CRITICAL REVIEW OF THE LEVELISED COST OF ENERGY METRIC
Abstract
The purpose of this paper is to critically review the ‘levelised cost of energy’ metric used in electricity project development. This metric is widely used, because it is a simple metric to calculate the cost per unit of electricity for a given technology connected to the electricity network. However, it neglects certain key terms such as inflation, integration costs, and system costs. The implications of incorporating these additional costs would provide a more comprehensive metric for evaluating electricity generation projects, and for the system as a whole. It is therefore recommended to refine the metric for the South African context.
Keywords
Levelized Cost of Electricity; electricity generation projects; South Africa
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PDFDOI: https://doi.org/10.7166/27-4-1496
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