9

Economic Analysis

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9. Economic Analysis

9.1 General Requirements

The main task of the Economic Analysis has been to elaborate the differences
in between the different investigated options. Therefore such analysis does
neither cover commercial tariff / off-take aspects nor the impact of the
individual options on the general ADWEA Generation and System
Expansion Planning.

Following general parameter have been used for the economic analysis:

Discount rate (real, on top of inflation): 8%

Exchange rate: 1 AED = 0.2723 US$
Operating time: 25 a
Construction period: 3a
Fuel price natural gas: 6.63 AED/MBTU based on 2007
Fuel price LFO: 14.7 US$/GJ
Escalation fuel price: 1.34%/a
Escalation OPEX: 3%/a
Potable water costs: 14.16 AED/1,000 gallons

Use of LFO instead of natural gas could be required, due to shortage of gas
supply in future. The thermal energy and power supplied to the desalination
plant has been considered. All costs are referred to first year of operation
(2010), based on given escalation rate. The technical key data of each option
are summarized in following table.

Summary Technical Data ISCC (75/90 Load) Solar Rankine Cycle

V1a V1b V2a V2b V3a V3b V4a V4b
ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
Site Location Al Mirfa Madinat Zayed
Latitude deg 24.1 23.6
Longitude deg -53.4 -53.7
Solar Irradiation (DNI) kWh/m2/a 2157 2190
Ambient Temperature (min; avg; max) C 11; 28; 46 11; 28; 46
Number of collector assemblies 960 628 960 628 960 628 960 628
Net aperture area for one collector m2 818 818 818 818 818 818 818 818
Total net aperture area of solar collectors 1000m2 785 513 785 513 785 513 785 513
Capacity of Thermal Storage MWh 300 300 300 300
Solar Heat to Power Block GWh/a (th) 778 513 778 513 791 523 791 523
Gas turbine capacity (at ISO) MWe 2 x 155 2 x 155 2 x 155 2 x 155 2 x 155
Gas turbine capacity (at average site temperature) MWe 2 x 145 2 x 145 2 x 145 2 x 145 2 x 145
Steam turbine capacity (max temp, max solar heat) solar MWe 250 250 215 215 138 108 110 158 158
Net capacity (46C, max solar heat) MWe 467 467 502 502 402 87 89 132 128
Net Electric Energy of Plant GWhe/a 3424 3424 3220 3128 2948 260 171 367 231
Electricity to MSF 145.4 GWhe/a 145 145 145 145 145
Evaluated Net Electric Energy GWhe/a 3569 3569 3366 3273 3093 260 171 367 231
Exergetic Fossil Generation (GWh/a) GWhe/a 3371 3469 3089 3095 3093 120 70
Exergetic Solar Generation (GWh/a) GWhe/a 198 101 277 178 260 171 248 161
Annual gas consumption GWh/a-LCV 6483 6679 5916 5928 5925 0 0 240 140
Ratio electric to fossil fuel 55% 53% 57% 55% 52% n.a n.a. 153% 165%
Exergetic Solar Share 5.6% 2.8% 8.2% 5.4% 100% 100% 66% 68%
Specific CO2 emission of comparable generation 0.42 kgCO2/kWhe 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42
Annual CO2 emission reduction kt/CO2/a 83 42 116 75 109 72 104 68
Total CO2 emission reduction in years 25 mln t/CO2 2.1 1.1 2.9 1.9 2.7 1.8 2.6 1.7

Table 9-1: Technical Key Data of Options

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9.2 Investigation of CAPEX

For the CAPEX estimation the actual situation of the market (including
current bids) has been considered. The current market shows that higher
costs for mechanical equipment have to be considered, especially for gas
turbines. Also costs for the solar part have increased considerably during last
months as experienced in recent offers.

The corresponding cost estimates of CAPEX are shown in following tables.

