Electricity generation costs

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Electricity generation costs for renewable energies and conventional power plants in Germany (data source: Fraunhofer ISE; March 2018)

Electricity production costs (English. Levelized Cost of Electricity or LCOE for short ) describe the costs that are necessary for the conversion of energy from another form of energy into electricity . For example, they are given in euros or dollars per megawatt hour . The electricity production costs result from the capital costs (including the financing costs of borrowed capital ), the fixed and variable operating costs , possibly the fuel costs as well as the targeted return on capital over the operating period. Not included is the distribution and needs-based buffering of the generated electrical energy.

calculation

Average electricity production costs are calculated using the net present value method and enable a comparison of power plants with different generation and cost structures. The method is not suitable for calculating the profitability of a specific power plant project; this is only possible with a complete financial statement including all income and expenses.

Calculation formula :

This means:

for the discount factor
Investment t for the investment expenditure in the respective year (euros)
O + M t for the operating and maintenance costs in the respective year (euros)
Fuel t for the fuel costs in the given year (euros)
Carbon t for the costs of carbon dioxide emissions in the respective year ( emission rights ) (euros)
Decommissioning t for the disposal costs or the residual value in the respective year (euros)
Electricity t for the amount of electricity produced in the respective year in kWh

Electricity generation costs for new power plants according to power plant type

Europe

The table below shows that the costs of renewable energies , especially photovoltaics , are falling very quickly. As of 2017, for example, the costs of generating electricity from photovoltaics have fallen by almost 75% within 7 years.

In the following table it should also be taken into account that energy storage systems are absolutely necessary for a supply with a high proportion of renewable energies . Storage systems become necessary when around 40 to 60% of the electricity comes from variable renewable energies every year. Building up storage facilities increases the production costs of renewable energies; with a full supply with 100% renewable energies, the costs of energy storage would amount to approx. 20-30% of the electricity production costs.

Electricity generation costs of new power plants in euro cents per kilowatt hour
Energy source Publication 2009 Publication 2011 2012 study various individual data (as of 2012) 2013 study 2015 study Study 2018
Nuclear energy 5.0 6-10 - 7.0-9.0; 7.0-10.0; 10.1 - 3.6-8.4 -
Brown coal 4.6-6.5 4.5-10 - - 3.8-5.3 2.9-8.4 4.59-7.98
Hard coal 4.9-6.8 4.5-10 - - 6.3-8.0 4.0-11.6 6.27-9.86
Natural gas ( CCGT ) 5.7-6.7 4-7.5 - 8.9 7.5-9.8 5.3-16.8 7.78-9.96
water - - - - - 2.2-10.8 -
Onshore wind 9.3 5-13 6.5-8.1 6.35-11.1; 11.3 4.5-10.7 2.9-11.4 3.99-8.23
Offshore wind - 12-18 11.2-18.3 13.6-14.4 11.9-19.4 6.7-16.9 7.49-13.79
Biomass (gas) - - - 12.1 13.5-21.5 - 10.14-14.74
Small photovoltaic system (DE) - - 13.7-20.3 - 9.8-14.2 - 7.23-11.54
Large photovoltaic power plant 32 - 10.7-16.7 10.0; 17.7 7.9-11.6 3.5-18.0 3.71-8.46

In the United Kingdom , a feed-in tariff of 92.50 pounds / MWh (converted 10 ct / kWh) plus inflation compensation with a term of 35 years was set in 2013 for the new Hinkley Point C nuclear power plant to be built . At that time, this was below the feed-in tariff for large photovoltaic and offshore wind turbines and above the onshore wind turbines.

In Germany , tenders carried out in 2017 brought significant cost reductions. In a tender for offshore wind farms, several providers were awarded contracts for projects in which they completely waived public subsidies and wanted to finance the projects solely through the market. Only a single offshore wind farm was awarded a grant; this was 6.00 ct / kWh. In a tender for wind farm projects on land, an average remuneration of 5.71 ct / kWh was achieved, with a second tendering round of 4.29 ct / kWh.

