Cost of electricity by source#OpenEI Database

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| image4 = 20201019 Levelized Cost of Energy (LCOE, Lazard) - renewable energy.svg

| caption4 = Levelized cost: With increasingly widespread implementation of renewable energy sources, costs have declined, most notably for energy generated by solar panels.{{cite news |last1=Chrobak |first1=Ula |others=Infographics by Sara Chodosh |title=Solar power got cheap. So why aren't we using it more? |work=Popular Science |date=28 January 2021 |url=https://www.popsci.com/story/environment/cheap-renewable-energy-vs-fossil-fuels/ |url-status=live |archive-date=29 January 2021 |archive-url=https://web.archive.org/web/20210129144621/https://www.popsci.com/story/environment/cheap-renewable-energy-vs-fossil-fuels/}} Chodosh's graphic is derived from data in {{cite web |title=Lazard's Levelized Cost of Energy Version 14.0 |website=Lazard.com |publisher=Lazard |url=https://www.lazard.com/media/451419/lazards-levelized-cost-of-energy-version-140.pdf |archive-url=https://web.archive.org/web/20210128105700/https://www.lazard.com/media/451419/lazards-levelized-cost-of-energy-version-140.pdf |archive-date=28 January 2021 |date=19 October 2020 |url-status=live}}{{cite web |title=Lazard LCOE Levelized Cost Of Energy+ |url=https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf |publisher=Lazard |archive-url=https://web.archive.org/web/20240828224744/https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf |archive-date=28 August 2024 |page=16 |date=June 2024 |url-status=live}}

Levelized cost of energy (LCOE) is a measure of the average net present cost of electricity generation for a generating plant over its lifetime.

| image5 = 2010- Cost of renewable energy - IRENA.svg

| caption5 = Past costs of producing renewable energy declined significantly,{{cite web |title=Renewable Power Costs in 2022 |url=https://www.irena.org/News/articles/2023/Aug/Infographic-Renewable-Power-Generation-Costs-in-2022 |website=IRENA.org |publisher=International Renewable Energy Agency |archive-url=https://web.archive.org/web/20230829234136/https://www.irena.org/News/articles/2023/Aug/Infographic-Renewable-Power-Generation-Costs-in-2022 |archive-date=29 August 2023 |date=August 2023 |url-status=live }} with 62% of total renewable power generation added in 2020 having lower costs than the cheapest new fossil fuel option.{{cite web |title=Majority of New Renewables Undercut Cheapest Fossil Fuel on Cost |url=https://www.irena.org/newsroom/pressreleases/2021/Jun/Majority-of-New-Renewables-Undercut-Cheapest-Fossil-Fuel-on-Cost |website=IRENA.org |publisher=International Renewable Energy Agency |archive-url=https://web.archive.org/web/20210622210639/https://www.irena.org/newsroom/pressreleases/2021/Jun/Majority-of-New-Renewables-Undercut-Cheapest-Fossil-Fuel-on-Cost |archive-date=22 June 2021 |date=22 June 2021 |url-status=live}} ● [https://www.irena.org/newsroom/articles/2021/Jun/Low-Renewable-Costs-Allow-To-Power-Past-Coal Infographic] (with numerical data) and [https://web.archive.org/web/20210624184715/https://www.irena.org/newsroom/articles/2021/Jun/Low-Renewable-Costs-Allow-To-Power-Past-Coal archive thereof]

| image6 = 2010- Decreasing renewable energy costs versus deployment.svg

| caption6 = "Learning curves": Trend of costs and deployment over time, with steeper lines showing greater cost reductions as deployment progresses.{{cite book |title=Renewable Energy Generation Costs in 2022 |url=https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Aug/IRENA_Renewable_power_generation_costs_in_2022.pdf |publisher=International Renewable Energy Agency (IRENA) |archive-url=https://web.archive.org/web/20230830041356/https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Aug/IRENA_Renewable_power_generation_costs_in_2022.pdf |archive-date=30 August 2023 |page=57 |date=2023 |url-status=live |isbn=978-92-9260-544-5 }} Fig. 1.11 With increased deployment, renewables benefit from learning curves and economies of scale.{{Cite web |title=Why did renewables become so cheap so fast? |url=https://ourworldindata.org/cheap-renewables-growth |access-date=2022-06-04 |website=Our World in Data|date=December 2020 |last1=Roser |first1=Max }}

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{{Main|Levelized cost of electricity}}

The levelized cost of electricity (LCOE) is a metric that attempts to compare the costs of different methods of electricity generation consistently. Though LCOE is often presented as the minimum constant price at which electricity must be sold to break even over the lifetime of the project, such a cost analysis requires assumptions about the value of various non-financial costs (environmental impacts, local availability, others), and is therefore controversial. Roughly calculated, LCOE is the net present value of all costs over the lifetime of the asset divided by an appropriately discounted total of the energy output from the asset over that lifetime.Nuclear Energy Agency/International Energy Agency/Organization for Economic Cooperation and Development [http://www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=1472 Projected Costs of Generating Electricity (2005 Update)] {{Webarchive|url=https://web.archive.org/web/20160912144415/http://www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=1472 |date=12 September 2016 }}

The levelized cost of storage (LCOS) is analogous to LCOE, but applied to energy storage technologies such as batteries.{{cite journal |last1=Schmidt |first1=Oliver |last2=Melchior |first2=Sylvain |last3=Hawkes |first3=Adam |last4=Staffell |first4=Iain |title=Projecting the Future Levelized Cost of Electricity Storage Technologies |journal=Joule |date=January 2019 |volume=3 |issue=1 |pages=81–100 |doi=10.1016/j.joule.2018.12.008 |doi-access=free|bibcode=2019Joule...3...81S |hdl=10044/1/75632 |hdl-access=free }} Regardless of technology, storage is but a secondary source of electricity dependent on a primary source of generation. Thus, a true cost accounting demands that the costs of both primary and secondary sources be included when the cost of storage is compared to the cost of generating electricity in real time to meet demand.{{Citation needed|date=February 2022|reason=but the primary source is earlier not real time so won't that be very low cost or free?}}

A cost factor unique to storage are losses that occur due to inherent inefficiencies of storing electricity, as well as increased {{CO2}} emissions if any component of the primary source is less than 100% carbon-free.{{cite journal |last1=Hittinger |first1=Eric S. |last2=Azevedo |first2=Inês M. L. |title=Bulk Energy Storage Increases United States Electricity System Emissions |journal=Environmental Science & Technology |date=28 January 2015 |volume=49 |issue=5 |pages=3203–3210 |doi=10.1021/es505027p |pmid=25629631 |bibcode=2015EnST...49.3203H }} In the U.S., a comprehensive 2015 study found that net system {{CO2}} emissions resulting from storage operation are nontrivial when compared to the emissions from electricity generation [in real time to meet demand], ranging from 104 to 407 kg/MWh of delivered energy depending on location, storage operation mode, and assumptions regarding carbon intensity.

The metric levelized avoided cost of energy (LACE) addresses some of the shortcomings of LCOE by considering the economic value that the source provides to the grid. The economic value takes into account the dispatchability of a resource, as well as the existing energy mix in a region.{{cite web |url=https://www.eia.gov/renewable/workshop/gencosts/pdf/lace-lcoe_070213.pdf

|title=Assessing the Economic Value of New Utility-Scale Electricity Generation Projects

|last=US Energy Information Administration

|date=July 2013

|page=1

|quote=Using LACE along with LCOE and LCOS provides a more intuitive indication of economic competitiveness for each technology than either metric separately when several technologies are available to meet load.

}}

In 2014, the US Energy Information Administration recommendedUS Energy Information Administration, [https://www.eia.gov/outlooks/archive/aeo14/pdf/electricity_generation_2014.pdf Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2014], April 2014. that levelized costs of non-dispatchable sources such as wind or solar be compared to the "levelized avoided cost of energy" (LACE) rather than to the LCOE of dispatchable sources such as fossil fuels or geothermal. LACE is the avoided costs from other sources divided by the annual yearly output of the non-dispatchable source.{{Example needed|date=February 2022}} The EIA hypothesized that fluctuating power sources might not avoid capital and maintenance costs of backup dispatchable sources. The ratio of LACE to LCOE is referred to as the value-cost ratio. When LACE (value) is greater than LCOE (cost), then value-cost ratio is greater than 1, and the project is considered economically feasible.EIA 2021 [https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf Levelized Costs of New Generation Resources in the Annual Energy Outlook 2021]

The value-adjusted levelized cost of electricity (VALCOE) is a metric devised by the International Energy Agency which includes both the cost of the electricity and the value to the electricity system.{{cite journal |last1=Veronese |first1=Elisa |last2=Manzolini |first2=Giampaolo |last3=Moser |first3=David |title=Improving the traditional levelized cost of electricity approach by including the integration costs in the techno-economic evaluation of future photovoltaic plants |journal=International Journal of Energy Research |date=May 2021 |volume=45 |issue=6 |pages=9252–9269 |doi=10.1002/er.6456 |s2cid=234043064 |doi-access=free |bibcode=2021IJER...45.9252V |hdl=11311/1203655 |hdl-access=free }} For example, the same amount of electricity is more valuable at a time of peak demand.

