Stochastic Modeling of the Levelized Cost of Electricity for Solar PV
With the development of renewable energy, a key measure for reducing greenhouse gas emissions, interest in the levelized cost of electricity (LCOE) is increasing. Although the input variables used in the LCOE calculation, such as capacity factor, capital expenditure, annual power plant operations an...
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| Fformat: | Erthygl |
| Iaith: | English |
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MDPI AG
2020-06-01
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| Cyfres: | Energies |
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| Mynediad Ar-lein: | https://www.mdpi.com/1996-1073/13/11/3017 |
| _version_ | 1827715189551661056 |
|---|---|
| author | Chul-Yong Lee Jaekyun Ahn |
| author_facet | Chul-Yong Lee Jaekyun Ahn |
| author_sort | Chul-Yong Lee |
| collection | DOAJ |
| description | With the development of renewable energy, a key measure for reducing greenhouse gas emissions, interest in the levelized cost of electricity (LCOE) is increasing. Although the input variables used in the LCOE calculation, such as capacity factor, capital expenditure, annual power plant operations and maintenance cost, discount and interest rate, and economic life, vary according to region and project, most existing studies estimate the LCOE by using a deterministic methodology. In this study, the stochastic approach was used to estimate the LCOE for solar photovoltaic (PV) in South Korea. In addition, this study contributed to deriving realistic analysis results by securing the actual data generated in the solar PV project compared to the existing studies. The results indicate that the LCOE for commercial solar power ranged from KRW 115 (10 cents)/kWh to KRW 197.4 (18 cents)/kWh at a confidence level of 95%. The median was estimated at KRW 160.03 (15 cents)/kWh. The LCOE for residential solar power ranged from KRW 109.7 (10 cents)/kWh to KRW 194.1 (18 cents)/kWh at a 95% confidence level and a median value of KRW 160.03 (15 cents)/kWh. A sensitivity analysis shows that capital expenditure has the most significant impact on the LCOE for solar power, followed by the discount rate and corporate tax. This study proposes that policymakers implement energy policies to reduce solar PV hardware and soft costs. |
| first_indexed | 2024-03-10T19:13:56Z |
| format | Article |
| id | doaj.art-5123258f05d742f9bfd5098011d5d48c |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T19:13:56Z |
| publishDate | 2020-06-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-5123258f05d742f9bfd5098011d5d48c2023-11-20T03:34:02ZengMDPI AGEnergies1996-10732020-06-011311301710.3390/en13113017Stochastic Modeling of the Levelized Cost of Electricity for Solar PVChul-Yong Lee0Jaekyun Ahn1School of Business, Pusan National University, 2, Busandaehak-ro 63beon-gil, Geumjeong-gu, Busan 46241, KoreaKorea Energy Economics Institute, 405-11, Jongga-ro, Jung-Gu, Ulsan 44543, KoreaWith the development of renewable energy, a key measure for reducing greenhouse gas emissions, interest in the levelized cost of electricity (LCOE) is increasing. Although the input variables used in the LCOE calculation, such as capacity factor, capital expenditure, annual power plant operations and maintenance cost, discount and interest rate, and economic life, vary according to region and project, most existing studies estimate the LCOE by using a deterministic methodology. In this study, the stochastic approach was used to estimate the LCOE for solar photovoltaic (PV) in South Korea. In addition, this study contributed to deriving realistic analysis results by securing the actual data generated in the solar PV project compared to the existing studies. The results indicate that the LCOE for commercial solar power ranged from KRW 115 (10 cents)/kWh to KRW 197.4 (18 cents)/kWh at a confidence level of 95%. The median was estimated at KRW 160.03 (15 cents)/kWh. The LCOE for residential solar power ranged from KRW 109.7 (10 cents)/kWh to KRW 194.1 (18 cents)/kWh at a 95% confidence level and a median value of KRW 160.03 (15 cents)/kWh. A sensitivity analysis shows that capital expenditure has the most significant impact on the LCOE for solar power, followed by the discount rate and corporate tax. This study proposes that policymakers implement energy policies to reduce solar PV hardware and soft costs.https://www.mdpi.com/1996-1073/13/11/3017LCOEstochasticsolar PVSouth Korearenewable energy |
| spellingShingle | Chul-Yong Lee Jaekyun Ahn Stochastic Modeling of the Levelized Cost of Electricity for Solar PV Energies LCOE stochastic solar PV South Korea renewable energy |
| title | Stochastic Modeling of the Levelized Cost of Electricity for Solar PV |
| title_full | Stochastic Modeling of the Levelized Cost of Electricity for Solar PV |
| title_fullStr | Stochastic Modeling of the Levelized Cost of Electricity for Solar PV |
| title_full_unstemmed | Stochastic Modeling of the Levelized Cost of Electricity for Solar PV |
| title_short | Stochastic Modeling of the Levelized Cost of Electricity for Solar PV |
| title_sort | stochastic modeling of the levelized cost of electricity for solar pv |
| topic | LCOE stochastic solar PV South Korea renewable energy |
| url | https://www.mdpi.com/1996-1073/13/11/3017 |
| work_keys_str_mv | AT chulyonglee stochasticmodelingofthelevelizedcostofelectricityforsolarpv AT jaekyunahn stochasticmodelingofthelevelizedcostofelectricityforsolarpv |