IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v148y2018icp235-246.html
   My bibliography  Save this article

The levelized costs of electricity generation by the CDM power projects

Author

Listed:
  • Rahman, Shaikh M.
  • Spalding-Fecher, Randall
  • Haites, Erik
  • Kirkman, Grant A.

Abstract

This paper examines the costs of electricity generation by the power projects under the Clean Development Mechanism (CDM) of the Kyoto Protocol. Using the CDM project-specific data, the levelized cost of electricity (LCOE) for each project is calculated. Based on the calculated LCOEs, an electricity cost function is estimated and the average cost curves for different renewable technologies, project locations, and time are derived. The results show that LCOE decreases, at a decreasing rate, with the scale and duration of the projects while the degree of economies of scale and time significantly vary across different technologies and locations. Results further show that the distribution of power projects in the CDM energy portfolio or a given location does not quite follow the relative cost structure for different technologies. Also, the distribution of different types of projects across different regions or host countries does not strictly follow the relative average costs for different locations. As the power projects under the CDM earn additional revenues from the sales of Certified Emissions Reduction credits (CERs), the CDM enables renewable electricity to be more competitive which crucially depends on CER prices, costs of CER issuance, and the length of crediting period.

Suggested Citation

  • Rahman, Shaikh M. & Spalding-Fecher, Randall & Haites, Erik & Kirkman, Grant A., 2018. "The levelized costs of electricity generation by the CDM power projects," Energy, Elsevier, vol. 148(C), pages 235-246.
    • Handle: RePEc:eee:energy:v:148:y:2018:i:c:p:235-246
    DOI: 10.1016/j.energy.2018.01.144
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544218301725
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2018.01.144?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhao, Zhen-Yu & Li, Zhi-Wei & Xia, Bo, 2014. "The impact of the CDM (clean development mechanism) on the cost price of wind power electricity: A China study," Energy, Elsevier, vol. 69(C), pages 179-185.
    2. Larson, Donald F. & Ambrosi, Philippe & Dinar, Ariel & Rahman, Shaikh Mahfuzur & Entler, Rebecca, 2008. "A Review of Carbon Market Policies and Research," International Review of Environmental and Resource Economics, now publishers, vol. 2(3), pages 177-236, November.
    3. Larsson, Simon & Fantazzini, Dean & Davidsson, Simon & Kullander, Sven & Höök, Mikael, 2014. "Reviewing electricity production cost assessments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 170-183.
    4. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    5. Michaelowa, Axel & Jotzo, Frank, 2005. "Transaction costs, institutional rigidities and the size of the clean development mechanism," Energy Policy, Elsevier, vol. 33(4), pages 511-523, March.
    6. Sims, Ralph E. H. & Rogner, Hans-Holger & Gregory, Ken, 2003. "Carbon emission and mitigation cost comparisons between fossil fuel, nuclear and renewable energy resources for electricity generation," Energy Policy, Elsevier, vol. 31(13), pages 1315-1326, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Santa Catarina, Artur, 2022. "Wind power generation in Brazil: An overview about investment and scale analysis in 758 projects using the Levelized Cost of Energy," Energy Policy, Elsevier, vol. 164(C).
    2. Epari Ritesh Patro & Teegala Srinivasa Kishore & Ali Torabi Haghighi, 2022. "Levelized Cost of Electricity Generation by Small Hydropower Projects under Clean Development Mechanism in India," Energies, MDPI, vol. 15(4), pages 1-16, February.
    3. Shen, Wei & Chen, Xi & Qiu, Jing & Hayward, Jennifier A & Sayeef, Saad & Osman, Peter & Meng, Ke & Dong, Zhao Yang, 2020. "A comprehensive review of variable renewable energy levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    4. Chen, Hao & Gao, Xin-Ya & Liu, Jian-Yu & Zhang, Qian & Yu, Shiwei & Kang, Jia-Ning & Yan, Rui & Wei, Yi-Ming, 2020. "The grid parity analysis of onshore wind power in China: A system cost perspective," Renewable Energy, Elsevier, vol. 148(C), pages 22-30.
    5. Jhonathan Fernandes Torres Souza & Sergio Almeida Pacca, 2019. "How far can low-carbon energy scenarios reach based on proven technologies?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 24(5), pages 687-705, June.
