Hydropower remains one of the least-expensive energy sources. This remains true even despite recent cost increases. Since 2010, hydropower’s global weighted average levelized cost of energy has increased by 27% to around USD 47 per MWh in FY2019. This uptick is due to rising installation costs, which in turn are largely due to new projects being located in more challenging locations.
Over the past decade, costs trends within the renewable energy sector have been dramatically decreasing, making wind (as discussed in our post “Wind Energy LCOE Breakdown”) and solar two of the most competitive energy sources.
Our earlier post, “LCOE’s to compare energy investments”, focused on levelized costs of energy. This post will more closely examine LCOE’s for wind energy. In doing so, we will seek to understand the calculations and their unique charateristics, and explore the differences between offshore and onshore projects. Finally, we will present an overview of some selected countries and their respective LCOE’s.
Levelized costs of energy (LCOE) is one of the essential measures when it comes to energy-related projects, no matter the energy source, timespan, size, or location of the project. Not only provide LCOE’s a possible point of comparison across the various sources, but also a reasonable estimate and guideline of how power plants can break even, generate profit and eventually how expenditures need to be handled.