TY - JOUR
T1 - The levelized costs of electricity generation by the CDM power projects
AU - Rahman, Shaikh M.
AU - Spalding-Fecher, Randall
AU - Haites, Erik
AU - Kirkman, Grant A.
N1 - Publisher Copyright:
© 2018 Elsevier Ltd
PY - 2018/4/1
Y1 - 2018/4/1
N2 - 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.
AB - 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.
KW - Certified emission reductions
KW - Clean development mechanism
KW - Kyoto protocol
KW - Levelized cost of electricity
KW - Power projects
UR - http://www.scopus.com/inward/record.url?scp=85041477283&partnerID=8YFLogxK
U2 - 10.1016/j.energy.2018.01.144
DO - 10.1016/j.energy.2018.01.144
M3 - Article
AN - SCOPUS:85041477283
SN - 0360-5442
VL - 148
SP - 235
EP - 246
JO - Energy
JF - Energy
ER -