The capture rate is the volume-weighted average market price (or capture price) that a source receives divided by the time-weighted average price for electricity over a period.{{Cite news |title=Renewable energy has hidden costs |newspaper=The Economist |url=https://www.economist.com/finance-and-economics/2023/09/21/renewable-energy-has-hidden-costs |access-date=2023-09-21 |issn=0013-0613}}{{Cite web |last1=Savcenko |first1=Kira |last2=Perez |first2=Mario |date=2021-12-21 |title=Renewable capture prices: why they are crucial for energy transition |url=https://www.spglobal.com/commodityinsights/en/market-insights/blogs/energy-transition/122121-renewable-capture-prices-explained |access-date=2023-09-21 |website=www.spglobal.com |language=en}}{{Cite web |last=Synertics |title=Understanding Capture Prices |url=https://www.synertics.io/blog/26/understanding-capture-prices |access-date=2023-09-21 |website=www.synertics.io |language=en}}{{Cite web |date=2020-09-04 |title=Power surge: the value of investing in renewables - Risk.net |url=https://www.risk.net/commodities/7669676/power-surge-the-value-of-investing-in-renewables |access-date=2023-09-21 |website=www.risk.net |language=en}} For example, a dammed hydro plant might only generate when prices are high and so have a capture rate of 200%, whereas a source that is not dispatchable, such as a wind farm without batteries, would typically have a capture rate under 100%.

Typically, the more of a single type of renewable that is built in a pricing area (such as Great Britain) the lower the capture rate will become for that type. For example, if many wind farms generate a lot at the same time the price at that time will go down. There can be curtailment if grid connectivity is lacking across the pricing area – for example from wind power in Scotland to consumers in England – resulting in the capture rate not reflecting the true cost.

While calculating costs, several internal cost factors have to be considered.

[http://www.ukerc.ac.uk/publications/a-review-of-electricity-unit-cost-estimates.html A Review of Electricity Unit Cost Estimates]

Working Paper, December 2006 – Updated May 2007 {{cite web |url=http://www.ukerc.ac.uk/Downloads/PDF/07/0706_TPA_A_Review_of_Electricity.pdf |title=A Review of Electricity Unit Cost Estimates |access-date=6 October 2009 |archive-url=https://web.archive.org/web/20100108013039/http://www.ukerc.ac.uk/Downloads/PDF/07/0706_TPA_A_Review_of_Electricity.pdf |archive-date=8 January 2010 |url-status=dead }}

Note the use of "costs," which is not the actual selling price, since this can be affected by a variety of factors such as subsidies and taxes:

• Capital costs tend to be low for gas and oil power stations; moderate for onshore wind turbines and solar PV (photovoltaics); higher for coal plants and higher still for waste-to-energy, wave and tidal, solar thermal, offshore wind and nuclear.
• Fuel costs – high for fossil fuel and biomass sources, low for nuclear, and zero for many renewables. Fuel costs can vary somewhat unpredictably over the life of the generating equipment, due to political and other factors.

To evaluate the total cost of production of electricity, the streams of costs are converted to a net present value using the time value of money. These costs are all brought together using discounted cash flow.{{cite web|url=http://www.claverton-energy.com/killer-wind-graphs.html |title=Cost of wind, nuclear and gas powered generation in the UK |website=Claverton-energy.com |access-date=4 September 2012}}{{cite web|url=http://www.claverton-energy.com/energy-experts-library/downloads/windenergy |title=David Millborrows paper on wind costs |website=Claverton-energy.com |access-date=4 September 2012}}

For power generation capacity capital costs are often expressed as overnight cost per kilowatt. Estimated costs are:

Real life costs can diverge significantly from those estimates. Olkiluoto block 3, which achieved first criticality in late 2021 had an overnight cost to the construction consortium (the utility paid a fixed price agreed to when the deal was signed of only 3.2 billion euros) of {{€|8.5 billion}} and a net electricity capacity of 1.6 GW or {{€|5310}} per kW of capacity.{{Cite web|url=https://nuklearia.de/2022/03/09/olkiluoto-3-finnlands-epr-geht-ans-netz/|title=Olkiluoto 3: Finnlands EPR geht ans Netz|date=9 March 2022}} Meanwhile Darlington Nuclear Generating Station in Canada had an overnight cost of {{CAD|5.117 billion }} for a net electric capacity of 3512 MW or {{CAD|1457}} per kW of capacity.[http://www.cleanairalliance.org/files/active/0/DarlingtonFOIresults.pdf "Final and Total Capital Costs of the Darlington Nuclear Generating Station"] {{Webarchive|url=https://web.archive.org/web/20120422220759/http://www.cleanairalliance.org/files/active/0/DarlingtonFOIresults.pdf |date=22 April 2012 }}, Ontario Power Generation, 27 April 2004.

The oft cited figure of {{CAD|14.319 billion }} – which works out to {{CAD|4077}} per kW of capacity – includes interest (a particularly high cost in this case as the utility had to borrow at market rates and had to absorb the cost of delays in construction) and is thus not an "overnight cost". Furthermore, there is the issue of comparability of different sources of power, as capacity factors can be as low as 10–20% for some wind and solar applications reaching into the 50% range for offshore wind and finally above 90% for the most reliable nuclear power plants.{{Cite web|url=https://nuclear.duke-energy.com/2021/05/18/capacity-factor-it-s-a-measure-of-reliability|title = Capacity factor – it's a measure of reliability}}

The average capacity factor of all commercial nuclear power plants in the world in 2020 was 80.3% (83.1% the prior year) but this includes outdated Generation II nuclear power plants and countries like France which run their nuclear power plants load following which reduces the capacity factor.{{cite report |title=World Nuclear Performance Report 2021 |publisher=World Nuclear Association |date=September 2021 |id=Report No. 2021/003 |url=https://www.world-nuclear.org/getmedia/891c0cd8-2beb-4acf-bb4b-552da1696695/world-nuclear-performance-report-2021.pdf.aspx}} Peaking power plants have particularly low capacity factors but make up for it by selling electricity at the highest possible price when supply does not meet demand otherwise.{{Cite web|url=https://www.kcet.org/redefine/explainer-base-load-and-peaking-power|title=Explainer: Base Load and Peaking Power|date=5 July 2012}}

The first German Offshore Wind Park Alpha Ventus Offshore Wind Farm with a nameplate capacity of 60 MW cost {{€|2 million}}, after an initial estimate of {{€|10 million}}.{{cite press release |date=July 15, 2009|title=Deutschland geht offshore: EWE, E.ON und Vattenfall errichten erste Windkraftanlage für alpha ventus |trans-title=Germany goes offshore: EWE, E.ON and Vattenfall build the first wind turbine for alpha ventus |language=de |publisher=alpha ventus |url=https://www.offshore-stiftung.de/sites/offshorelink.de/files/pictures/PM%20Errichtung%20der%20ersten%20Offshore-Windkraftanlage.pdf}} In 2012, it produced 268 GWh of electricity, achieving a capacity factor of just over 50%.{{Cite web|url=https://www.iwr.de/news/offshore-windpark-alpha-ventus-produziert-2012-deutlich-ueber-dem-soll-news23536|title = Offshore-Windpark alpha ventus produziert 2012 deutlich über dem Soll}} If the overnight cost is calculated for the nameplate capacity, it works out to {{€|4167}} per kW whereas if one takes into account the capacity factor, the figure needs to be roughly doubled.

Geothermal power is unique among renewables in that it usually has a low above-ground impact and is capable of baseload power generation as well as combined heat and power. However, depending on the plant and conditions underground naturally occurring radioactive materials such as radon may be released into the air.{{cite conference|author1=David L. Battye |author2=Peter J. Ashman |title=Radiation associated with Hot Rock geothermal power |conference=Australian Geothermal Energy Conference 2009 |url=https://www.geothermal-energy.org/pdf/IGAstandard/AGEC/2009/Battye__Ashman_2009.pdf}} This partially offsets relatively high costs per capacity which were cited as {{USD|200 million}} for the 45 MW first phase of Þeistareykir Geothermal Power Station and a total of {{USD|330 million}} for the 90 MW combined two first phases. This gives a cost per kW of capacity of {{USD|4444}} if only the first phase is considered and {{USD|3667}} if the cost estimates for both phases together hold.{{Cite web|url=https://askjaenergy.com/2017/11/18/theistareykir-geothermal-station-in-operation/|title=Þeistareykir geothermal station in operation|date=18 November 2017}} The source also calls this power plant uniquely cost effective for geothermal power and the unique geology of Iceland makes the country one of the largest producers of geothermal power worldwide and by far the largest per capita or relative to all energy consumed.

