SRC-161

Projected Costs of Generating Electricity, 2020 edition

Commissioned by IEA / NEA. Who paid for a study is recorded because it bears on how its conclusions should be read, not because it makes them wrong.

Published claims resting on this source

• CLM-0300 The main international definition of LCOE is the flat price per unit of electricity a power plant would need to be paid, every year of its life, to break even overall.
• CLM-0301 The IEA itself says plain LCOE misses how useful a power plant is to the wider electricity system, which is why it built a second, add-on metric.
• CLM-0304 The interest rate assumed changes an LCOE figure a lot, and most for plants that cost the most to build: in a 2020 international study, going from 0% to 20% raised gas plant costs by about 40%, wind and solar by about three times, and nuclear by more than five times.
• CLM-0305 How long a power plant is assumed to last matters much less to its cost per unit of electricity than the interest rate does.
• CLM-0308 The IEA's alternative metric adds credit for how much a power plant helps keep the grid reliable, on top of its raw energy cost, but the IEA itself says the answer depends heavily on what the future electricity system is assumed to look like.

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