Using System Levelized Cost, Levelized Avoided Cost and Value-Adjusted Levelized Cost to Evaluate Electricity Generation Technologies
Published On: March 31, 2020
Electricity Commodity Update - April 2020
Economic evaluations of alternative electricity generating options are required to inform investment, regulatory, and policy decisions that pertain to electricity generation. The well-understood and most widely used metric for economic evaluation of alternative generating technologies is the levelized cost of electricity (LCOE). Despite its widespread usage, LCOE is now being criticized for its limitations. This article summarizes alternative methodologies in evaluating costs of electricity generation.