Block 5 of Irsching Power Station in Southern Germany uses natural gas as fuel in a combined cycle, converting 1,750 megawatts of thermal energy to 847 net MW of usable electricity. It cost {{€|450 million}} to build.{{cite web |url=http://web.lib.hse.fi/FI/yrityspalvelin/pdf/2006/Esiemens2006.pdf |archive-url=https://web.archive.org/web/20170122184749/http://web.lib.hse.fi/FI/yrityspalvelin/pdf/2006/Esiemens2006.pdf |archive-date=22 January 2017 |title=Siemens Annual Review 2006 |page=2}} This works out to some {{€|531}} per kW of capacity. However, due to the uneconomical prospect of operating it as a peaking power plant, the owners, soon after opening the plant in 2010, wanted to shut down the plant.{{Cite news|url=https://www.welt.de/wirtschaft/energie/article114202846/Stadtwerke-fordern-Gaskraftwerk-Abschaltung.html |title=Energiewende: Stadtwerke fordern Gaskraftwerk-Abschaltung |newspaper=Die Welt |date=7 March 2013 |last1=Vitzthum |first1=Thomas}}

The LCOE of floating wind power increases with the distance from shore.{{cite journal |last1=Martinez |first1=A. |last2=Iglesias |first2=G. |title=Mapping of the levelised cost of energy for floating offshore wind in the European Atlantic |journal=Renewable and Sustainable Energy Reviews |date=February 2022 |volume=154 |pages=111889 |doi=10.1016/j.rser.2021.111889 |s2cid=244089510 |doi-access=free |bibcode=2022RSERv.15411889M }}

The Lieberose Photovoltaic Park – one of the largest in Germany – had a nameplate capacity at opening of 52.79 megawatt and cost some {{€|160 million}} to build{{cite web |url=http://www.solarpark-lieberose.de/zahlen/default.html |title=Solarpark Lieberose in Zahlen |website=www.solarpark-lieberose.de |access-date=27 April 2022 |archive-url=https://web.archive.org/web/20140108150010/http://www.solarpark-lieberose.de/zahlen/default.html |archive-date=8 January 2014 |url-status=dead}}{{cite web | url=https://www.photovoltaik-guide.de/groesstes-solarkraftwerk-in-deutschland-eroeffnet-5274 | title=Größtes Solarkraftwerk in Deutschland eröffnet [5274] | date=22 September 2018 }} or {{€|3031}} per kW. With a yearly output of some 52 GWh (equivalent to just over 5.9 MW) it has a capacity factor just over 11%. The {{€|160 million}} figure was again cited when the solar park was sold in 2010.{{cite web | url=https://www.pv-magazine.de/2010/03/31/juwi-verkauft-solarpark-lieberose/ | title=Juwi verkauft Solarpark Lieberose | date=30 March 2010 }}

The world's largest solar farm to date (2022) in Rajasthan, India – Bhadla Solar Park – has a total nameplate capacity of 2255 MW and cost a total of 98.5 billion Indian rupees to build.{{cite web | url=https://www.nsenergybusiness.com/projects/bhadla-solar-park-rajasthan/ | title=Bhadla Solar Park, Jodhpur District, Rajasthan, India }} This works out to roughly 43681 rupees ({{€|480}}) per kW.

As can be seen by these numbers, costs vary wildly even for the same source of electricity from place to place or time to time and depending on whether interest is included in total cost. Furthermore, capacity factors and the intermittency of certain power sources further complicate calculations. Another issue that is often omitted in discussions is the lifespan of various power plants – some of the oldest hydropower plants have existed for over a century, and nuclear power plants going on five or six decades of continuous operation are no rarity. However, many wind turbines of the first generation have already been torn down as they can no longer compete with more modern wind turbines and/or no longer fit into the current regulatory environment.{{Citation needed|date=April 2022}} Some of them were not even twenty-five years old. Solar panels exhibit a certain aging, which limits their useful lifetime, but real world data does not yet exist for the expected lifetime of the latest models.

O&M costs include marginal costs of fuel, maintenance, operation, waste storage, and decommissioning for an electricity generation facility. Fuel costs tend to be highest for oil fired generation, followed in order by coal, gas, biomass and uranium. Due to the high energy density of uranium (or MOX fuel in plants that use this alternative to uranium) and the comparatively low price on the world uranium market (especially when measured in units of currency per unit of energy content), fuel costs only make up a fraction of the operating costs of nuclear power plants. In general, the cost balance between capital and running costs tilts in favor of lower operating expenses for renewables and nuclear and in the other direction for fossil fuels.

As sovereign debt in high income countries is usually to be had at lower interest rates than private loans, nuclear and renewable power become significantly cheaper – also compared to fossil alternatives – the bigger the involvement of state investment or state guarantees. In the Global South, where interest rates tend to be higher, the shorter construction period of small scale projects (particularly wind and solar) partially compensates for their increased capital cost. In terms of import substitution, solar can be particularly attractive in replacing bunker oil or diesel generators for rural electrification as it needs no imported hydrocarbons and as it allows hydrocarbon resources (where available) to be exported instead.{{cite web|title=Sustainable Rural Electrification |work=GSDR 2015 Brief|author1=Darci Pauser|author2=Kaira Fuente|author3=Mamadou Djerma |url=https://sustainabledevelopment.un.org/content/documents/5759Sustainable%20rural%20electrification.pdf}}{{cite journal |last1=Schwartzman |first1=David |last2=Schwartzman |first2=Peter |title=A Rapid Solar Transition is not only Possible, it is Imperative! |journal=African Journal of Science, Technology, Innovation and Development |date=August 2013 |volume=5 |issue=4 |pages=297–302 |doi=10.1080/20421338.2013.809260 |s2cid=129118869 }}

Short-term fluctuations in fuel prices can have significant effects on the cost of energy generation in natural gas and oil fired power plants and to a lesser extent for coal fired power plants. As renewable energies need no fuel, their costs are independent of world markets for fuels once built. Coal-fired power plants are often supplied with locally or at least domestically available coal – this is especially true for lignite whose low grade and high moisture content make transporting it over long distances uneconomical – and are thus less subject to the influence of world markets. If there is a carbon tax or other forms of CO₂-pricing, this can have a significant impact on the economic viability of fossil fueled power plants. Due to the ease of stockpiling uranium and the rarity of refueling (most Pressurized Water Reactors will change about a quarter to a third of their fuel loading every one and a half to two years{{Cite web |url=https://nei.org/news/2020/why-refuel-plant-during-pandemic|title=Why Refuel a Nuclear Reactor Now?|date=April 2020 }}{{cite web |title=Reactor Refueling |website=Nuclear Power |url=https://www.nuclear-power.com/nuclear-power-plant/nuclear-reactor/reactor-refueling/}}), short term fluctuations in world uranium prices are a risk absorbed by fuel suppliers, not power plant operators. However, long-term trends in uranium price can have an effect of a few tenths of a cent to a cent or two per kilowatt-hour on the final price of nuclear energy.{{Cite web|url=https://world-nuclear.org/information-library/economic-aspects/economics-of-nuclear-power.aspx|title = Nuclear Power Economics | Nuclear Energy Costs - World Nuclear Association}}

The biggest factor in the operating costs of both nuclear and renewable are local wages – in most cases those need to be paid regardless of whether the plant is operating at full capacity or putting out only a fraction of its nameplate capacity and thus those plants are usually run to as high a fraction of their capacity as the market (negative prices) and weather (avoiding overheating rivers with cooling water, availability of sun or wind...) allow.{{Cite web|url=https://www.powermag.com/benchmarking-nuclear-plant-operating-costs/|title = Benchmarking Nuclear Plant Operating Costs|date = November 2009}}{{Cite web|url=http://large.stanford.edu/courses/2018/ph241/wang-k2/|title = Nuclear Power Economic Costs}}

However, in France the nuclear power plants which provide some 70% of electricity demand are run load following to stabilize the grid. As a lot of home heating in France is supplied via electric means (heat pumps and resistive heating), there is a notable seasonality to nuclear energy generation in France with planned outages usually scheduled for the lower demand summer period, which also coincides with school holidays in France.{{Cite web|url=https://www.tagesschau.de/wirtschaft/technologie/windkraft-abbau-windraeder-foerderung-ausgelaufen-eeg-101.html|title=Der Strombedarf steigt, doch alte Windräder werden abmontiert}}