Cost Estimate CAPEX (EPC Contract) ISCC/CC Solar Rankine Cycle

V1a V1b V2a V2b V3a V3b V4a V4b
ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
Civil and Structural mln $ 25 21 26 22 13 16 12 17 13
Solar field preparation and other solar field civil work 5 3 5 3 5 3 5 3
Solar collector pylon foundations 7 5 7 5 7 5 7 5
General civil and infrastructure and
Power Block and BOP structures 14 14 14 14 13 4 4 6 6

Solar Field mln $ 251 171 251 171 251 171 251 171
Heat collection elements (HCE) 40 27 40 27 40 27 40 27
Reflectors 55 38 55 38 55 38 55 38
Metal support structures 78 53 78 53 78 53 78 53
Drives, electronic and controls 9 6 9 6 9 6 9 6
HTF interconnecting piping ( between collectors) 6 4 6 4 6 4 6 4
HTF header piping 8 6 8 6 8 6 8 6
HTF fluid (initial filling) 10 7 10 7 10 7 10 7
Transport, erection and commissioning 45 30 45 30 45 30 45 30
Thermal Storage System mln $ 22 22 22 22
Storage Device incl pumping, transport and commissioning 22 22 22 22
HTF System incl. Solar Heat Exchangers mln $ 35 24 35 24 35 24 35 24
HTF heat exchangers and tanks 19 13 19 13 19 13 19 13
HTF pumps 10 7 10 7 10 7 10 7
Transport, erection and commissioning 6 4 6 4 6 4 6 4
Power Block mln $ 210 210 221 221 200 46 46 61 61
Gas turbine generators 85 85 85 85 85
Steam turbine generators 18 18 20 20 15 14 14 19 19
Cooling System incl. Condenser 10 10 10 10 9 15 15 19 19
HRSG incl. burners 37 37 45 45 32
Fuel gas system inkl. back up 6 6 6 6 8 2 2
BOP 13 13 13 13 12 4 4 4 4
Waste water treatment 0 0 0 0 0 0 0 0 0
Fire protection 2 2 2 2 2 2 2 2 2
Electrical + I&C 25 25 27 27 24 7 7 10 10
Transport, Erection & commissioning 14 14 14 14 14 4 4 5 5
Total Equipment Cost mln $ 544 427 555 439 213 370 253 386 270

Table 9-2: CAPEX Estimation (Details)

Cost Estimate CAPEX (Summary) ISCC (75/90 Load) Solar Rankine Cycle
V1a V1b V2a V2b V3a V3b V4a V4b
ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
Civil and Structural mln $ 25 21 26 22 13 16 12 17 13
Solar Field mln $ 251 171 251 171 251 171 251 171
Thermal Storage System mln $ 22 22 22 22
HTF System incl. Solar Heat Exchangers mln $ 35 24 35 24 35 24 35 24
Power Block mln $ 210 210 221 221 200 46 46 61 61

Total Equipment Cost mln $ 544 427 555 439 213 370 253 386 270
incl. Freight, insurance, transport, erection, testing and
commissioning
Contractor's (Interface) Engineering 5% 27 21 28 22 11 19 13 19 13
Contingencies (incl. physical and price) 5% 29 22 29 23 11 19 13 20 14
Other additions to Cost estimate 0% 0 0 0 0 0 0 0 0 0
EPC-contract mln $ 599 470 612 483 235 408 279 426 297
Owners Cost (Incl. Site Preparation, Consulting
Service during Implementation) 5% mln $ 30 24 31 24 12 20 14 21 15
Investment (Total Installed Cost) mln $ 629 494 643 508 246 429 293 447 312

Table 9-3: CAPEX Estimation (Summary)

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 In comparison to the reference combined cycle power plant, following
additional investment for an ISCC has to be noted:
without storage 247 to 261 Mil. US$
with storage 383 to 397 Mil. US$

9.3 Investigation of OPEX

The opex estimation has been based on actual values for solar field cost for
O&M as well as typical values for the fossil part of the power plant.

Cost Estimate OPEX ISCC (75/90 Load) Solar Rankine Cycle

V1a V1b V2a V2b V3a V3b V4a V4b
ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
Fixed O&M Cost (incl. Insurance) mln$/a 9.0 7.6 9.2 7.8 4.3 5.5 4.1 5.8 4.4
Fixed Cost Power Plant 2.0% mln$/a 4.5 4.5 4.7 4.7 4.3 1.0 1.0 1.3 1.3
Fixed Cost Solar Field 1.8% mln$/a 4.5 3.1 4.5 3.1 4.5 3.1 4.5 3.1
Variable Cost 2.5 $/MWh 2.5 2.5 2.5 2.5 2.5 0.5 0.5 0.5 0.5
Net Electricity Output GWh/a 3569 3569 3366 3273 3093 260 171 367 231
O&M Cost (excl. fuel) m$/a 17.9 16.5 17.6 16.0 12.0 5.7 4.2 6.0 4.5
Total O&M Cost in % of EPC Contract % 3.0% 3.5% 2.9% 3.3% 5.1% 1.4% 1.5% 1.4% 1.5%
Variable and fixed cost expressed per kWhCost $/MWh 5.02 4.62 5.24 4.88 3.88 21.71 24.41 16.41 19.58

