Levelised costs
Jun 25, 2012
Bishop Hill in Economics, Energy: grid

Two quotes on levelised costs as a metric for energy generation types:

The standard measure used by many public agencies to compare the costs of generating electricity using different technologies is the levelised cost per MWh. As will be explained below, this can be a perfectly adequate measure for making comparisons in a centrally planned electricity system when the issue is whether to build nuclear, coal-fired or gas-fired plants to operate most of the time – i.e. on or close to base load. Unfortunately, this measure may be quite misleading as a basis for making cost comparisons when considering investment decisions for either (a) electricity systems that operate on the basis of market pools (such as the UK), and/or (b) technologies which are inherently intermittent, such as many forms of renewable generation (such as wind power).

Gordon Hughes - Why is wind power so expensive?

A key attraction of onshore wind over other low-carbon forms of electricity generation is cost. In terms of levelised cost onshore wind is currently the cheapest renewable technology in the UK. It could become fully competitive with older conventional sources of energy as early as 2016, according to analysts at Bloomberg.

Sam Fankhauser, LSE blog

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