Only Geothermal Offers Renewable Energy Economies (Real Clear Energy)
The U.S.
Energy Information Administration (EIA) has developed a standard for predicting how economical every technology will be when added to the grid. There are two standards: 1) levelized cost of electricity (LCOE), and 2) levelized avoided costs (LACE). Levelized costs measure the cost per kilowatt over the life of the plant. Levelized avoided costs indicate the costs that are avoided by not building another form of generation. If LACE exceeds LCOE, then the technology is judged economical.
Under this standard, only two forms of generation are deemed economical – combined cycle natural gas plants and, first among renewable energy, geothermal. Because geothermal is limited to a few special sites, however, it cannot be widely employed. Nuclear doesn’t do badly, better than coal and much better than coal with carbon capture and storage. Wind is just within the margin of profitability as is hydroelectric. But solar is still far more expensive than any other technology.
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