Table 9-4: OPEX Estimation

9.4 Analysis for avoided CO2

The amount of avoided CO2 emission per kWh of solar generated electricity
has been taken as 0.42 kg CO2/kWh2 based on power plant structure of the
region (95% natural gas fired).

For comparison, the CO2 emissions of modern power plants vary typically
between 0.4 kg CO2/kWh for natural gas fired combined cycle power plants
and 0.85 kg CO2/kWh for coal fired steam power plants as shown in table
below.

CO2 emission Efficiency of CO2 emission based

based on LCV of Plant on net generation
fuel
(g/kWh) % (g/kWh)
Natural gas fired 200 50% 400
combined cycle power
plant
Heavy fuel oil fired steam 278 40% 695
power plant
Coal fired steam power 340 40% 850
plant
Table 9-5: CO2 emissions of typical fossil fired power plants

2 see report prepared for World Bank: Ris-R-1380(EN), Wind Power Projects in the
CDM: Methodologies and Tools for Baselines, Carbon Financing and Sustainability
Analysis, Ris National Laboratory, Roskilde, Denmark, December 2002, by Lasse
Ringius, Poul Erik Grohnheit, Lars Henrik Nielsen, Anton-Louis Olivier, Jyoti Painuly,
and Arturo Villavicencio
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9.5 Calculation of Generation Costs

The calculation has been performed for different operation modes of the
ISCC in accordance to the performance analysis:

ISCC operation mode (base) with 75/90% load

ISCC operation mode which follows the load curve of the grid
(minimum load limited to 75% due to technical reason).

This will analyze the advantage to follow the peak of the grid which is
basically in accordance to the solar irradiation.

The Solar power plant with rankine cycle have been evaluated for different
options in accordance to the performance analysis. Variation of operation
modes are not possible, due to the nature of the system, which follows the
solar irradiation in any case.

9.5.1 ISCC base operation load 75/90% and RCS

The following tables and figures show the results of calculation of generation
costs (LEC), also divided into levelized fossil and solar generation cost.

Generation Cost ISCC (75/90 Load) Solar Rankine Cycle

V1a V1b V2a V2b V3a V3b V4a V4b
ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
Investment Cost mln $ 629 494 643 508 246 429 293 447 312
Electricity to the grid GWh/a 3569 3569 3366 3273 3093 260 171 367 231
Exergetic Solar Share 5.6% 2.8% 8.2% 5.4% 100.0% 100.0% 65.9% 68.4%
Exergetic solar generation GWh/a 198 101 277 178 260 171 242 158
Exergetic fossil generation GWh/a 3371 3469 3089 3095 3093 125 73
Fuel consumption (in LCV) GWh/a 6483 6679 5916 5928 5925 0 0 240 140
Fuel Cost per unit LCV 6.9 AED/MBTU 6.9 6.9 6.9 6.9 6.9 6.9 6.9 6.9 6.9
(in base year, contract signature)
Exchange rate 0.27 AED/$ 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27
Discount rate (real, on top of inflation) 8.0% %/a 8% 8% 8% 8% 8% 8% 8% 8% 8%
Escalation for fuel (on top of inflation) 1.34% %/a 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%
Escalation for O&M (on top of inflation) 3.0% %/a 3% 3% 3% 3% 3% 3% 3% 3% 3%
Escalation for consumables (on top of inflation) 1.0% %/a 1% 1% 1% 1% 1% 1% 1% 1% 1%
Project Life Time (after start of operation) 25 years 25 25 25 25 25 25 25 25 25

Levelized Electricity Generation Cost (LEC)

Capital cost $ / MWh 17 13 18 15 7 154 161 114 126
Fuel cost $ / MWh 13 14 13 13 14 0 0 5 4
O&M cost $ / MWh 7 6 7 7 5 29 33 22 26
Cost of Consumables $ / MWh 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Levelized Generation Cost (LEC) $ / MWh 37 33 38 34 27 183 193 141 157

LEC of solar generation

Capital cost $ / MWh 171 202 134 138 154 161 169 181
Fuel cost $ / MWh 1.0 2.6 0.0 0.0 0.0 0.0
O&M cost $ / MWh 33 40 27 30 29 33 31 36
Cost of Consumables $ / MWh 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Levelized Solar Generation Cost (LEC) $ / MWh 204 245 162 168 183 193 200 217

Table 9-6: Results of Levelized Generation costs (Details)

Following figures give an example for the segregation of generation costs.

