There is a new focus on system costs related to achieving reliable supply to meet demand.In the following text, the levelised cost of electricity (LCOE) is used to indicate the average cost per unit of electricity generated at the actual plant, allowing for the recovery of all costs over the lifetime of the plant.With government encouragement to utilise wind and solar technologies, their costs have come down and are now in the same league per kilowatt-hour as the increased costs of fossil fuel technologies, especially with likely carbon emission charges on electricity generation from them.
There is a new focus on system costs related to achieving reliable supply to meet demand.
The major published study on EROI, by Weissbach (2013) showed: “Nuclear, hydro, coal, and natural gas power systems (in this order) are one order of magnitude more effective than photovoltaics and wind power.” This raises questions about the sustainability of wind and solar PV which have not yet been addressed in national energy policies.
A fuller account of EROI in electricity generation is in the information paper on Energy Return on Investment.
Attention again turned to the huge sources of energy surging around us in nature – sun, wind, and seas in particular.
There was never any doubt about the magnitude of these, the challenge was always in harnessing them so as to meet demand.
The costs of all these, over and above the generation costs, comprise the system costs.
Grid-level system costs for VRE where they replace dispatchable sources are large (-80/MWh) but depend on country, context and technology (onshore wind Policies which favour renewables over other sources may also be required.
Such policies, now in place in about 50 countries, include priority dispatch for electricity from renewable sources and special feed-in tariffs, quota obligations and energy tax exemptions.
In 2015 over 140 countries submitted to the UN’s Framework Convention on Climate Change (UNFCCC) secretariat their Intended Nationally Determined Contributions (INDCs) to combat climate change.
It includes capital, financing, operation and maintenance, fuel (if any), and decommissioning.
Another relevant metric is energy return on energy invested (EROI).