Levelized cost of energy (LCOE), or sometimes called the levelized cost of electricity, is a common metric in the world of electric utilities to measure the full lifecycle expense by its source in terms of dollars per megawatt-hour or kilowatt-hour.
So it’s all about accounting policies? What about the costs of balancing - despatchable generators vs non? If wind generators had to provide equivalent despatchable energy at their own cost that would up-end the calculations too. I’ve seen some attempts to do this - by allocating shared balancing costs - but allocating costs again is an accounting policy.
Good point. That would be the costs incurred by the RTOs like PJM. That gets into a much more difficult calculation because you're dealing with capacity markets and other factors. Although there might be ways to interpret from overall spending per megawatt. Some of this was touched on in the Investigative Economics story about how much California pays for electricity:
So it’s all about accounting policies? What about the costs of balancing - despatchable generators vs non? If wind generators had to provide equivalent despatchable energy at their own cost that would up-end the calculations too. I’ve seen some attempts to do this - by allocating shared balancing costs - but allocating costs again is an accounting policy.
Good point. That would be the costs incurred by the RTOs like PJM. That gets into a much more difficult calculation because you're dealing with capacity markets and other factors. Although there might be ways to interpret from overall spending per megawatt. Some of this was touched on in the Investigative Economics story about how much California pays for electricity:
https://investigativeeconomics.substack.com/p/average-cost-of-electricity-for-pg?utm_source=%2Fsearch%2Fcalifornia&utm_medium=reader2