In Germany some two decades old and older wind turbines were shut down after no longer receiving renewable energy subsidies due to a reported market-rate electricity price of some {{€|0.03}} per kWh not covering marginal costs or only covering them as long as no major maintenance was needed.{{Cite web|url=https://www.tagesschau.de/wirtschaft/technologie/windkraft-abbau-windraeder-foerderung-ausgelaufen-eeg-101.html|title=Der Strombedarf steigt, doch alte Windräder werden abmontiert}} By contrast after being fully depreciated, Germany's (then remaining) nuclear power plants were described in media reports throughout the 2010s and into the early 2020s as highly profitable for their operators even without direct government subsidy.{{Cite news|url=https://www.tagesspiegel.de/wirtschaft/laufzeitverlaengerung-schwarz-gelb-setzt-auf-milliarden-der-akw-betreiber/1607730.html|title = Schwarz-Gelb setzt auf Milliarden der AKW-Betreiber|newspaper = Der Tagesspiegel Online|date = 29 September 2009}}{{Cite web|url=https://www.n-tv.de/wirtschaft/Sollten-Kernkraftwerke-weiter-betreiben-article22927032.html|title = "Sollten Kernkraftwerke weiter betreiben"}}{{Cite news|url=https://www.faz.net/aktuell/wirtschaft/wirtschaftswissen/atomkraftwerke-staat-soll-laufzeiten-versteigern-statt-verschenken-1579283.html|title = Atomkraftwerke: Staat soll Laufzeiten versteigern statt verschenken|newspaper = Faz.net|last1 = Frondel|first1 = Manuel}}

Many scholars, such as Paul Joskow, have described limits to the "levelized cost of electricity" metric for comparing new generating sources. In particular, LCOE ignores time effects associated with matching production to demand. This happens at two levels:

• Dispatchability, the ability of a generating system to come online, go offline, or ramp up or down, quickly as demand swings.
• The extent to which the availability profile matches or conflicts with the market demand profile.

Ramp rates, how fast the power can be increased or decreased, may be quicker for more modern nuclear and the economics of nuclear power plants differ.{{cite news |title=(Xenon-135) Response to Reactor Power Changes |website=Nuclear-Power.net |url=https://www.nuclear-power.net/nuclear-power/reactor-physics/reactor-operation/xenon-135/#Response_to_Reactor_Power_Changes |access-date=8 August 2019 }}{{cite news |title=Molten Salt Reactors |date=December 2018 |publisher=World Nuclear Association |url=https://world-nuclear.org/information-library/current-and-future-generation/molten-salt-reactors.aspx |access-date=8 August 2019 |quote=MSRs have large negative temperature and void coefficients of reactivity, and are designed to shut down due to expansion of the fuel salt as temperature increases beyond design limits. . . . The MSR thus has a significant load-following capability where reduced heat abstraction through the boiler tubes leads to increased coolant temperature, or greater heat removal reduces coolant temperature and increases reactivity.}}

Nevertheless, capital intensive technologies such as wind, solar, and nuclear are economically disadvantaged unless generating at maximum availability since the LCOE is nearly all sunk-cost capital investment. Grids with very large amounts of intermittent power sources, such as wind and solar, may incur extra costs associated with needing to have storage or backup generation available.{{cite journal |last1=Joskow |first1=Paul L |title=Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies |journal=American Economic Review |date=1 May 2011 |volume=101 |issue=3 |pages=238–241 |doi=10.1257/aer.101.3.238 |url=http://cadmus.eui.eu/bitstream/handle/1814/18239/RSCAS_2011_45.pdf?sequence=1 }} At the same time, intermittent sources can be even more competitive if they are available to produce when demand and prices are highest, such as solar during summertime mid-day peaks seen in hot countries where air conditioning is a major consumer.{{cite journal

|doi=10.1016/j.rser.2011.07.104 |title=A Review of Solar Photovoltaic Levelized Cost of Electricity |year=2011 |last1=Branker |first1=K. |last2=Pathak |first2=M.J.M. |last3=Pearce |first3=J.M. |journal=Renewable and Sustainable Energy Reviews |volume=15 |issue=9 |pages=4470–4482 |bibcode=2011RSERv..15.4470B |s2cid=73523633 |url=https://digitalcommons.mtu.edu/materials_fp/28 |hdl=1974/6879 |hdl-access=free }} [http://hdl.handle.net/1974/6879 Open access]

Another limitation of the LCOE metric is the influence of energy efficiency and conservation (EEC).{{cite web|last1=Bronski |first1=Peter |title=You Down With LCOE? Maybe You, But Not Me:Leaving behind the limitations of levelized cost of energy for a better energy metric |url=http://blog.rmi.org/blog_2014_05_29_you_down_with_lcoe |website=RMI Outlet |publisher=Rocky Mountain Institute (RMI) |access-date=28 October 2016 |archive-url=https://web.archive.org/web/20161028152421/http://blog.rmi.org/blog_2014_05_29_you_down_with_lcoe |archive-date=28 October 2016 |date=29 May 2014 |quote=Desirable shifts in how we as a nation and as individual consumers—whether a residential home or commercial real estate property—manage, produce, and consume electricity can actually make LCOE numbers look worse, not better. This is particularly true when considering the influence of energy efficiency...If you're planning a new, big central power plant, you want to get the best value (i.e., lowest LCOE) possible. For the cost of any given power-generating asset, that comes through maximizing the number of kWh it cranks out over its economic lifetime, which runs exactly counter to the highly cost-effective energy efficiency that has been a driving force behind the country's flat and even declining electricity demand. On the flip side, planning new big, central power plants without taking continued energy efficiency gains (of which there's no shortage of opportunity—the February 2014 UNEP Finance Initiative report Commercial Real Estate: Unlocking the energy efficiency retrofit investment opportunity identified a $231–$300 billion annual market by 2020) into account risks overestimating the number of kWh we'd need from them and thus lowballing their LCOE... If I'm a homeowner or business considering purchasing rooftop solar outright, do I care more about the per-unit value (LCOE) or my total out of pocket (lifetime system cost)?...The per-unit value is less important than the thing considered as a whole...LCOE, for example, fails to take into account the time of day during which an asset can produce power, where it can be installed on the grid, and its carbon intensity, among many other variables. That's why, in addition to [levelized avoided cost of energy (LACE)], utilities and other electricity system stakeholders...have used benefit/cost calculations and/or an asset's capacity value or contribution to peak on a system or circuit level. |url-status=dead }}{{Better source needed|reason=old - is the sentence still true?|date=February 2022}}

In the 2010s EEC caused the electricity demand of many countries, such as the US,{{Cite web|title=U.S. electricity consumption 2020|url=https://www.statista.com/statistics/201794/us-electricity-consumption-since-1975/|access-date=2022-02-23|website=Statista|language=en}} to remain flat or decline.{{Cite web|title=Energy Efficiency 2019 – Analysis|url=https://www.iea.org/reports/energy-efficiency-2019|access-date=2022-02-23|website=IEA|date=15 November 2019 |language=en-GB}}{{Cite web|title=Electricity – World Energy Outlook 2019 – Analysis|url=https://www.iea.org/reports/world-energy-outlook-2019/electricity|access-date=2022-02-23|website=IEA|language=en-GB}} For solar systems installed at the point of end use, it may be more economical to invest in EEC first, then solar, or both at the same time.{{cite journal |last1=D'Agostino |first1=Delia |last2=Parker |first2=Danny |last3=Melià |first3=Paco |last4=Dotelli |first4=Giovanni |title=Optimizing photovoltaic electric generation and roof insulation in existing residential buildings |journal=Energy and Buildings |date=January 2022 |volume=255 |pages=111652 |doi=10.1016/j.enbuild.2021.111652 |s2cid=243838932 |doi-access=free |bibcode=2022EneBu.25511652D |hdl=11311/1197905 |hdl-access=free }} This results in a smaller required solar system than what would be needed without the EEC measures. However, designing a solar system on the basis of LCOE would cause the smaller system LCOE to increase, as the energy generation drops faster than the system cost.{{Clarify|date=February 2022}}

The whole of system life cycle cost should be considered, not just the LCOE of the energy source. LCOE is not as relevant to end-users than other financial considerations such as income, cashflow, mortgage, leases, rent, and electricity bills. Comparing solar investments in relation to these can make it easier for end-users to make a decision, or using cost-benefit calculations "and/or an asset's capacity value or contribution to peak on a system or circuit level".

{{See also|Environmental impact of the energy industry|Economics of nuclear power plants}}

Typically pricing of electricity from various energy sources may not include all external costs – that is, the costs indirectly borne by society as a whole as a consequence of using that energy source. These may include enabling costs, environmental impacts, energy storage, recycling costs, or beyond-insurance accident effects.

