Levelized Full System Costs of Electricity

29 Pages Posted: 15 Feb 2022

Abstract

Different electricity generating technologies are often compared using the Levelized Costs of Electricity (LCOE), which summarize different ratios of fixed to variable costs into a single cost metric. They have been criticized for ignoring the effects of intermittency and non-dispatchability. This paper introduces the Levelized Full System Costs of Electricity (LFSCOE), a novel cost evaluation metric that compares the costs of serving the entire market using just one source plus storage. Like LCOE, and in contrast to alternatives such as System LCOE, LFSCOE condense the cost for each technology into one number per market. The paper calculates LFSCOE for several technologies using data from two different markets. It then discusses some refinements, including the LFSCOE-95 metric that require each technology to supply only 95% of total demand.

Keywords: Renewable Energy, Cost of Intermittency, Levelized Costs of Electricity, System LCOE, Marginal System LCOE

Suggested Citation

Idel, Robert, Levelized Full System Costs of Electricity. Available at SSRN: https://ssrn.com/abstract=4028640 or http://dx.doi.org/10.2139/ssrn.4028640

Robert Idel (Contact Author)

Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

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