# Economic Analysis of a Zero-Water Solar Power Plant for Energy Security
## 2 Methodology
### Economic Evaluation  
For the detailed economic analysis of the overall solar power plant, the \(TRR\) method is used [35]. Through the estimation of the initial investment of the power plant, together with the economic, financial, operating, and market parameters, the annual revenues required during the economic life of the plant are obtained. These revenues are the minimum necessary to ensure a secure and reliable operation of the plant throughout its economic life. The method results in the estimation of the \(LCOE\), which allows us to assess the feasibility and profitability of a plant, when compared to other alternatives:  
\[LCOE=\frac{TRR-BPV}{MPQ} \tag{2}\]  
where \(BPV\) is the revenue of the by-products (here, it is equal to zero), and \(MPQ\) is the main product quantity (in this case, the electricity generated by the plant). The \(TRR\) is obtained with the sum of the escalated annual expenditures expected during the economic life of the plant:  
\[TRR=\sum_{n=0}^{N}TCR_{n}+ROI_{n}+ITX_{n}+OTXI_{n}+FC_{n}+O\&M_{n} \tag{3}\]  
where \(TCR\) is the total capital recovery, \(ROI\) is the minimum return on investment, \(ITX\) are the income taxes, \(OTXI\) are other taxes and insurance, and \(FC\) are the fuel costs. In this study, the proposed solar plant incorporating the Earth-CAT system is compared to a similar plant that uses first a conventional air-based cooling system and then a water-based cooling system. Table 2 summarizes the assumptions made for the detailed economic analysis [35; 41]. The financing of the plant is assumed to be divided into 30% of common equity and 70% of debt, with respective required annual returns of 11% and 6.5% [42; 43]. The results of the economic analysis of the plant incorporating the Earth-CAT system are presented in Section 3.2, including the estimation of all the equipment costs according to the characteristics and size of the plant. \begin{table}
\begin{tabular}{c c} \hline \hline PVC Pipes (EUR/m) & 30.76 \\ Fans (EUR/unit) & 319 \\ Particle filters (EUR/unit) & 156 \\ Dehydrorator filters (EUR/unit) & 156 \\ Valves, electronic, and electrical installations (\%) & 10\% of equipment costs \\ Excavation (EUR/m3) & 2.4 \\ Refilling (EUR/m3) & 2 \\ Cleanings, overhauls and repairs of the pipes EUR/m) & 1 \\ Other O\&M costs (\%) & 2\% of O\&M costs \\ \hline \hline \end{tabular}
\end{table} 
Table 1: Relevant costs. The NPV and PBP are used to evaluate the viability of an investment and are used here to evaluate the zero-water operation of the Earth-CAT system, when compared to a conventional water-based cooling system. The NPV represents the present value of all the revenues and costs estimated during the economic life of a project together with the initial investment. If the NPV is positive, the investment generates profit. In order to compare the viability of the Earth-CAT system to conventional wet cooling systems, the NPV is calculated considering water-cost saving as a revenue [44]:  
\[NPV_{Earth-CAT}=-C_{0_{Earth-CAT}}+\sum_{n=0}^{N}\frac{\left(C_{W,n}-C_{0\&M,n _{Earth-CAT}}\right)}{\left(1+r\right)^{n}} \tag{4}\]  
where \(C_{0_{Earth-CAT}}\) is the initial investment of the Earth-CAT system, \(C_{W,n}\) is the water-cost saving per m\({}^{3}\), \(C_{0\&M,n_{Earth-CAT}}\) are the O&M costs of each \(n\) year during the total economic life \(N\) of the Earth-CATs, and \(r\) is the discount rate. The PBP indicates the year in which the initial investment is recovered through the annual profits of the project without accounting for the value of money, and it is calculated as follows [45]:  
\[PBP_{Earth-CAT}=\frac{C_{0_{Earth-CAT}}}{\left|C_{W,n}-C_{0\&M,n_{Earth-CAT}} \right|} \tag{5}\]  
A sensitivity analysis of parameters with a strong effect on the total costs of the Earth-CAT system is presented at the end of Section 3.2. The used variables are the number of pipes, the pipe unit cost, and the gain from the avoided water.