Solar panel performance is usually guaranteed for 25 years and sometimes 30.{{Cite web |title=Solar panel warranty explained |url=https://www.cleanenergyreviews.info/solar-panel-warranty |access-date=2022-03-19 |website=CLEAN ENERGY REVIEWS |language=en-US}} According to a 2021 Harvard Business Review study costs of recycling solar panels will reach $20–30 per panel in 2035, which would increase the LCOE fourfold for PV solar power but only if panels are replaced after 15 years rather than the expected 30 years. If panels are replaced early this presents a significant policy challenge because if the recycling is made legal duty of the manufacturers (as it already is in the EU) it will dramatically reduce profit margins on this already competitive market.{{cite news |last1=Atasu |first1=Atalay |last2=Duran |first2=Serasu |last3=Wassenhove |first3=Luk N. Van |title=The Dark Side of Solar Power |url=https://hbr.org/2021/06/the-dark-side-of-solar-power |work=Harvard Business Review |date=18 June 2021 }}

A 2021 IEA study of repairing old panels to reuse rather than recycle them concluded that the financial viability depends on country specific factors such as grid tariffs, but that reuse is only likely for utility solar, as rooftop owners will want to make best use of space with more efficient new panels.{{Cite web |date=2021 |title=Preliminary Environmental and Financial Viability Analysis of Circular Economy Scenarios for Satisfying PV System Service Lifetime |url=https://iea-pvps.org/wp-content/uploads/2021/11/IEA_PVPS_T12_Preliminary-EnvEcon-Analysis-of-module-reuse_2021_report.pdf}}

A 1995 to 2005 EU funded research study known as ExternE, or Externalities of Energy, found that the cost of producing electricity from coal or oil would double over its present value, and the cost of electricity production from gas would increase by 30% if external costs such as damage to the environment and to human health, from the particulate matter, nitrogen oxides, chromium VI, river water alkalinity, mercury poisoning and arsenic emissions produced by these sources, were taken into account. It was estimated in the study that these external, downstream, fossil fuel costs amount up to 1–2% of the EU's entire Gross Domestic Product (GDP), and this was before the external cost of global warming from these sources was even included.{{cite web |url=http://www.ier.uni-stuttgart.de/forschung/projektwebsites/newext/externen.pdf |title=New research reveals the real costs of electricity in Europe |access-date=10 May 2019 |archive-url=https://web.archive.org/web/20150924032925/http://www.ier.uni-stuttgart.de/forschung/projektwebsites/newext/externen.pdf |archive-date=24 September 2015 |url-status=dead }}[http://www.externe.info/externe_2006/exterpols.html ExternE-Pol, External costs of current and advanced electricity systems, associated with emissions from the operation of power plants and with the rest of the energy chain, final technical report.] See figure 9, 9b and figure 11

Coal has the highest external cost in the EU, and global warming is the largest part of that cost."[http://ec.europa.eu/energy/studies/doc/20141013_subsidies_costs_eu_energy.pdf Subsidies and costs of EU energy. Project number: DESNL14583]" Pages: 52. EcoFys, 10 October 2014. Accessed: 20 October 2014. Size: 70 pages in 2MB. Sustainable energy avoids or greatly reduces future costs to society, such as respiratory illnesses.{{Cite web|date=2021|title=Health Indicators of sustainable energy|url=https://cdn.who.int/media/docs/default-source/environment-climate-change-and-health/sustainable-development-indicator-energy.pdf?sfvrsn=468084e7_2|website=World Health Organization|quote=.... electric power generation based on the inefficient combustion of coal and diesel fuel [causes] air pollution and climate change emissions.}}{{cite journal |last1=Kushta |first1=Jonilda |last2=Paisi |first2=Niki |last3=Van Der Gon |first3=Hugo Denier |last4=Lelieveld |first4=Jos |title=Disease burden and excess mortality from coal-fired power plant emissions in Europe |journal=Environmental Research Letters |date=1 April 2021 |volume=16 |issue=4 |pages=045010 |doi=10.1088/1748-9326/abecff |bibcode=2021ERL....16d5010K |s2cid=233580803 |doi-access=free }} In 2022 the EU created a green taxonomy to indicate which energy investments reduce such external costs.

A means to address a part of the external costs of fossil fuel generation is carbon pricing — the method most favored by economists for reducing global-warming emissions.{{Cite web|date=2020-11-09|title=Carbon pricing – the one thing economists agree on - KPMG United Kingdom|url=https://home.kpmg/uk/en/home/insights/2020/08/carbon-pricing-the-one-thing-economists-agree-on.html|access-date=2021-09-26|website=KPMG|language=en-GB|archive-date=26 September 2021|archive-url=https://web.archive.org/web/20210926173221/https://home.kpmg/uk/en/home/insights/2020/08/carbon-pricing-the-one-thing-economists-agree-on.html|url-status=dead}} Carbon pricing charges those who emit carbon dioxide for their emissions. That charge, called a "carbon price", is the amount that must be paid for the right to emit one tonne of carbon dioxide into the atmosphere. Carbon pricing usually takes the form of a carbon tax or a requirement to purchase permits to emit (also called "allowances").

Depending on the assumptions of possible accidents and their probabilities external costs for nuclear power vary significantly and can reach between 0.2 and 200 ct/kWh.Viktor Wesselak, Thomas Schabbach, Thomas Link, Joachim Fischer: Regenerative Energietechnik. Springer 2013, {{ISBN|978-3-642-24165-9}}, p. 27. Furthermore, nuclear power is working under an insurance framework that limits or structures accident liabilities in accordance with the Paris convention on nuclear third-party liability, the Brussels supplementary convention, and the Vienna convention on civil liability for nuclear damage[http://www.iaea.org/Publications/Documents/Conventions/liability.html Publications: Vienna Convention on Civil Liability for Nuclear Damage]. International Atomic Energy Agency. and in the U.S. the Price-Anderson Act. It is often argued that this potential shortfall in liability represents an external cost not included in the cost of nuclear electricity; but the cost is small, amounting to about 0.1% of the levelized cost of electricity, according to a 2008 study.[http://www.cbo.gov/sites/default/files/05-02-nuclear.pdf Nuclear Power's Role in Generating Electricity] Congressional Budget Office, May 2008.

These beyond-insurance costs for worst-case scenarios are not unique to nuclear power, as hydroelectric power plants are similarly not fully insured against catastrophic events like a large dam failure. As private insurers base dam insurance premiums on limited scenarios, major disaster insurance in this sector is likewise provided by the state.[http://www.damsafety.org/media/Documents/FEMA/AvailabilityOfDamInsurance.pdf Availability of Dam Insurance] {{webarchive|url=https://web.archive.org/web/20160108185336/http://www.damsafety.org/media/documents/fema/availabilityofdaminsurance.pdf |date=8 January 2016 }} 1999{{Better source needed|reason=old|date=February 2022}}

Because externalities are diffuse in their effect, external costs cannot be measured directly, but must be estimated.

Different countries charge generating companies differently for the negative externalities (such as pollution) that they create. To avoid unfair competition from imports of dirty electricity a tariff may be applied. For example, the UK and the EU may include electricity in their Carbon Border Adjustment Mechanisms.{{Cite web|url=https://committees.parliament.uk/committee/62/environmental-audit-committee/news/159393/what-impact-could-a-cbam-have-on-energy-intensive-sectors/|title=What impact could a CBAM have on energy intensive sectors?|website=Committees.parliament.uk|access-date=22 February 2022}} Alternatively the emissions trading systems (ETS) of the importing and exporting countries may be linked,{{Cite web|date=2022-01-09|title=Brexit decision left UK firms paying 10% more than EU rivals for emissions|url=https://www.theguardian.com/environment/2022/jan/09/brexit-decision-left-uk-firms-paying-10-more-than-eu-rivals-for-emissions|access-date=2022-02-06|website=the Guardian|language=en}} or the generators in one country may be subject to the ETS of another country (for example Northern İreland generators are in the EU ETS).{{Cite web|last=Taylor|first=Kira|date=2022-01-31|title=Europe's carbon border levy could pose another post-Brexit challenge for Ireland|url=https://www.euractiv.com/section/energy-environment/news/europes-carbon-border-levy-could-pose-another-post-brexit-challenge-for-ireland/|access-date=2022-02-06|website=Euractiv.com|language=en-GB}}

Calculations often do not include wider system costs associated with each type of plant, such as long-distance transmission connections to grids, or balancing and reserve costs. Calculations do not necessarily include externalities such as health damage by coal plants, nor the effect of greenhouse emissions on the climate change, ocean acidification and eutrophication, ocean current shifts. Decommissioning costs of power plants are usually not included, is therefore not full cost accounting. Nuclear power plants in the United States are an exception, because the cost of decommissioning is included in the price of electricity per the Nuclear Waste Policy Act. These types of items can be explicitly added as necessary, depending on the purpose of the calculation.

