This study is the sixth in a series on projected costs of generating electricity carried out and published by the OECD. It has been undertaken jointly by the Nuclear Energy Agency (NEA) for the Committee for Technical and Economic Studies on Nuclear Energy Development and the Fuel Cycle (NDC) and by the International Energy Agency (IEA) for the Standing Group on Long-Term Co-operation (SLT). In order to conduct the study, the two agencies convened an ad hoc group of experts which met three times between December 2003 and November 2004.

This study is the sixth in a series on projected costs of generating electricity carried out and published by the OECD. It has been undertaken jointly by the Nuclear Energy Agency (NEA) for the Committee for Technical and Economic Studies on Nuclear Energy Development and the Fuel Cycle (NDC) and by the International Energy Agency (IEA) for the Standing Group on Long-Term Co-operation (SLT). In order to conduct the study, the two agencies convened an ad hoc group of experts which met three times between December 2003 and November 2004.

Like the previous studies in the series, the present report is based upon technical information and cost data provided by experts from participating countries. Costs and technical data were collected through a questionnaire sent to members of the expert group and experts from countries which were not represented in the group but were willing to contribute information for the study.

This chapter gives an overview on the costs of electricity generation calculated with generic assumptions for the coal, gas and nuclear power plants considered in the study. It covers investment, operation and maintenance and fuel costs as well as levelised generation cost at 5% and 10% discount rates for a total of 63 plants (27 coal plants, 23 gas plants and 13 nuclear plants). The levelised generation costs were calculated assuming 85% average load factor. For coal and nuclear power plants the economic lifetime was assumed to be 40 years although many countries reported longer expected technical lifetimes.1 For gas-fired plants, most countries reported shorter technical lifetimes, between 20 and 30 years, and in each case economic lifetime was assumed to be equal to technical lifetime. Fossil fuel prices and nuclear fuel...

This chapter gives an overview on the costs of electricity generation for the wind, hydro and solar power plants considered in the study. The generic framework and assumptions adopted to calculate levelised generation costs for those plants have been adapted to reflect their specific characteristics. The economic lifetimes assumed for cost calculations are the technical lifetimes indicated in responses to the questionnaire; in most cases, those lifetimes are shorter than the 40 years adopted as generic assumption for coal and nuclear power plants. Also, the average availability/capacity factors reported for those plants and used to calculate levelised costs are significantly lower than the generic 85% adopted for coal, gas and nuclear power plants.

Combined heat and power plants were considered in previous studies and methodological issues raised by estimating the costs of generating electricity and heat with dual-product plants were discussed, in particular in Appendix 4 of the 1998 update of the report (OECD, 1998). However, the analyses carried out so far in the context of studies in the series remained qualitative. In the present study, an attempt was made to provide quantitative estimates of electricity generation costs for CHP plants, relying on a generic approach and a methodology commonly agreed upon by the group of experts.

This chapter summarises the information collected and the results obtained for power plants relying on various technologies and energy sources besides the plant types covered in Chapters 3 to 5. Cost estimates calculated for those plants are presented below in five sections on distributed generation (3 plants), waste incineration and landfill gas (3 plants), combustible renewable (2 plants), geothermal (1 plant) and oil (1 plant). In the light of the limited number of data for each technology or energy source, the costs should be considered as indicative only and not necessarily representative of average trends.

This study is based on data on cost elements contributed by officially appointed national experts. The generation cost calculations are carried out by the Secretariat using the levelised cost methodology and generic assumptions commonly agreed upon by the group of experts. The objective of the study is to assess important cost factors in power generation projects. The study is to serve as a resource for policy makers and industry professionals as an input for understanding generating costs and technologies better. It does not intend to replicate the investment decision that an investor is confronted with in a concrete project. The findings and conclusions drawn from the results presented in the report are valid within...