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Levelized cost of electricity
The levelized cost of electricity (LCOE) is a measure of the average net present cost of electricity generation for a generator over its lifetime. It is used for investment planning and to compare different methods of electricity generation on a consistent basis.
The more general term levelized cost of energy may include the costs of either electricity or heat. The latter is also referred to as levelized cost of heat or levelized cost of heating (LCOH), or levelized cost of thermal energy.
The cost of electricity production depends on costs during the expected lifetime of the generator and the amount of electricity the generator is expected to produce over its lifetime. The levelized cost of electricity (LCOE) is the average cost in currency per energy unit, for example, EUR per kilowatt-hour or AUD per megawatt-hour.
LCOE is defined by the formula:
LCOE is an estimation of the cost of production of electricity and not the price of electricity. The price of electricity may be influenced by additional factors including markup and price controls.
LCOE is commonly used for:
Significant caution needs to be applied to use of LCOE as outputs are highly sensitive to the selection of input values. The ability to interpret and compare LCOE model outputs is dependent upon the level of detailed justification provided for input values and the results of sensitivity analysis against the selection of input values. For any given electricity generation technology, LCOE can vary significantly from region to region depending on factors such as the cost of fuel or availability of renewable energy resources. For LCOE to be usable for rank-ordering energy-generation alternatives, caution must be taken to calculate it in "real" terms, i.e. including adjustment for expected inflation.
An energy efficiency gap phenomenon exists due to observed lack of consideration of and implementation of demand-side energy conservation. LCOE is typically used in support of supply-side generation capacity replacement and expansion decision making. The energy efficiency gap phenomenon suggests demand-side energy conservation should also be considered in investment strategies and energy policy.
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Levelized cost of electricity AI simulator
(@Levelized cost of electricity_simulator)
Levelized cost of electricity
The levelized cost of electricity (LCOE) is a measure of the average net present cost of electricity generation for a generator over its lifetime. It is used for investment planning and to compare different methods of electricity generation on a consistent basis.
The more general term levelized cost of energy may include the costs of either electricity or heat. The latter is also referred to as levelized cost of heat or levelized cost of heating (LCOH), or levelized cost of thermal energy.
The cost of electricity production depends on costs during the expected lifetime of the generator and the amount of electricity the generator is expected to produce over its lifetime. The levelized cost of electricity (LCOE) is the average cost in currency per energy unit, for example, EUR per kilowatt-hour or AUD per megawatt-hour.
LCOE is defined by the formula:
LCOE is an estimation of the cost of production of electricity and not the price of electricity. The price of electricity may be influenced by additional factors including markup and price controls.
LCOE is commonly used for:
Significant caution needs to be applied to use of LCOE as outputs are highly sensitive to the selection of input values. The ability to interpret and compare LCOE model outputs is dependent upon the level of detailed justification provided for input values and the results of sensitivity analysis against the selection of input values. For any given electricity generation technology, LCOE can vary significantly from region to region depending on factors such as the cost of fuel or availability of renewable energy resources. For LCOE to be usable for rank-ordering energy-generation alternatives, caution must be taken to calculate it in "real" terms, i.e. including adjustment for expected inflation.
An energy efficiency gap phenomenon exists due to observed lack of consideration of and implementation of demand-side energy conservation. LCOE is typically used in support of supply-side generation capacity replacement and expansion decision making. The energy efficiency gap phenomenon suggests demand-side energy conservation should also be considered in investment strategies and energy policy.