Levelized Cost of Electricity (LCOE)
Levelized cost of electricity (LCOE) is often cited as a convenient summary measure of the overall competiveness of different generating technologies. It represents the per-megawatthour cost (in discounted real dollars) of building and operating a generating plant over an assumed financial life and duty cycle.
The key inputs to calculating LCOE include
- capital costs
- fuel costs
- fixed and variable operations and maintenance (O&M) costs
- financing costs and
- an assumed utilization rate for each plant type.