In 2019, there were tenders for new offshore wind farms in the UK, where costs have fallen to as low as 3.96 pence per kWh (4.47 ct).

In the same year there were tenders in Portugal for photovoltaic systems, where the price for the cheapest project is 1.476 ct / kWh.

United States

Estimated LCOE of power plants now planned to go into operation in 2018 in US dollars / MWh (as of 2013)
Power plant type Capacity
factor		 Average cost of
capital
 		Maintenance costs Network
costs		 Electricity
production
costs
fix variable
(including fuel )
Conventional coal power plant 85 65.7 4.1 29.2 1.2 100.1
Advanced coal power plant 85 84.4 6.8 30.7 1.2 123
Advanced coal power plant with CCS 85 88.4 8.8 37.2 1.2 135.5
Conventional combined cycle power plant 87.8 15.8 1.7 48.4 1.2 67.1
Advanced combined cycle power plant 87 17.4 2.0 45.0 1.2 65.6
Advanced combined cycle power plant with CCS 87 34.0 4.1 54.1 1.2 93.4
Conventional gas turbine 30th 44.2 2.7 80.0 3.4 130.3
Advanced gas turbine 30th 30.4 2.6 68.2 3.4 104.6
Advanced nuclear power plant 90 83.4 11.6 12.3 1.1 108.4
Geothermal power plant 92 76.2 12.0 0.0 1.4 89.6
Biomass power plant 83 53.2 14.3 42.3 1.2 111.0
Wind energy 34 70.3 13.1 0.0 3.2 86.6
Offshore wind energy 37 193.4 22.4 0.0 5.7 221.5
Photovoltaics 25th 130.4 9.9 0.0 4.0 144.3
Solar thermal power plant 20th 214.2 41.4 0.0 5.9 261.5
Hydropower 52 78.1 4.1 6.1 2.0 90.3

The updated version of the study from 2018 shows a significant cost reduction in the field of renewable energies:

Estimated LCOE of newly planned power plants with commissioning in 2022 in US dollars / MWh (as of 2018)
Power plant type Capacity
factor		 Average cost of
capital
 		Maintenance costs Network
costs		 Electricity
production
costs
fix variable
(including fuel )
Wind energy 41 43.1 13.4 0.0 2.5 59.1
Offshore wind energy 45 115.8 19.9 0.0 2.3 138.0
Photovoltaics 29 51.2 8.7 0.0 3.3 63.2
Solar thermal power plant 25th 128.4 32.6 0.0 4.1 165.1
Hydropower 64 48.2 9.8 1.8 1.9 61.7

In the summer of 2014, the investment bank Lazard, based in New York, published a study on the current levelized costs of photovoltaics in the USA compared to conventional power generators. The cheapest large photovoltaic power plants can produce electricity at $ 60 per MWh. The mean value of such large power plants is currently USD 72 per MWh and the upper limit is USD 86 per MWh. In comparison, coal-fired power plants are between $ 66 and $ 151 per MWh, and nuclear power is $ 124 per MWh. Small rooftop photovoltaic systems are still at 126 to 265 USD per MWh, which, however, can do without electricity transport costs. Onshore wind turbines range from $ 37 to $ 81 per MWh. According to the study, the electricity suppliers see a disadvantage in the volatility of solar and wind power. The study sees one solution in batteries as storage (see battery storage power plant ), which are still expensive, however. An updated version of the Lazard study was published in November 2017. The lowest value given for large photovoltaic power plants is 43 USD per MWh, and for wind it is 30 USD per MWh.

In a power purchase agreement in the USA from July 2015 with a term of 20 years, the solar power is remunerated at US $ 38.7 per MWh ($ 3.87 ct / kWh). The solar system that produces this solar power is located in Nevada (USA) and has an output of 100 MW. In June 2018, Nevada Power concluded contracts for solar power with a remuneration of US $ 21.55 per MWh ($ 2.155 ct / kWh).

other countries

For a construction phase of the Sheikh Mohammed Bin Rashid Solar Park with 800 MW of photovoltaics, a bid of US $ 0.0299 per kilowatt hour of solar power was achieved in the spring of 2016.

