Levelized Cost of Energy (LCOE)

Levelized Cost of Energy (LCOE) is a measure that calculates the average cost to produce a unit of electricity over the entire lifespan of a power plant. It includes upfront capital expenses, maintenance, fuel, and other operational costs, divided by the total electricity generated over the plant’s lifetime. LCOE allows for fair comparison between different energy sources, helping decision-makers determine which options are most cost-effective. Essentially, it shows the consistent, per-unit price of electricity considering all costs involved, making it a valuable tool for planning and investment.