model, which was specifically designed to represent the temporal and locational value of renewable generation technologies in the U.S. power system. ReEDS relies on system-wide least-cost optimization to estimate the type and location of future generation and transmission capacity. In addition, it accounts for the locational and temporal variations in variable renewable technologies, including the need for new transmission, curtailment, dynamic capacity value, and the need to hold operating reserves to account for the uncertainty and variability of these technologies. This presentation summarizes the key findings that arise from a detailed evaluation of the impacts of achieving DOE's 2030 cost targets for CSP-TES and PV systems, noting again the inherent challenges associated with modeling future scenarios of the large, complex system electricity system in the contiguous United States within the context of various market features.