LCOE - levelized cost of energy
SPP - solar (photovoltaic) power plant
WPP - wind power plant
TPP - thermal power plant
NPP - nuclear power plant
What is LCOE?
LCOE (Levelized cost of electricity) - universal cost index of electricity per 1 kWh.
Its advantage is the rapid comparison of different technologies with different operating characteristics.
How can I use this calculator?
This tool allows you to compare the cost of electricity from different sources in Ukraine, and to compare the cost of technology with current electricity prices.
Technology: Compares different technologies with each other, allows the user to change parameters and immediately see how these changes affect the cost of electricity.
Geography: compares the cost of electricity of the selected RES technology depending on the location of the station in Ukraine. Stations on traditional energy sources are not available in this mode because their location does not affect the cost of energy.
How is LCOE calculated?
The LCOE includes all types of costs associated with generating electricity over the life of the station and gives the value at current prices, taking into account the cost of time.
The calculator uses a simplified approach that creates basic parameters.
Therefore, LCOE values are oriented and used to compare technology and location geography.
What parameters are taken into account in the calculator?
The parameters common to all technologies are the cost of capital, the CO2 tax.
The parameters specific to each project are capital costs, operating costs, installed capacity utilization factor, CO2 emissions, fuel consumption and price, project duration, solar panel degradation.
The parameters with the greatest impact on LCOE are available for in-depth editing.
Conversion into Euro is done at the NBU rate, which is updated automatically.
What is the difference between self-cost, price and tariff?
Self-cost is an internal economic indicator that reflects the cost incurred for the construction of a power plant and its operation.
Self-cost is not a price or a tariff.
Price is the result of the interaction of supply and demand in the market. Price reflects the value of the product or service that is paid for in the transaction or when changing ownership.
A tariff is an administratively prescribed amount calculated by regulatory authorities.
A tariff is a politically determined quantity because the person or body that determines it influences its value.
The LCOE is a reflection of the cost.
Comparison of LCOE with prices and tariffs will give you an understanding of the prospects of RES in the Ukrainian market.
What are the limitations of the LCOE?
1. Static indicator ie does not take into account the dynamics of fuel prices or operating costs; it shows the cost of electricity as if all parameters are unchanged in the future.
2. It only takes into account the capital and operating costs of the station operator, ie does not take into account the impact on system costs (balancing costs, costs associated with operating in the markets, additional costs for upgrading the network with RES development, etc.).
3. A simplified approach to calculating electricity generation takes into account only a steady-state generation model over the year based on statistics for each technology.
Based on market data analysis, the CEL team set initial values that reflect current prices.
When using a calculator, you can always return to these values by clicking the "Initial Values" button next to the "Calculate" button.
We plan to update our initial values every 3-4 months in line with market dynamics.
In this mode, you can change the most important parameters for each technology individually: the cost of the project, the ICUF that affects the generation of electricity, and the cost of fuel.
Other options are not editable because they have little effect on LCOE.
And not to overload the interface. :)
Where to find fuel prices?
Fuel for NPP: http://bit.ly/2RmxCtG
Why are there no other technologies?
Projects for small hydropower, biomass or biogas plants are very specific - there is no “typical” project.
Therefore, the LCOE calculation parameters for these technologies can vary greatly.
For example, the cost of building a small hydropower plant may vary by 2-4 times, and biomass stations may use different fuels.
To avoid overloading the calculator and leaving it an accessible and simple tool - we have focused on the most common technologies.
Restrictions in the "Geography"
Wind farms in Ukraine are not yet widespread in all areas.
Most wind farms are installed on the Black and Azov seas and in the Carpathians - where the wind speed is higher. There are wind farm statistics for these areas that we use to calculate the LCOE.
In other areas, wind power generation data are approximate and calculated based on the best available data (for example https://www.renewables.ninja/).
It is also worth noting that wind resources are not evenly distributed compared to solar radiation. Therefore, the LCOE for WPP in each area is averaged approximation.
Recommended values of capacity factor
The Installed Capacity Utilization Factor (ICUF) reflects how much time a year a station operates at maximum capacity. The ICUF cannot exceed 100%.
Each generation technology has a different load profile dictated by:
- for Solar Power Plant and Wind Power Plant - the presence of sun and wind during the year;
- for other technologies - by technological or market characteristics.
For example, coal-fired thermal power plants can serve as a base load, ie the ICUF can in theory approach 100%. However, in Ukraine they do not operate in this mode, unlike NPPs. NPPs sometimes have to reduce generation, such as for the repair of units, which is why ICUF will never reach 100% in real situations.
Open-loop gas stations are used to balance the system, mainly during peak load hours.
Therefore, the ICUF for them will be relatively low, reflecting their frequency of use throughout the year.
Combined cycle gases are technologically less flexible, so they work in half-peak periods. Their ICUF will be close to coal stations.
Your questions not answered?
Please feel free to drop us a message on our Facebook page or email@example.com