Volume 5, Issue 1, February 2019, Page: 1-4
Modified Levelized Cost of Electricity or Energy, MLOCE and Modified Levelized Avoidable Cost of Electricity or Energy, MLACE and Decision Making
Huseyin Murat Cekirge, Department of Mechanical Engineering, New York University, New York, USA; Department of Mechanical Engineering, City College of New York, New York, USA
Serdar Erturan, Department of Mechanical Engineering, City College of New York, New York, USA
Received: Mar. 26, 2019;       Accepted: Apr. 26, 2019;       Published: May 23, 2019
DOI: 10.11648/j.ajme.20190501.11      View  182      Downloads  24
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.
Keywords
Levelized Cost of Electricity, LCOE, MLOCE, Levelized Avoidable Cost of Electricity, LACE, MLACE, Discount Sensitivity, Payback Period
To cite this article
Huseyin Murat Cekirge, Serdar Erturan, Modified Levelized Cost of Electricity or Energy, MLOCE and Modified Levelized Avoidable Cost of Electricity or Energy, MLACE and Decision Making, American Journal of Modern Energy. Vol. 5, No. 1, 2019, pp. 1-4. doi: 10.11648/j.ajme.20190501.11
Copyright
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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