At the end of 2017, the winner of a new solar park for 104MWp offered the electricity generation costs at US $ 0.02057 per kilowatt hour.

External costs

Various effects occur in power generation that cause external costs. These external costs are not included in the electricity price , but are borne by the general public to varying degrees. According to the polluter pays principle, these costs would have to be paid in addition to the electricity price in order to reduce the distortion of competition between conventional and renewable energy sources in the field of electricity generation.

Since external effects are diffuse in their impact, these costs cannot be directly assessed in monetary terms, but only determined through estimates. One approach to deriving the costs of the environmental pollution of electricity generation is the methodological convention of the Federal Environment Agency. According to this, the external costs of electricity production from lignite are 10.75 ct / kWh, from hard coal 8.94 ct / kWh, from natural gas 4.91 ct / kWh, from photovoltaics 1.18 ct / kWh, from wind 0.26 ct / kWh and from water 0.18 ct / kWh. The Federal Environment Agency does not give any value for nuclear energy, as the results of various studies fluctuate by a factor of 1,000. In view of this great uncertainty, it recommends evaluating nuclear energy with the costs of the next inferior energy source. Based on this recommendation of the Federal Environment Agency and based on its own approaches, the Ecological-Social Market Economy Forum specifies the external costs of environmental pollution for nuclear energy at 10.70 to 34.00 ct / kWh.

