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Solar versus Combined Cycle Electricity Generation in Capital Constrained African Economies: Which is Greener?

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  • Saule Baurzhan

    ()
    (Department of Economics, Eastern Mediterranean University, Mersin 10, Turkey)

  • Glenn P. Jenkins

    ()
    (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey)

Abstract

Many public electric utilities and countries in Africa are capital constrained while the growth in demand for electricity is increasing. In this paper an economic analysis is carried out that investigate the efficiency of investing in solar photovoltaic (PV) power plants for grid generation in such a capital constrained countries. The major benefits of the solar power generation are reductions in operating costs (mainly fuel), greenhouse gas (GHG) emissions, and other pollutants of displaced fossil fuel generation. These same benefits could be realised if efficient thermal power plants were used to displace fuel inefficient thermal plants. The amount of fuel savings, GHG emission mitigation, levelized cost of electricity generation are calculated for both solar PV and combined cycle power plants to determine the economic feasibility of introducing solar generation facilities. Investing in combined cycle power plants powered by heavy fuel oil (HFO) is three times as effective in reducing greenhouse gases as the same investment made in solar PV plants. Even If solar investment costs fall as anticipated, it will take at least 16 years of continuous decline before solar generation technology will become cost-effective.

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Bibliographic Info

Paper provided by JDI Executive Programs in its series Development Discussion Papers with number 2014-02.

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Length: 38 pages
Date of creation: Jan 2014
Date of revision:
Handle: RePEc:qed:dpaper:246

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Keywords: Electricity Generation; Cost–Benefit Analysis; Africa;

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  1. Phadke, Amol, 2009. "How many Enrons? Mark-ups in the stated capital cost of independent power producers' (IPPs') power projects in developing countries," Energy, Elsevier, vol. 34(11), pages 1917-1924.
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  3. Sovacool, Benjamin K., 2009. "The intermittency of wind, solar, and renewable electricity generators: Technical barrier or rhetorical excuse?," Utilities Policy, Elsevier, vol. 17(3-4), pages 288-296, September.
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  5. Frondel, Manuel & Ritter, Nolan & Schmidt, Christoph M. & Vance, Colin, 2010. "Economic impacts from the promotion of renewable energy technologies: The German experience," Energy Policy, Elsevier, vol. 38(8), pages 4048-4056, August.
  6. Michael Greenstone & Elizabeth Kopits & Ann Wolverton, 2011. "Estimating the Social Cost of Carbon for Use in U.S. Federal Rulemakings: A Summary and Interpretation," NBER Working Papers 16913, National Bureau of Economic Research, Inc.
  7. Gagnon, Luc & Belanger, Camille & Uchiyama, Yohji, 2002. "Life-cycle assessment of electricity generation options: The status of research in year 2001," Energy Policy, Elsevier, vol. 30(14), pages 1267-1278, November.
  8. Severin Borenstein, 2011. "The Private and Public Economics of Renewable Electricity Generation," NBER Working Papers 17695, National Bureau of Economic Research, Inc.
  9. Kennedy, Scott, 2005. "Wind power planning: assessing long-term costs and benefits," Energy Policy, Elsevier, vol. 33(13), pages 1661-1675, September.
  10. Sovacool, Benjamin K. & Watts, Charmaine, 2009. "Going Completely Renewable: Is It Possible (Let Alone Desirable)?," The Electricity Journal, Elsevier, vol. 22(4), pages 95-111, May.
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