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 300

250
Solar Generation

200

S/MWh
150

100

50

0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Generation (GWh/a)

Fuel O&M Capital

Fossil Generation 3371 GWh/a at 27 $/MWh

Solar Generation 198 GWh/a at 204 $/MWh
Total Generation 3569 GWh/a at 37 $/MWh

Figure 9-1: Segregation of generation costs for option V1a

250

Solar Generation

200

150
S/MWh

100

50

0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Fuel O&M Capital

Generation (GWh/a)

Fossil Generation 73 GWh/a at 27 $/MWh

Solar Generation 158 GWh/a at 217 $/MWh
Total Generation 231 GWh/a at 157 $/MWh

Figure 9-2: Segregation of generation costs for option V4b

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Generation Cost Summary ISCC (75/90 Load) Solar Rankine Cycle
V1a V1b V2a V2b V3a V3b V4a V4b
ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
Total Generation GWh/a 3569 3569 3366 3273 3093 260 171 367 231
at generation Cost (LEC) of $ / MWh 37 33 38 34 27 183 193 141 157

Solar Generation GWh/a 198 101 277 178 260 171 242 158
at solar generation Cost (LEC) of $ / MWh 204 245 162 168 183 193 200 217
% 5.6% 2.8% 8.2% 5.4% 100% 100% 66% 68%

Fossil Generation GWh/a 3371 3469 3089 3095 3093 125 73

at fossil generation Cost (LEC) of $ / MWh 27 27 27 27 27 27 27
% 94% 97% 92% 95% 100% 34% 32%
Difference in LEC between ISCC and Ref-CC $ / MWh 10 6 11 8 157 167 114 130
Incremental annual cost mln$ 35 22 37 25 41 29 42 30
Net Present Value of incremental cost mln$ 376 235 399 267 436 304 448 322
Incremental Cost (at time of Investment) mln $ 376 235 399 267 436 304 448 322
Total CO2 emmission reduction (life of project) mln t/CO2 2.1 1.1 2.9 1.9 2.7 1.8 2.6 1.7
Specific incremental cost for CO2 reduction $/tCO2 181 222 137 143 159 170 172 190

Table 9-7: Results of Levelized Generation costs and Incremental costs (Summary)

Based on a natural gas price of 6.9 AED/MBTU in the first year of operation
(2010), the generation costs of the Reference Plant will be 27 US$/MWh.
The lowest total LEC of ISCC will have option V1b (33 US$/MWh), with
the lowest solar share of 2.8%. The lowest LEC referred to Solar generation
only has option V2a (162 US$/MWh) with the highest solar share of 8.2%.

Due to the low fuel price, the incremental costs are very high. The sensitivity
analysis will show their impact to the fuel price.

9.5.2 Sensitivity Analysis (ISCC base operation mode)

The sensitivity analysis has been done for following parameters:

Discount rate: 5%, 10% (base 8%)
CAPEX: -15%, + 15%
Fuel price: max. 85 AED/MBTU
Solar heat from solar field: +10/-10%

The results are shown in following tables and figures.

Sensitivity analysis for generation cost ISCC (75/90 Load) Solar Rankine Cycle
V1a V1b V2a V2b V3a V3b V4a V4b
Sensitivity of LEC ($/MWh) ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
$ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh

