1. What is Levelized Cost of Electricity (LCOE)?

Levelized Cost of Electricity (LCOE) represents the average net present cost of electricity generation for a generating plant over its lifetime. It's a key metric used to compare different methods of electricity generation on a consistent basis.

2. How Does the Calculator Work?

The calculator uses the LCOE formula:

Where:

• Total Costs — All costs associated with the electricity generation project (currency)
• Total kWh — Total electricity generated over the project's lifetime (kilowatt-hours)

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 project planning, investment decisions, and policy making. It allows for fair comparison between different energy technologies with varying capital costs, fuel costs, and operational lifetimes.

4. Using the Calculator

Tips: Enter total project costs in your local currency and total expected electricity generation in kilowatt-hours. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What costs should be included in total costs?
A: Total costs should include capital costs, operating and maintenance costs, fuel costs, and decommissioning costs if applicable.

Q2: How is total kWh calculated?
A: Total kWh is estimated based on the plant's capacity factor, rated capacity, and expected operational lifetime.

Q3: Why is LCOE important for renewable energy?
A: LCOE helps compare renewable energy sources with conventional sources, showing their economic competitiveness over the project lifetime.

Q4: Does LCOE account for inflation?
A: Typically, LCOE calculations use real (inflation-adjusted) costs to provide consistent comparisons across time.

Q5: What are typical LCOE ranges for different energy sources?
A: LCOE varies by technology and region, but generally ranges from $0.03-$0.15 per kWh for most conventional and renewable energy sources.