Operating  costs

Costs are often used to determine a relative position between fossil fuel power plants and solar thermal power plants by example. Now lets be very careful here and clearly define costs as they are defined by the accounting profession and as acknowledged by accounting conventions both in Australian and internationally.

The fixed cost outlay for plant and equipment is rather self-explanatory. Both types of power plants have their respective planned capital costs associated with the building of each. A point in time is usually calculated by where the product sold in number will

represent a profit equal to the real fixed cost outlay (Breakeven point).It may take one(1) year or it may take ten(10) years to reach this breakeven point. Power plants reach it by selling electricity by the kW/hr, so the price and those variables that influence the sale price are crucial.

Variables that influence the operating costs are equally critical in determining the margin of profit per kW/hr of electricity sold to market. There are three (3) types of operating costs;

Ø                  Direct materials

Ø                  Direct labour

Ø                  Overheads

Considering both types of power plants as above, what are the direct materials?

The materials directly responsible for producing the end product. Electricity is the end product in both power plants of course, so lets start with the fossil fuel power plant and determine direct material costs. Coal required is a direct material in a coal-fired power plant. The direct materials associated with a solar thermal power plant in producing its electricity would be “sunshine”. Solar thermal power plants thus have a major advantage in the direct material cost area. Paraboloidal costs or costs per M² etcetera are capital outlay costs governed by risk on capital, and depreciation. In fact it is anticipated that soon after a change in government in year 2004,significant incentives will flow onto solar thermal plants.

Direct labor costs are all those costs associated with the personnel directly inked to the manufacturing/making of the product. These individuals are invariably plant operators, factory staff and alike. A fully automated state of the art solar thermal power station using paraboloids would reasonably be considered to have fewer staff than existing fossil fuel power plants. Labour costs are critical as the associated costs of labor like superannuation, leave loading, penalty rates, weekend loading rates and so on are very expensive. Superannuation by example has been growing steadily, and could go as high as 15% within a decade.

In comparing both power plants, should a large solar thermal plant gain an advantage of just five (5) fewer staff, and should each direct labor worker be paid reasonably high wages as per union agreement of say AUD$55,000 per annum, there would be a relative cost advantage of ~AUD$330,000.00 per annum over the fossil fuel power plant.

Sundry costs of operation apart from indirect labor, and indirect material costs, are called overhead costs. Plant water consumption or power consumption usually fall into this category. Any other smaller cost as well can be categorised as overheads. Maintenance costs can be deemed as overheads to simplify things here. Both plants have maintenance costs; the cleaning of mirrors in a power tower would be reasonably high by example. Equally under sever weather conditions (hail) if the tilt on mirrors was inadequate, there would be a mess the next day. These overhead costs are important, as solar thermal power stations need regular cleaning and maintenance.Fossil fuel power plants I would reasonably assume would have less overall maintenance costs than a solar thermal power plant. Here is where the fossil fuel power plant gains an “advantage” over solar thermal power plant in my opinion. If paraboloids could be engineered to be self-cleaning in the future, the overhead cost for such cleaning of a large solar thermal power plant would be reduced considerably.

Whilst a large solar thermal power station would take enormous efforts to get it built over time on time and under budget, the plant should contain smart engineering concepts so that running overhead costs are kept to a minimum. This would flow on from say planning to build 2000-3000 (ANU designed) big dishes for a future solar thermal plant, where such a large production run itself, must be designed to minimise construction costs. 

One can quickly assess the degree of required engineering for a large solar thermal power station. It would also require a team effort as there would be little room for major error considering it would most probably be Australia’s first large plant.

Solar thermal plants can be used as a preheater for fossil fuel power plants. Playing “second fiddle” to fossil fuel power plants is ideal for the carbon lobby. It is a good application for solar thermal power, but I would not recommend multiple similar applications. If solar thermal paraboloidal applications work well, then they can work just as well amongst 2000-3000 of their kind. The smaller trend must be broken during year 2005 in my opinion, and the only way to do this is to boldly design a 200-300 MW solar thermal/chemical power station.

3.2 Benefits:

Electricity as the imperative is subject to fossil fuel price fluctuations. As fossil fuels increase in price due to scarcity and market forces, the cost will impact on the price of electricity. Fossil fuels are no longer deemed as cheap as they are as well very nasty. Emitters have not incorporated the true cost impact on society for decades. Emitters have cost societies billions of dollars over time and  have caused many fatalities.

Solar thermal-chemical plants have the capacity to capture solar energy and store it in the form chemical energy. Such chemicals are kept and returned strategically for electricity generation say at night and or at peak times. The price based on the above variables indicate a constant more stable future electricity price. Over time many large solar thermal-chemical plants would give significant strength to a reliable electricity price, and reduce pollution dramatically.

A more carbon-constrained manufacturing sector is  very close (within a decade) ,and to delay now will cost more later. A rebirth of the solar concentrator systems is inevitable, in part due to national carbon trading schemes which give such plants large carbon credits. Other factors include as above electricity price stability.  Wind turbine electricity generation to my mind contains the risk of climate change. Climate change is exactly what it is and if the wind patterns change one is left with an "upside down boat graveyard". I am not meaning to be critical of wind turbine generation, but I have yet to see any risk evaluation due to climate change.

Feb 04