    6. Hassan, I.A. & Ramadan, Haitham S. & Saleh, Mohamed A. & Hissel, Daniel, 2021. "Hydrogen storage technologies for stationary and mobile applications: Review, analysis and perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Epari Ritesh Patro & Teegala Srinivasa Kishore & Ali Torabi Haghighi, 2022. "Levelized Cost of Electricity Generation by Small Hydropower Projects under Clean Development Mechanism in India," Energies, MDPI, vol. 15(4), pages 1-16, February.
    2. Zhao, Zhen-Yu & Chen, Yu-Long & Thomson, John Douglas, 2017. "Levelized cost of energy modeling for concentrated solar power projects: A China study," Energy, Elsevier, vol. 120(C), pages 117-127.
    3. Rahman, Shaikh M. & Kirkman, Grant A., 2015. "Costs of certified emission reductions under the Clean Development Mechanism of the Kyoto Protocol," Energy Economics, Elsevier, vol. 47(C), pages 129-141.
    4. Marco Rogna, 2019. "A First-Phase Screening Device for Site Selection of Large-Scale Solar Plants with an Application to Italy," BEMPS - Bozen Economics & Management Paper Series BEMPS57, Faculty of Economics and Management at the Free University of Bozen.
    5. Prehoda, Emily W. & Pearce, Joshua M., 2017. "Potential lives saved by replacing coal with solar photovoltaic electricity production in the U.S," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 710-715.
    6. Sanchez-Alfaro, Pablo & Sielfeld, Gerd & Campen, Bart Van & Dobson, Patrick & Fuentes, Víctor & Reed, Andy & Palma-Behnke, Rodrigo & Morata, Diego, 2015. "Geothermal barriers, policies and economics in Chile – Lessons for the Andes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 1390-1401.
    7. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    8. Rogna, Marco, 2020. "A first-phase screening method for site selection of large-scale solar plants with an application to Italy," Land Use Policy, Elsevier, vol. 99(C).
    9. Nosrat, Amir H. & Swan, Lukas G. & Pearce, Joshua M., 2013. "Improved performance of hybrid photovoltaic-trigeneration systems over photovoltaic-cogen systems including effects of battery storage," Energy, Elsevier, vol. 49(C), pages 366-374.
    10. Rodriguez-Sanchez, David & Rosengarten, Gary, 2015. "Improving the concentration ratio of parabolic troughs using a second-stage flat mirror," Applied Energy, Elsevier, vol. 159(C), pages 620-632.
    11. Muratori, Matteo & Ledna, Catherine & McJeon, Haewon & Kyle, Page & Patel, Pralit & Kim, Son H. & Wise, Marshall & Kheshgi, Haroon S. & Clarke, Leon E. & Edmonds, Jae, 2017. "Cost of power or power of cost: A U.S. modeling perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 861-874.
    12. Yuan, Jiahai & Sun, Shenghui & Zhang, Wenhua & Xiong, Minpeng, 2014. "The economy of distributed PV in China," Energy, Elsevier, vol. 78(C), pages 939-949.
    13. George A. Gonzalez, 2016. "Transforming Energy: Solving Climate Change with Technology Policy . New York : Cambridge University Press . 360 pages. ISBN 9781107614970, $29.99 paperback. Anthony Patt , 2015 ," Review of Policy Research, Policy Studies Organization, vol. 33(1), pages 111-113, January.
    14. Wenli Qiang & Shuwen Niu & Xiaojie Liu & Xiang Wang & Zhuo Jia & Runqi Dai, 2018. "Analysis of generation cost changes during China’s energy transition," Energy & Environment, , vol. 29(4), pages 456-472, June.
    15. Plain, N. & Hingray, B. & Mathy, S., 2019. "Accounting for low solar resource days to size 100% solar microgrids power systems in Africa," Renewable Energy, Elsevier, vol. 131(C), pages 448-458.
    16. Du, Yimeng & Takeuchi, Kenji, 2019. "Can climate mitigation help the poor? Measuring impacts of the CDM in rural China," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 178-197.
    17. Stua, Michele, 2013. "Evidence of the clean development mechanism impact on the Chinese electric power system's low-carbon transition," Energy Policy, Elsevier, vol. 62(C), pages 1309-1319.
    18. Arnaud de La Tour & Matthieu Glachant & Yann Ménière, 2013. "What cost for photovoltaic modules in 2020? Lessons from experience curve models," Working Papers hal-00805668, HAL.
    19. Viebahn, Peter & Daniel, Vallentin & Samuel, Höller, 2012. "Integrated assessment of carbon capture and storage (CCS) in the German power sector and comparison with the deployment of renewable energies," Applied Energy, Elsevier, vol. 97(C), pages 238-248.
    20. Stankeviciute, Loreta & Kitous, Alban & Criqui, Patrick, 2008. "The fundamentals of the future international emissions trading system," Energy Policy, Elsevier, vol. 36(11), pages 4272-4286, November.

    More about this item

    Keywords

    Levelized cost of electricity; Power projects; Clean development mechanism; Kyoto protocol; Certified emission reductions;
    All these keywords.

    JEL classification:

    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:148:y:2018:i:c:p:235-246. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.