Price of Fuel year 2010 (AED/MBTU) 6.9 Base gas 37 33 38 34 27 183 193 141 157
6.9 Base gas 37 33 38 34 27 183 193 141 157
20 62 59 62 59 53 183 193 150 165
40 100 98 99 98 94 183 193 164 178
LFO = 14.7 $/GJ = 51,2 AED/MBTU (2007)=53.29 (2010) 53 Base LFO 126 125 124 123 121 183 193 173 187
85 High LFO 186 187 183 184 184 183 193 195 207
Deviation in cost estimate 0% 37 33 38 34 27 183 193 141 157
0% Base 37 33 38 34 27 183 193 141 157
15% 39 35 41 37 28 207 218 158 176
-15% 34 31 35 32 26 160 169 124 138
Discount Rate (real, on top of inflation) 8% 37 33 38 34 27 183 193 141 157
8% Base 37 33 38 34 27 183 193 141 157
5% 33 30 34 31 25 147 156 114 128
10% 39 35 41 37 28 210 221 160 179
Deviation in Solar Generation 37 33 38 34 27 183 193 141 157
0% Base 37 33 38 34 27 183 193 141 157
10% 36 33 38 34 27 167 176 132 147
-10% 37 33 38 35 27 204 215 151 169

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Table 9-8: Results of Sensitivity Analysis (LEC)

Sensitivity analysis for solar generation cost ISCC (75/90 Load) Solar Rankine Cycle
V1a V1b V2a V2b V3a V3b V4a V4b
Sensitivity of Solar LEC ($/MWh) ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
$ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh
Price of Fuel year 2010 (AED/MBTU) 6.9 Base gas 204 245 162 168 183 193 200 217
6.9 Base gas 204 245 162 168 183 193 200 217
20 204 245 162 168 183 193 200 217
40 204 245 162 168 183 193 200 217
LFO = 14.7 $/GJ = 51,2 AED/MBTU (2007)=53.29 (2010) 53 Base LFO 204 245 162 168 183 193 200 217
85 High LFO 204 245 162 168 183 193 200 217
Deviation in cost estimate 0% 204 245 162 168 183 193 200 217
0% Base 204 245 162 168 183 193 200 217
15% 230 275 182 188 207 218 225 245
-15% 179 215 142 147 160 169 175 190
Discount Rate (real, on top of inflation) 8% 204 245 162 168 183 193 200 217
8% Base 204 245 162 168 183 193 200 217
5% 164 198 130 136 147 156 160 175
10% 234 279 185 191 210 221 229 248
Deviation in Solar Generation 204 245 162 168 183 193 200 217
0% Base 204 245 162 168 183 193 200 217
10% 186 223 147 153 167 176 181 197
-10% 227 272 179 186 204 215 223 242

Table 9-9: Results of Sensitivity Analysis (Solar LEC)

Sensitivity analysis for incremental cost ISCC (75/90 Load) Solar Rankine Cycle
V1a V1b V2a V2b V3a V3b V4a V4b
Sensitivity of Incremental Cost (M$) ISCC ISCC ISCC ISCC Ref-CC RC RC RC RC
M$ M$ M$ M$ M$ M$ M$ M$

Price of Fuel year 2010 (AED/MBTU) 6.9 Base gas 376 235 399 267 436 304 448 322
6.9 Base gas 376 235 399 267 436 304 448 322
20 324 212 321 217 362 256 380 277
40 244 176 202 141 250 182 275 209
LFO = 14.7 $/GJ = 51,2 AED/MBTU (2007)=53.29 (2010) 53 Base LFO 191 152 122 89 175 133 205 163
85 High LFO 65 96 -67 -32 -3 16 40 56

Table 9-10: Results of Sensitivity Analysis (Incremental cost)

250

200

150
LEC US$/MWh

100

V1a V1b V2a V2b Ref-CC

V3a V3b V4a V4b

50

0
5% 6% 7% 8% 9% 10%
Discount rate

Figure 9-3: Sensitivity Discount Rate

The sensitivity of the discount rate shows a higher impact of RSC plants, due
to their specifically higher CAPEX component.

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 250

200

150
LEC US$/MWh

100

V1a V1b V2a V2b Ref-CC

V3a V3b V4a V4b

50

0
85% 90% 95% 100% 105% 110% 115%
CAPEX deviation

Figure 9-4: Sensitivity CAPEX

250

200

150
LEC US$/MWh

100

V1a V1b V2a V2b Ref-CC

50
V3a V3b V4a V4b

0
0 10 20 30 40 50 60 70 80 90
Fuel Price AED/MBTU

Figure 9-5: Sensitivity Fuel Price

The sensitivity shows that a fuel price of 72 AED/MBTU will be required to

set the incremental cost to zero. The economic operation will be reached for
Option V2a at this fuel price. All other options need a higher fuel price.

