Comparative Technology Assessment

The main results of this 2005 Bank assessment¹ are presented here.  The assessment characterizes the current and future commercial prospects of renewable and fossil fuel-fired electricity generation technologies configured to suit off grid, mini-grid and grid applications.  It was designed to anticipate technological change in the power sector over the next ten years, especially as regards emerging renewable energy technology, new prime mover technology, and hybrid configurations that can potentially deliver improved performance and better economics for a given electrification situation.  Therefore, two sets of results are presented – for the years 2004 and 2015.

Figures 1 through 4 present levelized generation costs developed using a consistent economic analysis method but differentiated according to the deployment conditions and plant size ranges.  The cost ranges shown result from the uncertainty analysis that was applied to the various levelized generating cost components using a Monte Carlo approach.  The generating cost is the sum of capital, operating and fuel costs, levelized over the economic life of the plant using a 10% real discount rate that is assumed to be the opportunity cost of capital. 

The analysis was conducted on an economic, rather than a financial basis.  The specific approach used for the economic analysis did not include project opportunity costs or transfer payments such as taxes, duties, interest payments (including interest during construction) and subsidies. Similarly, physical contingencies are included in the analysis, but price contingencies are not. The analysis was done in real 2004 US dollars. The environmental costs/benefits of a particular technology are given in physical quantities without any attempt to value these in monetary terms, as such valuations must be country- and site-specific. 

See the study report for more details. 

• Stand-alone systems
• Mini-grid Systems
• Grid-connected systems

Stand-alone Systems

Renewable energy technologies - wind, mini-hydro, and biomass-electric - are the least-cost option (on a levelized basis) for off-grid electrification applications (See Figure 2), assuming availability of the renewable resource.  Pico-hydro, small wind, and PV-wind hybrid technologies in particular are projected to be in the range 15-25 cents/kWh, less than half the 30-40 cents/kWh for gasoline and diesel engine generators. The most expensive renewable energy technology (solar PV) is comparable in levelized electricity costs to the projected costs for gasoline or diesel engine generators, especially for small power applications (50-300 W).

CF=Capacity Factor

Mini-grid Systems

Mini-grid applications are village- and district-level networks with loads between 5 kW and 500 kW not connected to a national grid. The assessment (See Figure 3) indicates that numerous renewable energy technologies (biomass, biogas, geothermal, wind, and micro-hydro) are the potential least-cost generation options for mini-grids, assuming a sufficient renewable energy resource is available. Two biomass technologies – biogas digesters and biomass gasifiers – seem particularly promising, due to their high capacity factors and availability in size ranges matched to mini-grid loads. Geothermal also appears economical, recognizing that it is restricted to only those developing economies with easy-to-tap hydrothermal resources and no large field development costs. Since many renewable energy technologies are viable in this size range, mini-grid planners should thoroughly review their options to make the best selection.

  Grid-connected systems

In grid-connected configurations, conventional power generation technologies (open cycle and combined cycle gas turbines, and coal- and oil-fired steam turbines) remain the least-cost option, given the most-recent World Bank fuel forecast.² Site-specific considerations such as load profile, demand growth and especially the cost differential between oil, natural gas and coal prices, determine which specific technology is the least cost and most attractive. 

Figure 4 indicates that, when sufficient resources are available, four major renewable power generation technologies - geothermal, bioenergy, hydro, and wind power – are potentially as economical as conventional power plants of similar size (e.g., less than 50 MW). However (See Figure 5), these renewable energy technologies simply cannot compete with larger (50-300 MW) conventional generating units.