Renewable Energy

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Levelised Cost of Energy

Lifetime cost per unit of energy produced.

Formula

LCOE = \frac{C + \sum \frac{M_t}{(1+r)^t}}{\sum \frac{E_t}{(1+r)^t}}

Variables

LCOECost per kWh

CCapital cost

M_tYear-t running cost

E_tYear-t energy

rDiscount rate

Example

Used to compare solar, wind, gas and nuclear on a level footing.

Did You Know?

Solar PV's LCOE fell roughly 90% in the 2010s, making it the cheapest electricity in history in many regions.

renewable lcoe cost

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