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 500

450
V1a V1b V2a V2b
400 V3a V3b V4a V4b

350
Incremental Cost Mln US$

300

250

200

150

100

50

0
0 10 20 30 40 50 60 70 80 90
Fuel Price AED/MBTU

Figure 9-6: Sensitivity Fuel Price/Incremental cost

Options V2a/b show the biggest potential to convert the solar thermal energy
most appropriate. In any case, Option V1b shows at the current fuel price
the best LEC (33 US$/MWh) and lowest incremental cost (235 Mil. US$).

At a fuel price of LFO level, the incremental cost will be decreased to 152
Mil. US$ for option V1b, but option V2b will get a better LEC and lower
incremental cost (89 Mil. US$). Option V2a will be the most appropriate
option, if the fuel price will be higher than LFO-level.

This shows the potential for further optimization of option V2a to get the
lowest incremental costs at same solar share, calculated for option V1b.

The options V2a/b (ISCC Solar plus) are recommended. It has the lowest
generation cost for the solar generated electricity (162-168 $/MWh) among
all variants considered.

It generates 277 GWh/a (with storage) respectively 178 GWh/a (without

storage) of solar electricity (when comparing the total generation to that of a
standard fossil only combined cycle power plant using the same amount of
fuel). Thereby it avoids 75.000 to 116.000 tons (of CO2 emissions every
year, amounting to 1.9 to 2.9 million tons for the 25 years technical life span.

The incremental cost works out at 399 M$ for option V2a. It is larger than
the option V2b (ISCC Solar plus without storage, 267 M$). However this
variant with thermal storage has also a larger solar field and it generates
more solar electricity than the other variants. It permits longer hours at
design solar heat and thereby the solar generation can contribute with a
larger probability to the peak power requirements.

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 When comparing with higher fuel prices, the incremental costs will decrease.
In case of LFO with a fuel price of 53.29 AED/MBTU, the incremental cost
would decrease to 89-122 M$. At 72 AED/MBTU, the incremental cost
would decrease to zero.

9.5.3 ISCC operation mode (2005 load profile)

The following tables and figures show the results of calculation of different
operation modes of the ISCC.

Generation Cost ISCC (75/90 Load) ISCC (2005 Load Profile)

V1a V1b V2a V2b V1a V1b V2a V2b
ISCC ISCC ISCC ISCC Ref-CC ISCC ISCC ISCC ISCC Ref-CC
Investment Cost mln $ 629 494 643 508 246 629 494 643 508 246
Electricity to the grid GWh/a 3569 3569 3366 3273 3093 3367 3367 3191 3098 2919
Exergetic Solar Share 5.6% 2.8% 8.2% 5.4% 6.2% 3.3% 9.0% 6.1%
Exergetic solar generation GWh/a 198 101 277 178 208 112 288 189
Exergetic fossil generation GWh/a 3371 3469 3089 3095 3093 3159 3255 2903 2910 2919
Fuel consumption (in LCV) GWh/a 6483 6679 5916 5928 5925 6065 6258 5549 5562 5581
Fuel Cost per unit LCV 6.9 AED/MBTU 6.9 6.9 6.9 6.9 6.9 6.9 6.9 6.9 6.9 6.9
(in base year, contract signature)
Exchange rate 0.27 AED/$ 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27
Discount rate (real, on top of inflation) 8.0% %/a 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%
Escalation for fuel (on top of inflation) 1.34% %/a 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%
Escalation for O&M (on top of inflation) 3.0% %/a 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%
Escalation for consumables (on top of inflation) 1.0% %/a 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
Project Life Time (after start of operation) 25 years 25 25 25 25 25 25 25 25 25 25

Levelized Electricity Generation Cost (LEC)

Capital cost $ / MWh 17 13 18 15 7 18 14 19 15 8
Fuel cost $ / MWh 13 14 13 13 14 13 14 13 13 14
O&M cost $ / MWh 7 6 7 7 5 7 6 7 7 5
Cost of Consumables $ / MWh 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Levelized Generation Cost (LEC) $ / MWh 37 33 38 34 27 38 34 39 35 27
LEC of solar generation
Capital cost $ / MWh 171 202 134 138 163 183 130 130
Fuel cost $ / MWh 1.0 2.6 0.0 0.0 0.8 2.2 0.0 0.0
O&M cost $ / MWh 33 40 27 30 32 37 27 29
Cost of Consumables $ / MWh 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Levelized Solar Generation Cost (LEC) $ / MWh 204 245 162 168 196 222 156 159

