Bloomberg New Energy Finance has released its annual volume, Sustainable Energy Factbook, published January 31. Included is the chart above, which compares the levelized costs for 24 different technologies for generating electricity.
The bars represent the range of levelized costs at different facilities, with the blue triangle within the bars representing the current midpoint. Levelized costs measures the total of all expenses, including construction, operation and maintenance, fuel and decommissioning, divided by the expected lifetime output of the plant. These costs, represented on the horizontal axis, are measured in dollars per kilowatt-hour (kw-h), from zero to $500. Natural gas, coal, nuclear and hydro remain the cheapest, while solar in its various forms is by far the most expensive.
Natural gas with combined cycle (CCGT), coal, nuclear, large and small hydro, geothermal, landfill gas and onshore wind all have levelized costs below $100 per kw-h. Large and small hydro facilities, however, have a range of costs that stretches as high as $300.
All forms of solar energy have midpoints above $100 and concentrated solar power - the large installations usually built in the desert - go as high as $500 per kw-h. Offshore wind also has a midpoint of $220 and a high range of $325.
What drives up the levelized cost of wind and solar is their low capacity factor, generally around 20 percent for solar and 30 percent for wind. Despite their "nameplate capacity" - the figure usually quoted in the press - wind and solar facilities are usually generating electricity only 20 to 30 percent of the time. This increases their levelized costs by a factor of 3 to 5 times. Capacity factor also affects large and small hydro, since many dams must be operated on a seasonal basis due to rainfall patterns and fish migrations.
Nuclear, on the other hand, although the most expensive to build, has an industry-wide capacity factor above 90 percent, the highest for any form of generation. Reactors also have life expectancies of at least 40 to 60 years, as opposed to only 20 years for wind, solar and natural gas. This keeps nuclear's levelized costs low, despite the initial high costs of construction.
The only way to improve wind and solar's capacity factor will be to devise some system of commercial-scale energy storage. But this will not necessarily reduce levelized costs and is more likely to raise them. The most expensive form of electrical generation, according to the Bloomberg chart, is concentrated solar facilities with parabolic troughs and storage capacity. Their midpoint is $260 with a maximum of $500 per kw-h.