The Cost Of Wind And Solar Intermittency

Comparisons of electrical generation cost are usually based on the so-called levelized cost of energy (LCOE), an estimate of the total cost of generation expressed in dollars per megawatt hour ($/WMh). The calculation includes capital costs, operating and maintenance costs and fuel cost. It is affected by assumed utilization rate and interest rates.

Key Takeaways:

  • The most widely cited levelized cost estimates are those of the U.S. Energy Information Agency (EIA) and the investment firm Lazard.
  • Although these estimates are useful for comparison, they exclude such costs as network upgrades, integration and transmission, which can become significant as renewables penetration increases.
  • As the International Energy Agency (IEA) put it in the context of integrating variable renewable energy, “comparison based on LCOE is no longer sufficient and can be misleading.”

“Growth has largely been due to subsidies and renewable energy mandates.”

http://www.forbes.com/sites/uhenergy/2017/01/24/the-cost-of-wind-and-solar-intermittency/

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