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October 11, 2012

EIA Energy Costs Estimate for Different Energy Generation brought online for 2017

The EIA paper presents average levelized costs for generating technologies that are brought on line in 2017 as represented in the National Energy Modeling System (NEMS) for the Annual Energy Outlook 2012 (AEO2012) reference case. Natural gas is the cheapest (if there is no carbon capture and storage) and then hydroelectric. There are also regional variances.

Most of the new energy plants in the world will be built in China, India, South Korea and Russia. Costs in those countries are far lower. China and South Korea are about half the cost of the US for nuclear power generation.

Levelized cost is often cited as a convenient summary measure of the overall competiveness of different generating technologies. It represents the per-kilowatthour cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle. Key inputs to calculating levelized costs include overnight capital costs, fuel costs, fixed and variable operations and maintenance (O and M) costs, financing costs, and an assumed utilization rate for each plant type. The importance of the factors varies among the technologies. For technologies such as solar and wind generation that have no fuel costs and relatively small O and M costs, the levelized cost changes in rough proportion to the estimated overnight capital cost of generation capacity. For technologies with significant fuel cost, both fuel cost and overnight cost estimates significantly affect the levelized cost.




Regional Variances in cost by energy source



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