U.S. EIA: Geothermal very competitive on levelized cost of electricity basis
Geothermal energy remains a very attractive source of electricity, based on recent data published by the U.S. Energy Information Administration (EIA). Geothermal represents the lowest levelized cost of electricity in comparison to other sources of energy.
In a paper published earlier this month, EIA, the U.S. Energy Information Administration, shared its findings of a research on average values of levelized costs (LCOE) for generating technologies entering in service 2018, 2022 and 2040.
These findings are represented in the National Energy Modelling System (NEMS) for the Annual Energy Outlook 2016 (AEO2016) Reference case.
Levelized cost of electricity (LCOE) is often cited as a convenient summary measure of the overall competitiveness of different generating technologies. It represents the per-kWh cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle. Key inputs to calculating LCOE include capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs, financing costs, and an assumed utilization rate for each plant type.4 The importance of the factors varies among the technologies.
The report highlights the competitiveness of geothermal energy in the U.S. energy market.
For the capacity weighted average LCOE based on 2015 $/ MWh for plants entering into service in 2022, sees geothermal as very competitive. It has the highest capacity factor of 91% and a levelized capital cost of $27.8/ MWh. … the total LCOE including tax credit is $39.5/ MWh, by far the lowest followed by Wind (on shore) with $50.9/ MWh, natural gas with $55.8-56.4/ MWh, solar PV at $58.2/ MWh and hydroelectric at $63.2/ MWh.
The report provides also different scenarios, but all see geothermal as highly competitive on a LCOE basis. The above chart therefore provides only an overview for one scenario. To read the full report see link below.
Source: U.S. Energy Information Administration (pdf)