Thermoeconomic Analysis of Renewable Energy Conversion Systems

Abstract

Levelized cost of electricity treats every kilowatt-hour as equivalent regardless of the thermodynamic quality of the
process that produced it, obscuring where within a renewable energy conversion system cost and irreversibility
actually accumulate. We apply the Specific Exergy Costing (SPECO) method to four renewable conversion
systems, a parabolic-trough concentrated solar power plant, a geothermal organic Rankine cycle (ORC) plant, a
utility-scale wind-to-hydrogen electrolysis system, and a biomass-fired Rankine plant, evaluating 36
component-level exergy balances across the four systems using plant specifications representative of currently
deployed mid-scale installations (5-50 MW). Overall exergy efficiency ranged from 21% (wind-to-hydrogen,
dominated by electrolyzer irreversibility) to 44% (geothermal ORC), while the levelized cost of exergy ranged from
18.4 $/GJ (geothermal ORC) to 52.7 $/GJ (wind-to-hydrogen), a 2.9-fold spread not reflected in the corresponding
levelized-cost-of-electricity figures, which spanned only a 1.6-fold range across the same four systems. Exergy
destruction cost-rate analysis identified the solar receiver and heat-transfer-fluid loop as the single largest
cost-weighted irreversibility source in the concentrated solar plant, accounting for 38% of total exergy-destruction
cost despite representing only 19% of total exergy destruction by magnitude, because the exergy lost there occurs
early in the conversion chain, before subsequent capital investment has extracted value from it. A sensitivity
analysis varying capital recovery factor (effectively, discount rate and plant lifetime assumptions) by ±25% shifted
levelized cost of exergy by 14-19% across the four systems but left the relative cost ranking of system components
unchanged in every case, indicating that component-level thermoeconomic priorities are robust to financing
assumptions even though absolute cost figures are not. Exergoeconomic factor analysis, which apportions
component cost between capital investment and exergy-destruction cost, showed that the electrolyzer stack in the
wind-to-hydrogen system was capital-dominated (exergoeconomic factor 0.81) while the solar receiver was
destruction-dominated (factor 0.29), implying opposite priorities for cost-effective design improvement, capital cost
reduction in the former, efficiency improvement in the latter. These results demonstrate that component-resolved
thermoeconomic analysis surfaces cost-effectiveness priorities invisible to system-level levelized-cost metrics and
provides quantitative guidance for where renewable conversion system investment yields the greatest return.