Levelized cost of electricity | EPFL Graph Search

The levelized cost of electricity (LCOE) is a measure of the average net present cost of electricity generation for a generator over its lifetime. It is used for investment planning and to compare different methods of electricity generation on a consistent basis. The more general term levelized cost of energy may include the costs of either electricity or heat. The latter is also referred to as levelized cost of heat or levelized cost of heating (LCOH), or levelized cost of thermal energy. The LCOE "represents the average revenue per unit of electricity generated that would be required to recover the costs of building and operating a generating plant during an assumed financial life and duty cycle", and is calculated as the ratio between all the discounted costs over the lifetime of an electricity generating plant divided by a discounted sum of the actual energy amounts delivered. Inputs to LCOE are chosen by the estimator. They can include the cost of capital, decommissioning, fuel costs, fixed and variable operations and maintenance costs, financing costs, and an assumed utilization rate. The cost of energy production depends on costs during the expected lifetime of the plant and the amount of energy it is expected to generate over its lifetime. The levelized cost of electricity (LCOE) is the average cost in currency per energy unit, for example, EUR per kilowatt-hour or AUD per megawatt-hour. The LCOE is an estimation of the cost of production of energy, thus it tells nothing about the price for consumers and is most meaningful from the investor’s point of view. The LCOE is calculated by adding up all costs of production, divided by the total amount of energy it is expected to generate. In formula: {| |- |It || : || investment expenditures in the year t |- |Mt|| : || operations and maintenance expenditures in the year t |- |Ft|| : || fuel expenditures in the year t |- |Et|| : || electrical energy generated in the year t |- |r || : || discount rate |- |n || : || expected lifetime of system or power station |} Care should be taken in comparing different LCOE studies and the sources of the information as the LCOE for a given energy source is highly dependent on the assumptions, financing terms and technological deployment analyzed.

Analysis of the West African Power Pool (WAPP) and its development potential

First of all, it is necessary to specify that this study is an academic work carried out by a student. The hypothesis and the line of reasoning that aect the results obtained are proposed in the context of a master thesis. Electricity supply is a big challenge for West Africa. Indeed, the state members of the Economic Community of West African States (ECOWAS) face many problem of electricity as their production and distribution systems are not enough developed and reliable. A good and reliable electricity supply could allow to develop the industries and improve the attractiveness of the region. The purpose of the West African Power Pool (WAPP) is to develop the electricity sector in West Africa and guarantee a reliable and continuous electricity supply at a competitive cost. Creating an open market for the whole region seems to be the best strategy to achieve these goals. This kind of market could decrease the electricity price by the wholesale purchase of energy, a better resources management and the building of large centralized power plants. Investors can be attracted to invest in new power plants and develop the sector. The objective of the study is to analyze the benets of dierent electricity supply strategies for each country. An autarkic strategy for which each country use its local plants to produce electricity. An open market strategy for which the region is considered as a unique area with an open market.A part of independence strategy for which an open market is in place but the importing countries should produce a certain part of their electricity locally. Moreover a strategy introducing renewables technologies is assessed to evaluate the economical impact on an open market of these technologies. To evaluate these strategies, the expansion of the power pool is planned and evaluate on an economical point of view. The existing power pool is consider and candidate plants are added depending on the strategy and the country. In West Africa, the mainly used plants are thermal plants using natural gas, heavy fuel or diesel and some hydroelectric plants. The expansion is optimized using the software PLANELEC by the minimization of the net present cost (NPC). The economical evaluation is made on the NPC and the levelized cost of electricity (LCOE). The results demonstrate that the open market strategy provides the lowest LCOE. So all the countries will benet the creation of a market. The most used technology are combined cycle power plants and gas turbines using natural gas as a fuel. The renewable energy strategy will slightly increase the LCOE of the open market as these technologies are more expensive.

2019

Analysis of the West African Power Pool (WAPP) and its development potential

2019