Other non-financial factors may include:

• Comparisons of life-cycle greenhouse gas emissions show coal, for instance, to be radically higher in terms of GHGs than any alternative.
• Surface power density measures power per unit surface area using given technology, and can vary by several orders of magnitude between high- and low-density sources. Surface power density is a significant limiting factor in countries with high population density.
• Impacts on wildlife include an estimated 888,000 bats killed annually by collision with U.S. wind turbines.{{cite journal |last1=Smallwood |first1=K. Shawn |title=Comparing bird and bat fatality-rate estimates among North American wind-energy projects |journal=Wildlife Society Bulletin |date=March 2013 |volume=37 |issue=1 |pages=19–33 |doi=10.1002/wsb.260 |bibcode=2013WSBu...37...19S }} Millions of birds are estimated to be killed or electrocuted each year by collision with high-voltage power lines and pylons,{{Cite web |date=2021-01-26 |title=How Many Birds Are Killed by Wind Turbines? |url=https://abcbirds.org/blog21/wind-turbine-mortality/ |access-date=2022-03-05 |website=American Bird Conservancy |language=en}} and millions more by fossil fuel power plants.{{Cite web|title=PolitiFact - Solar farms kill thousands of birds, but not as many as fossil fuel plants|url=https://www.politifact.com/factchecks/2021/aug/17/louie-gohmert/solar-farms-kill-thousands-birds-not-many-fossil-f/|access-date=2022-02-06|website=Politifact.com|language=en-US}}
• Other environmental concerns with electricity generation include acid rain, ocean acidification and effect of coal extraction on watersheds.
• Various human health concerns with electricity generation, including asthma and smog, now dominate decisions in developed nations that incur health care costs publicly.{{Clarify|reason=don't all developed countries incur some heath costs publically?|date=February 2022}} A 2021 study estimated the health costs of coal power at hundreds of billions of dollars for the rest of the decade.{{Cite web|title=New research shows proposed coal expansion will cost major cities USD 877 billion, cause quarter-of-a-million premature deaths, jeopardise climate goals|url=https://www.c40.org/news/new-research-shows-health-and-economic-costs-of-coal-expansion/|access-date=2022-02-06|website=C40 Cities|language=en-GB}}

{{Graph:Chart

| width=600

| height=200

| xAxisTitle=Generation technology

| yAxisTitle=LCOE [$ per MWh]

| type=rect

| xAxisAngle=-40

| legend=Legend

| y1Title=Lazard

| y2Title=BNEF

| y3Title=IRENA

| y4Title=IPCC (2014)

| y5Title=NEA

| x=solar (utility), wind (onshore), natural gas (cc), geothermal, wind (offshore), coal, nuclear, natural gas (peak), storage

| y1=36,40,59,80,86,112,164,175,189

| y2=39,41,,,79,,,,132

| y3=68,53,,73,113,,,,

| y4=110,59,71,60,120,61,65,,

| y5=54,50,92,100,88,114,68,,

| showValues=

}}

File:3-Learning-curves-for-electricity-prices.png

{{clear}}

*LCOE estimates for nuclear power from Lazard are "based on the then-estimated costs of the Vogtle Plant and US-focused".

In 2023, Bank of America conducted a LCOE study in which it postulated that existing LCOE estimates for renewables do not account for fossil fuel or battery backup and therefore levelized full system cost of electricity (LFSCOE){{Cite journal |last=Idel |first=Robert |date=2022-11-15 |title=Levelized Full System Costs of Electricity |url=https://www.sciencedirect.com/science/article/abs/pii/S0360544222018035 |journal=Energy |volume=259 |pages=124905 |doi=10.1016/j.energy.2022.124905 |bibcode=2022Ene...25924905I |issn=0360-5442|url-access=subscription }} would be a more reasonable metric to compare sources in terms of providing firm power (24/365 guarantee of electricity supply without electricity consumers needing to curtail their demand due to high spot prices).{{Cite web |title=BofA: The nuclear necessity |url=https://advisoranalyst.com/2023/05/11/bofa-the-nuclear-necessity.html/ |access-date=2024-01-18 |website=AdvisorAnalyst.com |language=en-CA}}

This study provides a model LFSCOE-95 which assumes 95% of generation is from the stated generation method and 5% is from alternative dispatchable generation methods. Also provided is a model LFSCOE-100 which assumes 100% of generation is from a stated generation method.

In March 2021, Bloomberg New Energy Finance found that "renewables are the cheapest power option for 71% of global GDP and 85% of global power generation. It is now cheaper to build a new solar or wind farm to meet rising electricity demand or replace a retiring generator, than it is to build a new fossil fuel-fired power plant. ... On a cost basis, wind and solar is the best economic choice in markets where firm generation resources exist and demand is growing."{{rp|24}} They further reported "the levelized cost of energy from lithium-ion battery storage systems is competitive with many peak-demand generators."{{rp|23}} BNEF does not disclose the detailed methodology and LCOE calculation assumptions, however, apart from declaring it is "derived from selected public sources".{{rp|98}} Costs of gas peakers are substantial, and include both the cost of fuel and external costs of its combustion. Costs of its combustion include emission of greenhouse gases carbon monoxide and dioxide, as well as nitrogen oxides ({{NOx}}), which damage the human respiratory system and contribute to acid rain.{{cite web |title=Basic Information About NO₂ |url=https://www.epa.gov/no2-pollution/basic-information-about-no2 |website=United States Environmental Protection Agency |date=6 July 2016 |access-date=23 February 2022}}

In December 2020, IEA and OECD NEA published a joint Projected Costs of Generating Electricity study which looks at a very broad range of electricity generating technologies based on 243 power plants in 24 countries. The primary finding was that "low-carbon generation is overall becoming increasingly cost competitive" and "new nuclear power will remain the dispatchable low-carbon technology with the lowest expected costs in 2025". The report calculated LCOE with assumed 7% discount rate and adjusted for systemic costs of generation.{{Cite web |date=9 December 2020 |title=Low-carbon generation is becoming cost competitive, NEA and IEA say in new report |url=https://www.oecd-nea.org/jcms/pl_51126/low-carbon-generation-is-becoming-cost-competitive-nea-and-iea-say-in-new-report |access-date=2021-06-23 |website=Nuclear Energy Agency (NEA) |language=en}} The report also contains a modeling utility that produces LCOE estimates based on user-selected parameters such as discount rate, carbon price, heat price, coal price and gas price.{{Cite web|title=Levelised Cost of Electricity Calculator – Analysis|url=https://www.iea.org/articles/levelised-cost-of-electricity-calculator|access-date=2021-10-29|website=IEA|language=en-GB}} The report's main conclusions:{{Cite web|title=Projected Costs of Generating Electricity 2020 – Analysis|url=https://www.iea.org/reports/projected-costs-of-generating-electricity-2020|access-date=2021-10-29|website=IEA|date=9 December 2020 |language=en-GB}}

• LCOE of specific energy sources significantly differs between countries due to their geographic, political and regulatory situation;
• low-carbon energy sources cannot be considered in separation, as they operate in "complex interactions" with each other to ensure reliable supply at all times; IEA analysis captures these interactions in value-adjusted LCOE or VALCOE;
• cost of renewable energy sources significantly decreased and are competitive (in LCOE terms) with dispatchable fossil fuel generation;
• cost of extension of operations of existing nuclear power plants (LTO, long-term operations) has the lowest LCOE of low-carbon energy sources;

In October 2020, the financial firm Lazard compared renewable and conventional sources of energy, including comparison between existing and new generation (see table). Lazard study assumes "60% debt at 8% interest rate and 40% equity at 12% cost" for its LCOE calculation but did not disclose their methodology or project portfolio used to calculate prices.{{cite news |title=Levelized Cost of Energy and Levelized Cost of Storage 2020 |date=19 October 2020 |url=https://www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2020/ |access-date=24 October 2020 |archive-date=20 February 2021 |archive-url=https://web.archive.org/web/20210220121649/https://www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2020/ |url-status=dead }} In the 2023 study Lazard explained their LCOE estimates for nuclear power are "based on the then-estimated costs of the Vogtle Plant and US-focused".

