# Techno-Economic Assessment of an Innovative Small-Scale Solar-Biomass Hybrid Power Plant
## 2 Materials and Methods
### Economic Analysis  
The economic viability analysis of the hybrid power plant proposed in this study was based on the assessment of the LCOE, commonly used in evaluating the profitability of power production technologies [38; 39]. The suitability of this parameter lies in comparing the present value of investment costs (CAPEX), operation and maintenance costs (OPEX), and financing costs with the annual energy production [40]:  
\[LCOE=\frac{LCC}{\sum_{t=1}^{N}\frac{E_{t}}{(1+d)^{t}}} \tag{1}\]  
where the term LCC corresponds to life cycle cost, E\({}_{t}\) is the annual energy production (assumed constant throughout the project's lifetime), N is the project's lifetime period, and  
Figure 5: Process diagram of the proposed power plant (water/steam side).  
d is the discount rate considered. In turn, the LCC is obtained from the initial investment (I0) and the present value of the annual operation and maintenance costs (CO&M), which also include costs associated with project financing, insurance, and taxes:  
\[LCC=I_{0}+\sum_{t=1}^{N}\frac{C_{O\&M}}{(1+d)^{t}} \tag{2}\]  
The analysis of the LCOE allows for the determination of a theoretical constant price throughout the project's lifetime (EUR/kWh). The CAPEX includes costs such as development, consenting, engineering, procurement, construction, and commissioning, while the OPEX encompasses both direct and indirect costs [41]. Both the investment required for the plant's execution and the operation and maintenance costs (Table 3) were characterized using the System Advisor Model [42]. The main financial and tax parameters considered for the LCOE analysis are presented in Table 4.  
As shown in Table 4, no incentives such as subsidies or tax exemptions were considered. Additionally, the depreciation of assets followed a linear model applied over the plant's lifetime. Furthermore, the debt return period varied for each analyzed case. Although its impact was not significant, the objective was to minimize the duration of this period while ensuring positive cash flows at all times. An annual availability of 95% and parasitic losses of 10% were assumed. Regarding biomass consumption, which constituted the main operating and maintenance costs of the hybrid plant, a cost of EUR 65/ton was considered. This cost included the acquisition, preprocessing (chipping), and transportation of forest biomass to the plant.  
To conclude with the characterization of the applied methodology, Figure 6 shows a workflow that summarizes the different stages that were addressed in carrying out this work. Figure 6 shows the input data, the most significant calculation processes, the decisions and, finally, the results generated.  
\begin{table}
\begin{tabular}{c c c} \hline
**Parameter** & **Value** & **Units** \\ \hline Annual inflation rate & 2.5 & \% \\ Income tax rate & 25.0 & \% \\ Annual loan interest & 4.0 & \% \\ Debt fraction & 70.0 & \% \\ Plant life cycle & 30 & years \\ \hline \end{tabular}
\end{table}
Table 4: Financial and tax conditions.  
\begin{table}
\begin{tabular}{c c c} \hline
**Parameter** & **Value** & **Units** \\ \hline Site improvement & 30 & EUR/m\({}^{2}\) \\ Solar field & 175 & EUR/m\({}^{2}\) \\ HTF system & 75 & EUR/m\({}^{2}\) \\ Biomass system & 1750 & EUR/kWe \\ Power cycle & 1100 & EUR/kWe \\ Balance of plant & 400 & EUR/kWe \\ Contingency & 10 & \% \\ EPC cost & 10 & \% \\ O\&M fixed cost & 66 & EUR/(kW\(\cdot\)yr) \\ O\&M variable cost (excl. & \\ biomass) & 5 & EUR/MWh \\ \hline \end{tabular}
\end{table}
Table 3: Cost assumptions for economic analysis.