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Levelized Full System Costs of Electricity

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  • Idel, Robert

Abstract

Different electricity generating technologies are often compared using the Levelized Costs of Electricity (LCOE), which summarize different ratios of fixed to variable costs into a single cost metric. They have been criticized for ignoring the effects of intermittency and non-dispatchability. This paper introduces the Levelized Full System Costs of Electricity (LFSCOE), a novel cost evaluation metric that compares the costs of serving the entire market using just one source plus storage. Like LCOE, and in contrast to alternatives such as System LCOE, LFSCOE condense the cost for each technology into one number per market. The paper calculates LFSCOE for several technologies using data from two different markets. It then discusses some refinements, including the LFSCOE-95 metric that require each technology to supply only 95% of total demand.

Suggested Citation

  • Idel, Robert, 2022. "Levelized Full System Costs of Electricity," Energy, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:energy:v:259:y:2022:i:c:s0360544222018035
    DOI: 10.1016/j.energy.2022.124905
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    References listed on IDEAS

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    8. Steele, Amanda Harker & Sharma, Smriti & Pena Cabra, Ivonne & Clahane, Luke & Iyengar, Arun, 2023. "A tool for measuring the system cost of replacement energy," Energy, Elsevier, vol. 275(C).
    9. Rafał Wyszomierski & Piotr Bórawski & Aneta Bełdycka-Bórawska & Agnieszka Brelik & Marcin Wysokiński & Magdalena Wiluk, 2025. "The Cost-Effectiveness of Renewable Energy Sources in the European Union’s Ecological Economic Framework," Sustainability, MDPI, vol. 17(10), pages 1-29, May.
    10. S. V. Zhukov & O. B. Reznikova, 2024. "The Crisis of the Electricity Sector in the EU Countries: Dynamics, Driving Forces, and Prospects," Studies on Russian Economic Development, Springer, vol. 35(1), pages 60-71, February.
    11. Yuhji Matsuo, 2022. "Re-Defining System LCOE: Costs and Values of Power Sources," Energies, MDPI, vol. 15(18), pages 1-39, September.
    12. Per Fahlén & Magnus Henrekson & Mats Nilsson, 2026. "In Pursuit of the Green Transition—Electricity at Any Cost?," International Studies in Entrepreneurship, in: Magnus Henrekson & Christian Sandström & Mikael Stenkula (ed.), A Green Entrepreneurial State?, pages 149-172, Springer.

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