Rethinking the “Levelized Cost of Energy”: A critical review and evaluation of the concept

IF 6.9 2区 经济学 Q1 ENVIRONMENTAL STUDIES Energy Research & Social Science Pub Date : 2025-01-01 DOI:10.1016/j.erss.2024.103897
Jan Emblemsvåg
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Abstract

The Levelized Cost of Energy (LCOE) is frequently used for policymaking worldwide, modeling and in assessing the cost competitiveness of technologies, but its formulation is deceptively simple. The result is that many caveats are obscured, but they are important to understand so that LCOE calculations can become more accurate and communicated more correctly to avoid misleading policymakers and decisionmakers. The paper discusses the approach, and how a handful of influential and reputable organizations calculate and communicate the LCOE. The conclusion is that the introduction of variable renewable energy sources into the grid has made the LCOE questionable towards it initial purpose of providing a sound basis for comparison, and most reputed organizations fail to address the issues both computationally and in their communication. However, significant improvements to regain relevance can be made by using realistic assumptions as shown by presenting a reconceptualized version of LCOE and communicate the unsolved shortcomings to stakeholders.
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平准化能源成本(LCOE)经常被用于世界范围内的政策制定、建模和评估技术的成本竞争力,但其表述却非常简单。其结果是许多注意事项被掩盖了,但理解这些注意事项非常重要,这样才能使 LCOE 计算更加准确,并得到更正确的传播,从而避免误导政策制定者和决策者。本文讨论了这种方法,以及一些有影响力和声誉良好的组织是如何计算和传播 LCOE 的。结论是,在电网中引入可变可再生能源后,LCOE 最初的目的--为比较提供可靠依据--就变得值得怀疑,而且大多数知名机构未能在计算和交流中解决这些问题。然而,通过提出重新概念化的 LCOE 版本,并向利益相关者说明尚未解决的不足之处,使用现实的假设可以大大提高 LCOE 的相关性。
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来源期刊
Energy Research & Social Science
Energy Research & Social Science ENVIRONMENTAL STUDIES-
CiteScore
14.00
自引率
16.40%
发文量
441
审稿时长
55 days
期刊介绍: Energy Research & Social Science (ERSS) is a peer-reviewed international journal that publishes original research and review articles examining the relationship between energy systems and society. ERSS covers a range of topics revolving around the intersection of energy technologies, fuels, and resources on one side and social processes and influences - including communities of energy users, people affected by energy production, social institutions, customs, traditions, behaviors, and policies - on the other. Put another way, ERSS investigates the social system surrounding energy technology and hardware. ERSS is relevant for energy practitioners, researchers interested in the social aspects of energy production or use, and policymakers. Energy Research & Social Science (ERSS) provides an interdisciplinary forum to discuss how social and technical issues related to energy production and consumption interact. Energy production, distribution, and consumption all have both technical and human components, and the latter involves the human causes and consequences of energy-related activities and processes as well as social structures that shape how people interact with energy systems. Energy analysis, therefore, needs to look beyond the dimensions of technology and economics to include these social and human elements.
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