IPCC Fifth Assessment Report contains LCOE calculations{{cite web | url=https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_annex-iii.pdf |title=Annex III: Technology-specific cost and performance parameters. In: Climate Change 2014: Mitigation of Climate Change | publisher=Cambridge University Press | page=1333}} for broad range of energy sources in the following four scenarios:

• 10% WACC, high full load hours (FLH), no carbon tax
• 5% WACC, high FLH, no carbon tax — scenario presented in the above table
• 10% WACC, low FLH, no carbon tax
• 10% WACC, high FLH, $100/tCO2eq carbon tax

In 2020, BNEF{{cite news |title=Scale-up of Solar and Wind Puts Existing Coal, Gas at Risk

|date=28 April 2020 |url=https://about.bnef.com/blog/scale-up-of-solar-and-wind-puts-existing-coal-gas-at-risk/ |access-date=31 May 2020}} estimated the following costs for electricity generation in Australia:{{Cite web|url=https://reneweconomy.com.au/solar-wind-and-battery-storage-now-cheapest-energy-options-just-about-everywhere-95748/|title=Solar, wind and battery storage now cheapest energy options just about everywhere|first=Giles|last=Parkinson|date=28 April 2020|website=Reneweconomy.com.au|access-date=22 February 2022}}

It can be seen from the following table that the cost of renewable energy, particularly photovoltaics, is falling very rapidly. As of 2017, the cost of electricity generation from photovoltaics, for example, has fallen by almost 75% within 7 years.{{cite journal|first=Nancy M.|last=Haegel|display-authors=etal|journal=Science|title=Terawatt-scale photovoltaics: Trajectories and challenges|volume=356 |issue=6334|year=2017|pages=141–143|language=de |doi=10.1126/science.aal1288 |pmid=28408563 |bibcode=2017Sci...356..141H |osti=1352502 |s2cid=206654326 |url=https://www.osti.gov/biblio/1352502|hdl=10945/57762|hdl-access=free}}

In the United Kingdom, a feed-in tariff of £92.50/MWh at 2012 prices (currently the equivalent of €131/MWh)Umrechnung mit Wechselkurs vom 8. September 2022 und UK-Verbraucherpreisindex seit 2012. plus inflation compensation was set in 2013 for the new nuclear power plant to be built at Hinkley Point C, with a term of 35 years. At that time, this was below the feed-in tariff for large photovoltaic and offshore wind plants and above onshore wind plants.{{cite web|title=Electricity Market Reform – Delivery Plan|periodical=|publisher=Department of Energy and Climate Change|url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/268221/181213_2013_EMR_Delivery_Plan_FINAL.pdf|access-date=2014-05-04|last=|date=December 2013|language=|pages=|quote=}}Carsten Volkery: [http://www.spiegel.de/wirtschaft/unternehmen/hinkley-c-grossbritannien-baut-erstes-atomkraftwerk-seit-20-jahren-a-928999.html Kooperation mit China: Großbritannien baut erstes Atomkraftwerk seit Jahrzehnten], In: Spiegel Online 21 October 2013.gov.uk: [https://www.gov.uk/government/collections/hinkley-point-c Hinkley Point C] Contracts for the Hinkley Point C, veröffentlicht 29 September 2016. Retrieved 1 February 2022

In Germany, the bidding processes that have been carried out since 2017 have led to significant cost reductions. In one bid for offshore wind farms, at least one bidder dispensed entirely with public subsidies and was prepared to finance the project through the market alone. The highest subsidy price that was still awarded was 6.00 ct/kWh.{{cite web|title=Ausschreibung Windanlagen auf See|periodical=|publisher=Bundesnetzagentur|url=https://www.bundesnetzagentur.de/DE/Sachgebiete/ElektrizitaetundGas/Unternehmen_Institutionen/Ausschreibungen/Offshore/offshore-node.html|access-date=2021-09-05|last=|date=|year=|language=|pages=|quote=}} In a bid for onshore wind farm projects, an average payment of 5.71 ct/kWh was achieved, and 4.29 ct/kWh in a second bidding round.

In 2019, there were bids for new offshore wind farms in the United Kingdom, with costs as low as 3.96 pence per kWh (4.47 ct).{{citation|surname1=Jillian Ambrose|periodical=The Guardian|title=New windfarms will not cost billpayers after subsidies hit record low|issn=0261-3077|date=2019-09-20|language=German|url=https://www.theguardian.com/environment/2019/sep/20/new-windfarms-taxpayers-subsidies-record-low|access-date=2019-10-03

}}

In 2019, there were bids in Portugal for photovoltaic plants, where the price for the cheapest project is 1.476 ct/kWh.{{cite web|title=Portugal's solar energy auction breaks world record|website=www.euractiv.com|publisher=|url=https://www.euractiv.com/section/energy/news/portugals-solar-energy-auction-breaks-world-record/|format=|access-date=2019-10-03|last=Mike Parr says|date=2019-07-31|language=en-GB|pages=|quote=}}

According to data from the {{Ill|Energy Market Agency|pl|Agencja Rynku Energii}}, provided through the Ministry of Climate and Environment, the levelized technical unit costs of electricity generation by source within the Polish power system {{As of|2024|October|1|alt=for the first three quarters of 2024}} are as follows. These costs account for both fixed and variable costs, including fuel, but exclude costs related to CO₂ emission allowances under the European Union Emissions Trading System (ETS), taxes, and sales costs.

{{static row numbers}}{{sticky header}}{{row hover highlight}}

The publication of data has attracted several comments. Some have expressed concern that the values for renewables do not account for the additional costs associated with the necessary balancing of the system. Some have also noted the dispatchability issues inherent to renewables, which affect their ability to independently support the power grid. In addition, the economics of coal may be negatively impacted by the less frequent operation of coal-fired power plants as a result of the priority given to renewables on the grid.

Others have pointed out that the reported costs for coal do not account for the significant, multi-billion-dollar government subsidies for unprofitable coal mines as part of the government's commitment to a just transition policy. Some have remarked that the reported cost of coal also reflects cheaper imported coal in addition to more expensive domestically produced coal.

{{As of|2022}}, gas is the largest source of electricity at 40%:{{Cite web |title=What is the future of nuclear power in the UK? |url=https://www.theweek.co.uk/news/science-health/955647/what-is-the-future-of-nuclear-power-in-the-uk |access-date=2022-02-23 |website=The Week UK |date=4 February 2022 |language=en}} its cost varies and being high carbon it causes climate change.{{Cite news |date=2022-02-23 |title=Climate change: Can the UK afford its net zero policies? |language=en-GB |work=BBC News |url=https://www.bbc.com/news/science-environment-60489328 |access-date=2022-02-23}} So to reduce the share of gas the government annually auctions contracts for difference to build low-carbon generation capacity, mainly offshore wind.{{Cite web |date=2022-02-09 |title=Contracts for Difference auctions to be held annually in 'major step forwards' for net zero transition |url=https://www.current-news.co.uk/news/contracts-for-difference-auctions-to-be-held-annually-in-major-step-forwards-for-net-zero-transition |access-date=2022-02-23 |website=Current |language=en-gb}} Before 2022 these generators had always received payments from electricity suppliers, but that year they started making payments.{{Cite web |date=2022-01-13 |title=CfD costs to be paid back to electricity suppliers as high wholesale prices continue |url=https://www.current-news.co.uk/news/cfd-costs-to-be-paid-back-to-electricity-suppliers-as-high-wholesale-prices-continue |access-date=2022-02-23 |website=Current |language=en-gb}} In other words renewables became subsidy free,{{Cite web |date=2022-01-14 |title=UK electricity prices quadrupled in 2021 and fossil gas is to blame |url=https://ember-climate.org/commentary/2022/01/14/uk-electricity-prices-fossil-gas/ |access-date=2022-02-23 |website=Ember |language=en-GB}} partly due to the fall in cost of offshore wind.{{Cite web |last=McNally |first=Phil |date=18 February 2022 |title=An Efficient Energy Transition: Lessons From the UK's Offshore Wind Rollout |publisher=Tony Blair Institute |url=https://institute.global/policy/efficient-energy-transition-lessons-uks-offshore-wind-rollout}} Instead of gas still dark weeks can be supplied by Norwegian hydropower{{Cite news |date=2021-10-01 |title=New Britain-Norway power link makes debut as energy prices soar |language=en |work=Reuters |url=https://www.reuters.com/world/uk/new-britain-norway-power-link-makes-debut-energy-prices-soar-2021-09-30/ |access-date=2022-02-23}} or by nuclear. As many of Britain's existing nuclear reactors are due to retire soon the government hopes that cost effective small modular reactors can be developed.

{{Update|section|date=March 2022}}

The International Energy Agency and EDF have estimated the following costs. For nuclear power, they include the costs due to new safety investments to upgrade the French nuclear plant after the Fukushima Daiichi nuclear disaster; the cost for those investments is estimated at €4/MWh. Concerning solar power, the estimate of €293/MWh is for a large plant capable of producing in the range of 50–100 GWh/year located in a favorable location, such as in Southern Europe.

For a small household plant that can produce around 3 MWh/year, the cost is between 400 and €700/MWh, depending on location. Solar power was by far the most expensive renewable source of electricity among the technologies studied, although increasing efficiency and longer lifespan of photovoltaic panels together with reduced production costs have made this source of energy more competitive since 2011. By 2017, the cost of photovoltaic solar power had decreased to less than €50/MWh.

The Fraunhofer Institute for Solar Energy Systems publishes studies comparing the cost of different styles of energy production. The values for PV installations are based on the average cost between Northern and Southern Germany. The reports differentiate between the two and gives more details.{{cite web |title=Study: Levelized Cost of Electricity - Renewable Energy Technologies - Fraunhofer ISE |url=https://www.ise.fraunhofer.de/en/publications/studies/cost-of-electricity.html |publisher=Fraunhofer Institute for Solar Energy Systems ISE |access-date=8 September 2022 |language=en}}

The LCOE for PV battery systems refers to the total amount of energy produced by the PV system minus storage losses. The storage losses are calculated based on the capacity of the battery storage, the assumed number of cycles and the efficiency of the battery. The results include differences in PV costs, battery costs (500 to 1200 EUR/kWh), and varying solar irradiation. For larger rooftop PV systems with battery storage, the battery costs between 600 and 1000 EUR/kWh.

