Forecasts of LCOE for various energy options for 2015, 2025

Here are some essential resources for analyzing the real world costs and benefits of electrical generation options. 

This is the omnibus study. You will want to download this one for your reference library for sure: Electric Power Research Institute (EPRI ): Program on Technology Innovation: Integrated Generation Technology Options

The Integrated Generation Technology Options report provides an executive-level overview of near-term (5 – 10 years) as well as longer term (2025) electricity generation technology costs and performance. The purpose of this document is to provide a public domain reference for industry executives, policy makers, and other stakeholders. This report is based on 2010 EPRI research results and updates the Integrated Generation Technology Options report published in November 2009. [1] 

EPRI: Generation Technology Options in a Carbon- Constrained World. This slide deck references the above EPRI Report 1022782. Examines the sensitivity of LCOE to carbon prices and forecasts relative costs for 2015 and 2025. Here is the 2025 LCOE sensitivity to cost of CO2:

Click the thumbnail for original size image

How carbon pricing changes the relative competitiveness of low-carbon baseload generating technologies” an excellent meta study of LCOE generation options in Energy Volume 36, Issue 1, January 2011, Pages 305–313 by Martin Nicholson, Tom Biegler, Barry W. Brook. 

There is wide public debate about which electricity generating technologies will best be suited to reduce greenhouse gas emissions (GHG). Sometimes this debate ignores real-world practicalities and leads to over-optimistic conclusions. Here we define and apply a set of fit-for-service criteria to identify technologies capable of supplying baseload electricity and reducing GHGs by amounts and within the timescale set by the Intergovernmental Panel on Climate Change (IPCC). Only five current technologies meet these criteria: coal (both pulverised fuel and integrated gasification combined cycle) with carbon capture and storage (CCS); combined cycle gas turbine with CCS; Generation III nuclear fission; and solar thermal backed by heat storage and gas turbines. To compare costs and performance, we undertook a meta-review of authoritative peer-reviewed studies of levelised cost of electricity (LCOE) and life-cycle GHG emissions for these technologies. Future baseload electricity technology selection will be influenced by the total cost of technology substitution, including carbon pricing, which is synergistically related to both LCOE and emissions. Nuclear energy is the cheapest option and best able to meet the IPCC timetable for GHG abatement. Solar thermal is the most expensive, while CCS will require rapid major advances in technology to meet that timetable.

(…)

4.1. Lowest cost and lowest EI both critical in power generation

Electricity costs impact upon productivity growth, so generating costs need to be kept to a minimum (see Section 1.3). As can be seen from the data in Table 4, the more recent studies show increases in LCOE (excluding any carbon price) which exceed the rise in the CPI over the same period. This might suggest an escalation in future electricity prices over and above any increase from carbon pricing. Increasing costs will slow down the deployment of new low-carbon power plants and risk compromising our ability to achieve the 2050 emission reduction target (see Section 1).


Fig. 1. Levelised cost of electricity (LCOE) for baseload electricity generating technologies. Error bars represent 90% confidence intervals for the mean (bar height).

 

Fig. 2. Emission intensity for fit-for-service baseload electricity generating technologies. Error bars represent 90% confidence intervals for the mean (bar height).


 

Fig. 3. Impact of carbon pricing on levelised cost of electricity (LCOE) for FFS low-emission baseload technologies.

It is very important to recognize that LCOE costs are significantly understated for intermittent, non-dispatchable generation sources, such as wind or solar. It is a complex undertaking to properly analyze the cost of intermittency, and the free market, non-subsidized price of non-dispatchable power. Accurate costing must include the LCOE for the backup dispatchable power, and additional transmission infrastructure required to ship intermittent power from remote geographies to the locations of demand. 

One source I can recommend is the Joskow discussion paper. He recognizes the complexities, concluding his analysis with three cases or scenarios showing how widely the intermittent costs and profitability can vary. 

Comparing The Costs Of Intermittent And Dispatchable Electricity Generating Technologies by Paul L. Joskow Alfred P. Sloan Foundation and MIT [download PDF

Economic evaluations of alternative electric generating technologies typically rely on comparisons between their expected life-cycle production costs per unit of electricity supplied. The standard life-cycle cost metric utilized is the “levelized cost” per MWh supplied. This paper demonstrates that this metric is inappropriate for comparing intermittent generating technologies like wind and solar with dispatchable generating technologies like nuclear, gas combined cycle, and coal. Levelized cost comparisons are a misleading metric for comparing intermittent and dispatchable generating technologies because they fail to take into account differences in the production profiles of intermittent and dispatchable generating technologies and the associated large variations in the market value of the electricity they supply. Levelized cost comparisons overvalue intermittent generating technologies compared to dispatchable base load generating technologies. They also overvalue wind generating technologies compared to solar generating technologies. Integrating differences in production profiles, the associated variations in the market value of the electricity supplied, and life-cycle costs associated with different generating technologies is necessary to provide meaningful comparisons between them. This market-based framework also has implications for the appropriate design of procurement auctions created to implement renewable energy procurement mandates, the efficient structure of production tax credits for renewable energy, and the evaluation of the additional costs of integrating intermittent generation into electric power networks.

LIST OF ABBREVIATIONS

AFUDC: Allowance for Funds Used During Construction AGR: Advanced Gas-cooled Reactor
ALWR: Advanced Light Water ReactorARRA: American Reinvestment and Recovery Act BWR: Boiling Water Reactor
CC: Carbon Capture
CCS: Carbon Capture and Storage
CF: Capacity Factor
CFB: Circulating Fluidized Bed
CLFR: Compact Linear Fresnel Reflector
COE: Cost of Electricity
COL: Combined Operating License
COLA: Combined Operating License Application
CST: Concentrating Solar Thermal
CT: Combustion Turbine
CTCC: Combustion Turbine Combined Cycle
DC: Direct Current
DOE: Department of Energy
EPA: Environmental Protection Agency
EU: European Union
FBC: Fluidized Bed Combustion
FGD: Flue Gas Desulfurization
FOM: Fixed Operating and Maintenance Costs
GHG: Greenhouse Gas
GW: Gigawatts
HHV: Higher Heating Value
HRSG: Heat Recovery Steam Generator
HTF: Heat Transfer Fluid
IB MACT: Industrial Boiler Maximum Achievable Control Technology IGCC: Integrated Gasification Combined Cycle
IPP: Independent Power Producer
LCOE: Levelized Cost of Electricity
LFR: Linear Fresnel Reflector
LWR: Light Water Reactor
MACRS: Modified Accelerated Capital Recovery System MMBtu: one million British thermal units.
MW: Megawatts
NRC: Nuclear Regulatory Commission
NREL: National Renewable Energy Laboratory O&M: Operation and Maintenance
OEM: Original Equipment Manufacturer
PC: Pulverized Coal
PPA: Power Purchase Agreement
PRB: Powder River Basin (coal)
PV: Photovoltaic
PWR: Pressurized Water Reactor
RES: Renewable Energy Standard
RETG: Renewable Energy Technology Guide RPS: Renewable Portfolio Standards
SCR: Selective Catalytic Reduction SMR: Small Modular Reactor SCPC: Supercritical Pulverized Coal TAG: Technical Assessment Guide TCR: Total Capital Required
TPC: Total Plant Cost
USC PC: Ultra-Supercritical Pulverized Coal VOM: Variable Operating and Maintenance Costs <br

2 thoughts on “Forecasts of LCOE for various energy options for 2015, 2025

  1. Why isn’t there a list of abbreviations or acronyms? There are parts of this that I cannot understand as a result of that omission.

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