unit cost. As indicated in Table 1, reduced implementation could add as much as fifteen percent to the average unit cost, significantly offsetting potential major cost reductions, i.e., the sixty unit nominal year 2000 cost is comparable to the twenty unit low year 2000 cost for the SPS technology. Figure 3 shows the ranges of levelized annual generation costs for SPS and the alternative technologies considered. The shaded area of each bar in Figure 3 represents the spread in nominal costs as a result of the spread of fuel price scenarios considered, except in the case of the terrestrial central station photovoltaic (TPV) where the range is defined by geographic location (Phoenix and Cleveland) and in the case of decentralized photovoltaics, where the indicated range is both location and design dependent. The low bound of each bar in Figure 3 represents the generation cost under the most favorable fuel price, location and/or design coupled with the low year 2000 capital cost. Conversely, the high bound represents the least favorable fuel price, location and/or design coupled with the high year 2000 capital cost. Examination of Figure 3 leads to the following conclusions: 1. The SPS will have little chance of competing favorably, on a levelized cost basis, with improved conventional technologies over a wide range of fuel prices. 2. The SPS has a better chance of competing with near-term technologies, i.e. coal gasification/combined cost, high near-term technology cost assumptions. 3. The SPS may compete favorably with advanced technologies such as fusion, central station and decentralized photovoltaic. However, large uncertainties exist about the future costs of these systems. Figure 4 shows the sensitivity of generation cost to variations in capacity factor for each of the central station technologies. The SPS, fusion and terrestrial photovoltaic systems are more sensitive to variations in capacity factor as a result of their higher capital intensity and essentially no variable fuel costs.
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