For ground-mounted PV with battery storage systems, investment costs for battery storage of 500 to 700 EUR/kWh were assumed. The prices for smaller systems are in part lower, as these are standardized products, whereas larger battery systems tend to be individualized projects that additionally incur costs for project development, project management, and infrastructure. The range of investment costs is smaller for the larger sizes, as there is more competitive pressure.

The capital investment costs, fixed and variable costs, and the average capacity factor of utility-scale wind and photovoltaic electricity supplies from 2000 to 2018 have been obtained using overall variable renewable electricity production of the countries in the Middle East and 81 examined projects.

{{As of|2021|March}} for projects starting generating electricity in Turkey from renewable energy in Turkey in July feed-in-tariffs in lira per kWh are: wind and solar 0.32, hydro 0.4, geothermal 0.54, and various rates for different types of biomass: for all these there is also a bonus of 0.08 per kWh if local components are used.{{Cite web|last=Olğun|first=Kinstellar-Şeyma|title=New Turkish-Lira tariff scheme for renewable energy projects in Turkey {{!}} Lexology|url=https://www.lexology.com/library/detail.aspx?g=73fa54e4-0571-487b-b532-466c4893c8f6|access-date=2021-02-03|website=Lexology.com|date=February 2021|language=en}} Tariffs will apply for 10 years and the local bonus for 5 years. Rates are determined by the presidency,{{Cite web|title=Amendments In The Law On Utilization Of Renewable Energy Sources For The Purpose Of Generating Electrical Energy - Energy and Natural Resources - Turkey|url=https://www.mondaq.com/turkey/renewables/1014560/amendments-in-the-law-on-utilization-of-renewable-energy-sources-for-the-purpose-of-generating-electrical-energy|access-date=2020-12-21|website=Mondaq.com}} and the scheme replaces the previous USD-denominated feed-in-tariffs for renewable energy.{{Cite report|url=https://www.pwc.com.tr/energy-deals|title=Energy Deals 2019|date=February 2020|publisher=PricewaterhouseCoopers|access-date=4 February 2021|archive-date=12 January 2021|archive-url=https://web.archive.org/web/20210112164833/https://www.pwc.com.tr/energy-deals|url-status=dead}}

{{update section|date=July 2016}}

A 2010 study by the Japanese government (pre-Fukushima disaster), called the Energy White Paper,{{Cite web|date=2021-05-28|title=2010 Annual Report on Energy (Japan's "Energy White Paper 2010") (outline)|url=https://www.meti.go.jp/english/report/downloadfiles/2010_outline.pdf|url-status=live|access-date=2021-10-01|archive-url=https://web.archive.org/web/20160921014702/http://www.meti.go.jp/english/report/downloadfiles/2010_outline.pdf |archive-date=21 September 2016 }} concluded the cost for kilowatt hour was ¥49 for solar, ¥10 to ¥14 for wind, and ¥5 or ¥6 for nuclear power.

In 2011, Masayoshi Son, an advocate for renewable energy, pointed out that the government estimates for nuclear power did not include the costs for reprocessing the fuel or disaster insurance liability. Son estimated that if these costs were included, the cost of nuclear power was about the same as wind power.Johnston, Eric, "[http://search.japantimes.co.jp/cgi-bin/nn20110712i1.html Son's quest for sun, wind has nuclear interests wary]", Japan Times, 12 July 2011, p. 3.Bird, Winifred, "[http://search.japantimes.co.jp/cgi-bin/fl20110724x1.html Powering Japan's future]", Japan Times, 24 July 2011, p. 7.Johnston, Eric, "[http://search.japantimes.co.jp/cgi-bin/nn20110922x3.html Current nuclear debate to set nation's course for decades]", Japan Times, 23 September 2011, p. 1. {{dead link|date=June 2016|bot=medic}}{{cbignore|bot=medic}}

In 2020, the cost of solar in Japan has decreased to between ¥13.1/kWh to ¥21.3/kWh (on average, ¥15.3/kWh, or $0.142/kWh).{{Cite web|title=Solar Power Generation Costs in Japan|url=https://www.renewable-ei.org/pdfdownload/activities/Report_SolarPVCostJapan_EN.pdf|access-date=June 30, 2020|website=Renewable Energy Institute}}

The cost of a solar PV module make up the largest part of the total investment costs. As per the 2021 analysis of Solar Power Generation Costs in Japan, module unit prices fell sharply. In 2018, the average price was close to 60,000 yen/kW, but by 2021 it is estimated at 30,000 yen/kW, so cost is reduced by almost half.

{{Overly detailed|section|date=September 2021}}

Since 2010, the US Energy Information Administration (EIA) has published the Annual Energy Outlook (AEO), with yearly LCOE projections for future utility-scale facilities to be commissioned in about five years' time.

The following data are from the Energy Information Administration's (EIA) Annual Energy Outlook released in 2020 (AEO2020). They are in dollars per megawatt-hour (2019 USD/MWh). These figures are estimates for plants going into service in 2025, exclusive of tax credits, subsidies, or other incentives.{{cite web|url=http://www.eia.gov/forecasts/aeo/electricity_generation.cfm|title=U.S. Energy Information Administration (EIA) – Source|access-date=25 November 2016}} The LCOE below is calculated based on a 30-year recovery period using a real after tax weighted average cost of capital (WACC) of 6.1%. For carbon intensive technologies 3 percentage points are added to the WACC. (This is approximately equivalent to a fee of $15 per metric ton of carbon dioxide {{CO2}}.) Federal tax credits and various state and local incentive programs would be expected to reduce some of these LCOE values. For example, EIA expects the federal investment tax credit program to reduce the capacity weighted average LCOE of solar PV built in 2025 by an additional $2.41, to $30.39.

The electricity sources which had the most decrease in estimated costs over the period 2010 to 2019 were solar photovoltaic (down 88%), onshore wind (down 71%) and advanced natural gas combined cycle (down 49%).

For utility-scale generation put into service in 2040, the EIA estimated in 2015 that there would be further reductions in the constant-dollar cost of concentrated solar power (CSP) (down 18%), solar photovoltaic (down 15%), offshore wind (down 11%), and advanced nuclear (down 7%). The cost of onshore wind was expected to rise slightly (up 2%) by 2040, while natural gas combined cycle electricity was expected to increase 9% to 10% over the period.US Energy Information Administration, [https://www.eia.gov/outlooks/archive/aeo15/electricity_generation.cfm Levelized cost and levelized avoided cost of new generation resources in the Annual Energy Outlook 2015], 14 April 2015

Note: Projected LCOE are adjusted for inflation and calculated on constant dollars based on two years prior to the release year of the estimate.
Estimates given without any subsidies. Transmission cost for non-dispatchable sources are on average much higher.

NB = "Not built" (No capacity additions are expected.)

{{Portal|Energy|Renewable energy}}

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• {{cite journal |last1=Machol |first1=Ben |last2=Rizk |first2=Sarah |title=Economic value of U.S. fossil fuel electricity health impacts |journal=Environment International |date=February 2013 |volume=52 |pages=75–80 |doi=10.1016/j.envint.2012.03.003 |pmid=23246069 |bibcode=2013EnInt..52...75M }}
• [https://www.lazard.com/media/451419/lazards-levelized-cost-of-energy-version-140.pdf Lazard's Levelized Cost of Energy Analysis – Version 14.0] {{Webarchive|url=https://web.archive.org/web/20210128105700/https://www.lazard.com/media/451419/lazards-levelized-cost-of-energy-version-140.pdf |date=28 January 2021 }} (Oct. 2020)

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{{Reflist|

{{cite web |date=13 March 2025 |title=Które źródła energii w Polsce są najtańsze? Ministerstwo dało odpowiedź |trans-title=Which energy sources in Poland are the cheapest? The ministry has provided the answer |url=https://www.gramwzielone.pl/trendy/20306933/ktore-zrodla-energii-w-polsce-sa-najtansze-ministerstwo-dalo-odpowiedz |url-status=live |archive-url=https://web.archive.org/web/20250324165245/https://www.gramwzielone.pl/trendy/20306933/ktore-zrodla-energii-w-polsce-sa-najtansze-ministerstwo-dalo-odpowiedz |archive-date=24 March 2025 |access-date=24 March 2025 |website=Gramwzielone.pl |language=pl}}

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{{environmental effects of energy}}

{{DEFAULTSORT:Cost Of Electricity By Source}}

Category:Late modern economic history

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