🛰️AquaSwitch Report📡
Everyone wants to know what the CHEAPEST way of producing electricity is.
We took on this mammoth task by aggregating reputable #LCOE reports and making a simple average 🤓
Our KEY findings 🧵 👇
1/ What is this LCOE? 🤔
It's a calculation of the dollar cost per unit of #energy ($/MWh) that a power station can achieve over its life span.
Except some institutions generalised it to cover a particular technology. @Lazard @WorldBank @IRENA @EIAgov @beisgovuk
2/ LCOE ⚡
LCOE reflects:
- Capital (initial) costs 💵
- Maintenance and refuelling costs 🛠️
- Decommissioning ♻️
- Capacity Factor 🌞🌔 🕝
- etc.
To get rid of any bias, we took LCOE values from multiple reputable reports and averaged them out ➕ ➗
3/ The results 🥁
What was surprising?
👉 Onshore wind 🌄 is much cheaper than offshore wind 🌊
👉 Hydro and Geothermal can be very cheap too
👉 Gas, Biomass and Coal are cheaper than Nuclear ☢️ as baseload
👉 Concentrated Solar 🌞 has fallen behind $$$$
👉 Storage is $$$$
4/ Reality 🧂
The reality is that these results must be taken with a truckload of salt 🧂
And the case for building a new power station has to take a lot more into consideration 🤔
For example...
👉 LCOE calculations are inconsistent w/ each other
👉 We can't predict future fuel costs/interest rates/carbon tax
👉 Easy to fudge numbers and manipulate
👉 Subsidies and taxes over lifetime do change
👉 Innovation is FAST 🏃♂️
👉 There's financial effects outside producing ⚡
👉Polluting is likely to become very expensive 💨
👉Local resources vary (e.g. underground heat, wind, sun)
👉Grid re-balancing and new transmission costs
👉Baseload energy at peak time is more valuable
👉Nuclear Fusion could make this convo useless
5/ Conclusion 🤓
👉Cheapest doesn't mean most adequate.
👉Renewables have become very cheap 🤑
👉Be wary of authoratative claims on #Twitter based on LCOEs, its too easy to manipulate ❗
👉With so much uncertainty, best is to build a diversified low-carbon energy network ⚡
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aquaswitch.co.uk/blog/lcoe/
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