Table 9-11: Results of Levelized Generation costs (Details)

Generation Cost Summary ISCC (75/90 Load) ISCC (2005 Load Profile)
V1a V1b V2a V2b V1a V1b V2a V2b
ISCC ISCC ISCC ISCC Ref-CC ISCC ISCC ISCC ISCC Ref-CC
Total Generation GWh/a 3569 3569 3366 3273 3093 3367 3367 3191 3098 2919
at generation Cost (LEC) of $ / MWh 37 33 38 34 27 38 34 39 35 27

Solar Generation GWh/a 198 101 277 178 208 112 288 189
at solar generation Cost (LEC) of $ / MWh 204 245 162 168 196 222 156 159
% 5.6% 2.8% 8.2% 5.4% 6.2% 3.3% 9.0% 6.1%

Fossil Generation GWh/a 3371 3469 3089 3095 3093 3159 3255 2903 2910 2919
at fossil generation Cost (LEC) of $ / MWh 27 27 27 27 27 27 27 27 27 27
% 94% 97% 92% 95% 100% 94% 97% 91% 94% 100%
Difference in LEC between ISCC and Ref-CC $ / MWh 10 6 11 8 10 6 12 8
Incremental annual cost mln$ 35 22 37 25 35 22 37 25
Net Present Value of incremental cost mln$ 376 235 399 267 374 233 396 265
Incremental Cost (at time of Investment) mln $ 376 235 399 267 374 233 396 265
Total CO2 emmission reduction (life of project) mln t/CO2 2.1 1.1 2.9 1.9 2.2 1.2 3.0 2.0
Specific incremental cost for CO2 reduction $/tCO2 181 222 137 143 172 198 131 134

Table 9-12: Results of Levelized Generation costs and Incremental costs (Summary)

The results show slightly higher levelized generation costs for the power
plants operated in accordance to the load profile of the year 2005, due to
lower total power generation.
The LEC of solar generation are lower for the operation mode 2005 load
profile, due to higher solar share. This will lead to lower incremental cost,

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 due to the better performance in comparison to the REF-CC, which will also
operated in the same mode.

9.5.4 Sensitivity Analysis (ISCC 2005 load profile)

The results are shown in following tables and figures.

Sensitivity analysis for generation cost ISCC (75/90 Load) ISCC (2005 Load Profile)
V1a V1b V2a V2b V1a V1b V2a V2b
Sensitivity of LEC ($/MWh) ISCC ISCC ISCC ISCC Ref-CC ISCC ISCC ISCC ISCC Ref-CC
$ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh
Price of Fuel year 2010 (AED/MBTU) 6.9 Base gas 37 33 38 34 27 38 34 39 35 27
6.9 Base gas 37 33 38 34 27 38 34 39 35 27
20 62 59 62 59 53 63 59 63 60 54
40 100 98 99 98 94 101 99 100 98 94
LFO = 14.7 $/GJ = 51,2 AED/MBTU (2007)=53.29 (2010) 53 Base LFO 126 125 124 123 121 126 125 124 123 121
85 High LFO 186 187 183 184 184 186 187 182 183 185
Deviation in cost estimate 0% 37 33 38 34 27 38 34 39 35 27
0% Base 37 33 38 34 27 38 34 39 35 27
15% 39 35 41 37 28 40 36 42 38 28
-15% 34 31 35 32 26 35 32 36 33 26
Discount Rate (real, on top of inflation) 8% 37 33 38 34 27 38 34 39 35 27
8% Base 37 33 38 34 27 38 34 39 35 27
5% 33 30 34 31 25 34 31 35 32 26
10% 39 35 41 37 28 40 36 42 38 28
Deviation in Solar Generation 37 33 38 34 27 38 34 39 35 27
0% Base 37 33 38 34 27 38 34 39 35 27
10% 36 33 38 34 27 37 34 39 35 27
-10% 37 33 38 35 27 38 34 39 35 27

