| ID | 150350 |
| Title Proper | Review of the IEA/NEA projected costs of electricity – 2015 edition |
| Language | ENG |
| Author | Khatib, Hisham |
| Summary / Abstract (Note) | The IEA/NEA recently issued their eighth edition of the Study on the “Projected Costs of Generating Electricity” – 2015 edition. The Study is mainly concerned with calculating the levelised cost of electricity (LCOE). The LCOE calculations are based on a levelised average life time cost approach using the discounted cash flow (DCF) method. The analysis was this year, and for the first time, performed using three discount rates (3%, 7%, and 10%). The LCOE can serve as a tool for calculating the cost of different generation technologies. However the Study's usefulness is affected by its narrow base of a limited set of countries that are not necessarily representative. It ignored the negative role of subsidies and did not provide a methodology for selective application of the discount rates and costing of carbon. The global power generation scene is changing. Generation growth in OECD countries has become very limited; simultaneously there is rapid growth of varying renewables (VRE) generation which needs special criteria for assessing its system cost. All this demands a rethinking of the application and usefulness of the LCOE in future generation planning. |
| `In' analytical Note | Energy Policy Vol. 88, No.88; Jan 2016: p. 229–233 |
| Journal Source | Energy Policy 2016-01 88, 88 |
| Key Words | Generation ; Carbon ; Subsidies ; System Costing ; Discount Rates |