Methodology for Selecting a Location for a Photovoltaic Farm on the Example of Poland

Abstract

As the LCOE for photovoltaics has decreased several times, it is once again gaining popularity. The intensification of the development of PV installations is contributing to the duck curve phenomenon in an increasing number of countries and, consequently, affecting current electricity prices. Decisions on new investments in large-scale PV sources are driven by potential economic and environmental effects, and these, in turn, are subject to locational considerations, both as to the country and its region. In calculating the economic impact of locating a 1 MWp PV farm, it was assumed that the electricity generated by the farm would be fed into the national grid, and that the life of the PV farm would be 20 years. Poland was considered as an example country for the placement of a photovoltaic farm. The authors of this paper proposed that the main verification parameter is the availability of connection capacities to feed the produced electricity into the country’s electricity grid. The methodology proposed by the authors for the selection of the location of a PV farm consists of four steps: step (i) identification and selection of the administrative division of a given country; step (ii) verification of available connection capacities; step (iii) (two stages) verification of other factors related to the location of the PV farm (e.g., information on land availability and the distance of the land from the substation), and analysis of productivity at each potential location and electricity prices achieved on the power exchange; step (iv) economic analysis of the investment—analyses of PV farm energy productivity in monetary terms on an annual basis, cost analysis (CAPEX, OPEX) and evaluation of economic efficiency (DPP, NPV, IRR). The greatest impact on the economic efficiency of a PV project is shown by the value of land (as part of CAPEX), which is specific to a given location, and revenues from energy sales, which are pretty similar for all locations.

Keywords

• renewable energy
• solar PV farm
• selection methodology
• NPV
• IRR
• photovoltaic