Sensitivity analysis for solar generation cost ISCC (75/90 Load) ISCC (2005 Load Profile)
V1a V1b V2a V2b V1a V1b V2a V2b
Sensitivity of Solar LEC ($/MWh) ISCC ISCC ISCC ISCC Ref-CC ISCC ISCC ISCC ISCC Ref-CC
$ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh $ / MWh
Price of Fuel year 2010 (AED/MBTU) 6.9 Base gas 204 245 162 168 196 222 156 159
6.9 Base gas 204 245 162 168 196 222 156 159
20 204 245 162 168 196 222 156 159
40 204 245 162 168 196 222 156 159
LFO = 14.7 $/GJ = 51,2 AED/MBTU (2007)=53.29 (2010) 53 Base LFO 204 245 162 168 196 222 156 159
85 High LFO 204 245 162 168 196 222 156 159
Deviation in cost estimate 0% 204 245 162 168 196 222 156 159
0% Base 204 245 162 168 196 222 156 159
15% 230 275 182 188 221 250 176 178
-15% 179 215 142 147 171 195 137 139
Discount Rate (real, on top of inflation) 8% 204 245 162 168 196 222 156 159
8% Base 204 245 162 168 196 222 156 159
5% 164 198 130 136 158 180 126 128
10% 234 279 185 191 224 254 178 181
Deviation in Solar Generation 204 245 162 168 196 222 156 159
0% Base 204 245 162 168 196 222 156 159
10% 186 223 147 153 178 203 142 145
-10% 227 272 179 186 217 247 173 176

Sensitivity analysis for incremental cost ISCC (75/90 Load) ISCC (2005 Load Profile)
V1a V1b V2a V2b V1a V1b V2a V2b
Sensitivity of Incremental Cost (M$) ISCC ISCC ISCC ISCC Ref-CC ISCC ISCC ISCC ISCC Ref-CC
M$ M$ M$ M$ M$ M$ M$ M$
Price of Fuel year 2010 (AED/MBTU) 6.9 Base gas 376 235 399 267 374 233 396 265
6.9 Base gas 376 235 399 267 374 233 396 265
20 324 212 321 217 319 207 315 211
40 244 176 202 141 235 166 191 130
LFO = 14.7 $/GJ = 51,2 AED/MBTU (2007)=53.29 (2010) 53 Base LFO 191 152 122 89 179 139 107 75
85 High LFO 65 96 -67 -32 46 75 -89 -53

Table 9-13: Results of Sensitivity Analysis

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9.6 Conclusion and recommendation

By integrating a Solar Island into a Combined Cycle power plant at the site
of Al Mirfa (variants V2) it is possible to increase the amount of solar
generated electricity (kWh) by about 10% as compared to the amount of
solar generated electricity that can be produced by a Rankine Cycle plants in
Madinat Zayed (variants V3 or V4) with the same size of solar field and
thermal storage.

The integration will also save capital and O&M cost, as major components
can be shared and benefit from the economics of scale.

The solar generation costs (in $/MWh) of the ISCC variants at the site of Al
Mirfa are about some 15% - 20% below the solar generation costs of the
Rankine cycle variants at the site of Madinat Zayed.

If thermal storage is used then it is also necessary to increase the size of the
solar collector area. Thereby more solar electricity can be generated and the
specific solar generation cost (in $/MWh) will decrease. A further benefit is
the added operational flexibility and improved correlation of load and solar
generation. However due to the larger size and production the absolute
value of the incremental cost will increase.

The variant V2 (ISCC Solar plus at Al Mirfa) is recommended. The key data
for the ISCC variant V2 are shown in following table.

Operation mode 75/90 2005

% load load
profile
Net electric power (with max. solar heat): MW 502
Net electric power (without solar heat): MW 402
2
Solar collector area: m 510,000
Thermal Storage: MWh 0
Fossil generated electricity: GWh/a 3,095 2,910
Solar generated electricity: GWh/a 178 189
Solar share: % 5.4% 6.1 %
Investment Cost: Mln US $ 508
Generation cost (overall): US$/MWh 34 35
Fossil generation cost: US$/MWh 27 27
Solar generation cost: US$/MWh 168 159
Incremental Cost (against gas): Mln US$ 267 265
Incremental Cost (against LFO): Mln US$ 89 75
CO2 emission saving tons/a 75,000 79,000

In the conceptual design phase a further optimization of the different main

parameters should be done (size of solar field, size of storage and size of
steam turbine).
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