1. What is the IEA Levelized Cost of Electricity?

The IEA Levelized Cost of Electricity (LCOE) represents the average net present cost of electricity generation for a generating plant over its lifetime. It allows for comparison of different generation technologies on a consistent basis.

2. How Does the Calculator Work?

The calculator uses the IEA LCOE formula:

Where:

• Total Cost Over Lifetime — All costs including capital, fuel, operation, and maintenance ($)
• Total Electricity Generated Over Lifetime — Total electricity output over the plant's lifetime (kWh)

Explanation: The LCOE represents the minimum price at which electricity must be sold for the project to break even over its lifetime.

3. Importance of LCOE Calculation

Details: LCOE is crucial for energy policy planning, investment decisions, and comparing the cost competitiveness of different electricity generation technologies.

4. Using the Calculator

Tips: Enter total lifetime costs in dollars and total lifetime electricity generation in kilowatt-hours. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What costs are included in the total lifetime cost?
A: Capital costs, fuel costs, operation and maintenance costs, financing costs, and decommissioning costs.

Q2: How is LCOE different from simple cost per kWh?
A: LCOE accounts for the time value of money and provides a more comprehensive economic assessment over the entire project lifetime.

Q3: What are typical LCOE ranges for different technologies?
A: LCOE varies significantly by technology, location, and fuel prices, ranging from $0.03-$0.15 per kWh for most conventional and renewable technologies.

Q4: Does LCOE include grid connection costs?
A: Typically, LCOE includes plant-level costs. Grid connection and transmission costs are often calculated separately.

Q5: How does capacity factor affect LCOE?
A: Higher capacity factors generally lead to lower LCOE as fixed costs are spread over more electricity generation.