Web links

Individual evidence

  1. ↑ a b Fraunhofer ISE: Study of electricity generation costs for renewable energies March 2018 . Retrieved March 21, 2018.
  2. ↑ a b Martin Zapf: Electricity storage and power-to-gas in the German energy system. Framework conditions, needs and possible uses . Wiesbaden 2017, p. 78.
  3. ↑ IEA, cit. after: Martin Zapf: Electricity storage and power-to-gas in the German energy system. Framework conditions, needs and possible uses . Wiesbaden 2017, p. 78.
  4. ↑ Nancy M. Haegel et al .: terawatt-scale photovoltaics: Trajectories and challenges . In: Science . tape 356 , no. 6334 , 2017, p. 141-143 , doi : 10.1126 / science.aal1288 .
  5. ↑ Martin Zapf: Electricity storage and power-to-gas in the German energy system. Framework conditions, needs and possible uses . Wiesbaden 2017, p. 133.
  6. ↑ Panos Konstantin, Practical Guide to Energy Economics. Energy conversion, transport and procurement in the liberalized market. Berlin - Heidelberg 2009, pp. 294, 302, 322, 340.
  7. ↑ David Millborrow, wind edges forward in cost-per-watt battle. In: Wind Power Monthly, Jan. 2011, cit. according to: Alois Schaffarczyk Technical framework. In: Jörg v. Böttcher (Ed.), Wind Energy Handbook. Onshore projects: Realization, financing, law and technology , Munich 2012, p. 166.
  8. ↑ Fraunhofer ISE: Study of electricity generation costs for renewable energies, May 2012 (PDF; 6.9 MB)
  9. ↑ Fraunhofer ISE: Study of electricity generation costs for renewable energies November 2013 (PDF; 5.2 MB)
  10. ↑ Study Levelized Cost of Electricity 2015 , VGB PowerTech , accessed on October 13, 2017.
  11. ↑ At a purchase price of 4.2 billion euros.
  12. ↑ The French have doubts about nuclear power. December 6, 2012, accessed December 12, 2012 .
  13. ^ E.ON and RWE overturn nuclear power plant plans in Great Britain. March 29, 2012, accessed March 30, 2012 .
  14. ↑ a b c d e f Electricity Generation Costs. (PDF file, 1.1 MB) Department of Energy & Climate Change, December 19, 2013, p. 18 , accessed on June 3, 2014 (English).
  15. ↑ a b c With or without free allocation of emission certificates .
  16. ↑ a b The source does not differentiate between lignite and hard coal.
  17. ↑ Cost situation for onshore wind energy in Germany ( memento of the original from November 13, 2013 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 3.8 MB). Study by the Deutsche Windguard. Retrieved November 13, 2013. @1@ 2Template: Webachiv / IABot / www.wind-energie.de
  18. ↑ Federal Association for Renewable Energy: Solar power only costs a little more than electricity from gas and nuclear power plants; Photovoltaic follow-up costs are very low ( memento of the original from October 16, 2014 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.solarserver.de
  19. ↑ Conversion using the exchange rate from August 28, 2020.
  20. ^ Electricity Market Reform - Delivery Plan. (PDF file, 1.5 MB) Department of Energy and Climate Change, December 2013, accessed on May 4, 2014 .
  21. ↑ Carsten Volkery: Cooperation with China: Great Britain builds the first nuclear power plant in decades , In: Spiegel Online from October 21, 2013.
  22. ↑ The costs for offshore wind farms decrease significantly . In: Handelsblatt , October 9, 2017. Retrieved October 9, 2017.
  23. ↑ Citizens' energy wins wind tender . In: Tagesspiegel , May 19, 2017. Retrieved October 9, 2017.
  24. ↑ Competition in the construction of wind farms is getting tougher . In: Handelsblatt , August 15, 2017. Retrieved October 9, 2017.
  25. ↑ Jillian Ambrose: New wind farms will not cost bill payers after subsidies hit record low . In: The Guardian . September 20, 2019, ISSN  0261-3077 ( theguardian.com [accessed October 3, 2019]).
  26. ↑ Mike Parr says: Portugal's solar energy auction breaks world record. In: www.euractiv.com. July 31, 2019; Retrieved October 3, 2019 (UK English).
  27. ↑ Levelized Cost of New Generation Resources in the Annual Energy Outlook 2013 (PDF; 169 kB). US Energy Information Administration (January 2013). Retrieved September 17, 2013.
  28. ↑ Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2018 (PDF; 169 kB). US Energy Information Administration (March 2018). Retrieved April 2, 2018.
  29. ↑ Solar power is competitive. photovoltaik.eu, November 26, 2014, p. 1 , accessed on November 26, 2014 (as of November 2014).
  30. ↑ Lazard's levelized cost of energy Analysis (LCOE 11.0). Retrieved April 2, 2018 (as of November 2017).
  31. ↑ Buffet gets solar power from First Solar at a bargain price. pv-magazine.de, July 8, 2015, p. 1 , accessed on July 8, 2015 (as of July 2015).
  32. ↑ Warren Buffett secures amazing low prices for 1 GW of solar. reneweconomy.com.au, June 15, 2018, p. 1 , accessed on June 15, 2018 (as of June 2018).
  33. ↑ MESIA and DEWA report record bid for photovoltaic tender: 0.0299 USD / kWh solar power. (No longer available online.) Solarserver.de, May 1, 2016, p. 1 , archived from the original on May 11, 2016 ; accessed on May 11, 2016 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.solarserver.de
  34. ^ Trina Solar secured 104 MW of solar in third Mexico auction . In: pv magazine International . ( pv-magazine.com [accessed January 9, 2018]).
  35. ↑ Method Convention 2.0 for the Estimation of Environmental Costs B, Appendix B: Best Practice Cost Rates for Air Pollutants, Traffic, Electricity and Heat Generation ( Memento of the original from January 22, 2016 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked . Please check the original and archive link according to the instructions and then remove this notice. (PDF; 886 kB). Study by the Federal Environment Agency (2012). Retrieved October 23, 2013. @1@ 2Template: Webachiv / IABot / www.umweltbundesamt.de
  36. ↑ Economic assessment of environmental damage CONVENTION OF METHODS 2.0 FOR THE ESTIMATION OF ENVIRONMENTAL COSTS ( Memento of the original from October 4, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 799 kB), pp. 27–29. Study by the Federal Environment Agency (2012). Retrieved October 23, 2013. @1@ 2Template: Webachiv / IABot / www.umweltbundesamt.de
  37. ↑ External costs of atomic energy and reform proposals for nuclear liability law (PDF; 862 kB), 9/2012. Ecological-Social Market Economy Forum on behalf of Greenpeace Energy eG and the Bundesverband Windenergie eV. Accessed on October 23, 2013.