Profitability analysis of solar thermal power plants projects : Methodology, examples, comparisons

Abstract
This paper presents an approach to simplify the assessment of the profitability of power plant related investments. First of all, classical cost analysis is presented and applied to a reference solar thermal power plant. Next, profitability analysis methodology is described, together with the simplified model which gives simple formulas to assess the profitability of the project. This analysis is based on the Profitability Index (PI) ratio of the project and the sensitivity analysis of this ratio versus the average capacity factor of the plant and the average selling price (ASP) of the delivered kWh. An example of such analysis is given for the reference solar power plant. The comparison of a profitability index of different projects is made for different power plants, including one based on a fossil fuel (coal) and four using renewable energy technologies (solar thermal, wind, hydro, photovoltaics). Lastly the profitability analysis is used to calculate the environmental bonus to attribute to energy produced by a solar thermal power plant in order to attain the same profitability index as that of a coal fired power plant. The result is 25 % higher than the bonus resulting from a simple cost evaluation.