Research determines financial viabililty of solar power plants

Aug 22, 2013

Concentrated solar power technology is an emerging, environmentally friendly way to produce electricity.

However, the high upfront capital costs of , an uncertain production schedule, and the inherent weather-related variability of solar power production raise an important question: is the technology worth it?

A team of Rutgers–Camden researchers has developed a for the solar power plant—including weather, solar, and storage interactions—that enables production prediction by hour, allowing the plant owners to demonstrate financial viability of the technology.

"If you want to build a , you need to finance it. To finance it, one of the requirements is to rigorously demonstrate detailed plant operations that generate profits," says Alok Baveja, a professor of management at the Rutgers School of Business–Camden.

The research project began as a special study project for Lockheed Martin engineer Alan Taber in the fall of 2008 while he was working toward earning his at Rutgers–Camden.

Taber, a Cinnaminson resident who completed his MBA at Rutgers–Camden in 2009, is a senior project specialist who works in Lockheed Martin's Aegis Chief Engineering Department. The global security company's engineers have designed world-class utility-scale concentrated that can be connected to a .

To obtain financing for a new plant, plant production guarantees must be established.

"The task was to model how the plant would produce power and if we could reasonably operate it in a way that would enable the plant to repay its investors," Taber explains.

Taber worked with Baveja and Andrei Nikiforov, an assistant professor of finance at the Rutgers School of Business–Camden, to develop a mathematical model that predicts an hourly production schedule over an entire year for a solar plant. The model therefore estimates minimum and maximum annual revenue from the plant.

"We wanted to find the best possible solution to the question and this model is one than can be extended to other renewable energy technology," Nikiforov says.

Taber, Baveja, and Nikiforov published their research in an article titled "An Optimization Mathematical Model for Concentrated Solar Power Financing Decisions at Lockheed Martin."

The article appeared in the journal Interfaces in late 2012. Interfaces is published by the Institute for Operations Research and the Management Sciences (INFORMS).

"It makes sense for Rutgers–Camden to continue to work on projects that can make a difference with technology leaders like Lockheed Martin," Baveja says. "Our students, including MBA students like Alan, greatly benefit from research opportunities like this one."

Taber earned his bachelor's degree from Stanford University and his master's degree from Stevens Institute of Technology.

Baveja is a resident of Macungie, Pa. whose expertise is in the use of innovative analytics modeling for managing operations in the public and private sectors. His research has appeared in several prominent operations and management journals.  He received his bachelor's degree from the Indian Institute of Technology in New Delhi, India, and his doctoral degree from the State University of New York at Buffalo.

Nikiforov, of Cherry Hill, studies how financial markets respond to liquidity shocks and how liquidity can be transferred across different markets. He also looks into the effect of earnings seasons on the prices of stocks and bonds. He received his bachelor's and master's degrees from Perm State University in Russia and his MBA and doctoral degrees from the University of Missouri.

Explore further: Expert calls for nuke plant closure (Update)

add to favorites email to friend print save as pdf

Related Stories

Smart energy to power refugee camps

Aug 21, 2013

Rolling out renewable and smart energy solutions in refugee camps could dramatically improve the well being of millions of refugees world-wide. Working in collaboration with the UNHCR, an EPFL Master's student is investigating ...

Saudi-led consortium wins Morocco solar energy bid (Update)

Sep 24, 2012

(AP)—Morocco awarded a $1 billion contract to build a solar power plant to a Saudi-led consortium on Monday, as part of this country's ambitious plans to harness the sun's energy and reduce dependence on imported fossil ...

Morocco launches solar mega-project at Ouarzazate

May 10, 2013

Morocco on Friday officially launched the construction of a 160-megawatt solar power plant near the desert city of Ouarzazate, the first in a series of vast solar projects planned in the country.

Recommended for you

Indonesia passes law to tap volcano power

17 hours ago

The Indonesian parliament on Tuesday passed a long-awaited law to bolster the geothermal energy industry and tap the power of the vast archipelago's scores of volcanoes.

Expert calls for nuke plant closure (Update)

Aug 25, 2014

A senior federal nuclear expert is urging regulators to shut down California's last operating nuclear plant until they can determine whether the facility's twin reactors can withstand powerful shaking from ...

Image: Testing electric propulsion

Aug 20, 2014

On Aug. 19, National Aviation Day, a lot of people are reflecting on how far aviation has come in the last century. Could this be the future – a plane with many electric motors that can hover like a helicopter ...

Where's the real value in Tesla's patent pledge?

Aug 20, 2014

With the much-anticipated arrival next month of electric vehicle manufacturer Tesla's Model S to Australian shores, it's a good time to revisit Tesla's pledge to freely share patents. ...

User comments : 0