Modified Levelized Cost of Electricity or Energy, MLOCE and Modified Levelized Avoidable Cost of Electricity or Energy, MLACE and Decision Making
Huseyin Murat Cekirge,
Serdar Erturan
Issue:
Volume 5, Issue 1, February 2019
Pages:
1-4
Received:
26 March 2019
Accepted:
26 April 2019
Published:
23 May 2019
Abstract: LCOE is the Levelized Cost of Electricity or Energy, which is an economic measure of the minimum price at which energy can be produced over the lifetime of the power plant. This value determines the minimum value at which energy could be sold during the lifetime of the installation, and this value is considered as the net present value of unit cost electricity. It is estimated dividing the net present value of the total expenditure by the total production. The LACE is the Levelized Avoided Cost of Electricity or Energy which is a measure of income for the unit value of electricity. Of course, the value of LCOE should be less than the LACE for considering the project, these metrics are necessary but not sufficient to start the project. For overcoming these difficulties, in this paper MLCOE (Modified Levelized Cost of Electricity or Energy) and MLACE (Modified Avoided Cost of Electricity or Energy) are introduced to the calculations for considering dominant factors of construction of a plant and these are the actual estimations of CAPEX (Capital Expenses) and OPEX (Operation Expenses) through the payback period. The methodology presented in this paper will be an important supporting tool for power plant investments of go - or - not go decision.
Abstract: LCOE is the Levelized Cost of Electricity or Energy, which is an economic measure of the minimum price at which energy can be produced over the lifetime of the power plant. This value determines the minimum value at which energy could be sold during the lifetime of the installation, and this value is considered as the net present value of unit cost...
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