Thursday, August 23, 2012

The Cost of Generating Electricity: A Primer



The Institute for Energy Research study quoted and linked below provides a nice run down on comparative costs of generating electricity through different power plants.

The cost of generating electricity includes the capital cost, the financing charges, and the production or operating costs (including fuel and maintenance of the technology) at the point of connection to an electrical load or the electricity grid. When determining what new plant to build, a utility company will compare all these costs across the slate of available generating units. Once the capital and finance costs are paid, usually after 20 to 30 years, the cost of operation is just the fuel and maintenance costs. As a result, the generating costs for a plant paying sizable capital costs are much different from those for a plant where those costs have been totally paid.

In short, electricity from a new power plant costs a lot more than electricity from an older power plant that has paid off the cost of construction and financing.


As shown above, conventional and advanced combined cycle power plants fueled by natural gas have the lowest levelized cost for new electrical generation at approximately $75 per megawatt hour while off shore wind, solar photovoltaic and solar thermal have the highest levelized costs at $325, $150 and $250 each.

Geothermal and land based wind are competitive with coal and hydroelectric at around $100 per megawatt hour.

As the more and more people climb the ladder of success globally more and more electricity will be required.  Advocates of IPD, BIM and lean processes should be prepared to deliver innovative and cost effective solutions.



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James L. Salmon, Esq.
Collaborative Construction
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2 comments:

Michael Bordenaro said...

We can model that! As a matter of fact, we are showing a State Senate candidate how models of this type of data "mashed up" with building models and geography models can create jobs. Keep keeping us informed on all of these topics.

FatLoss Magazine said...

Alternative Ways Of Producing Electricity