CRITICAL REVIEW OF THE LEVELISED COST OF ENERGY METRIC

Authors

  • M.D. Sklar-Chik Eskom Power Plant Engineering Institute, Eskom Holdings Department of Industrial Engineering, Stellenbosch University
  • A.C. Brent Department of Industrial Engineering, Stellenbosch University Centre for Renewable and Sustainable Energy Studies, Stellenbosch University
  • I.H. De Kock Department of Industrial Engineering, Stellenbosch University

DOI:

https://doi.org/10.7166/27-4-1496

Keywords:

Levelized Cost of Electricity, electricity generation projects, South Africa

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. 

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Published

2016-12-06

How to Cite

Sklar-Chik, M., Brent, A., & De Kock, I. (2016). CRITICAL REVIEW OF THE LEVELISED COST OF ENERGY METRIC. The South African Journal of Industrial Engineering, 27(4), 124–133. https://doi.org/10.7166/27-4-1496

Issue

Vol. 27 No. 4 (2016)

Section

General Articles

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