Assessing the Economic Value of New Utility-Scale Renewable Generation Projects Using Levelized Cost of Electricity and Levelized Avoided Cost of Electricity

On July 25, the Energy Information Administration (EIA) hosted a workshop examining  the various uses of the concept of levelized cost of electricity (LCOE), its shortcomings, and potential alternatives to provide a more representative measure of the economic value for power generation projects. Experts from the power industry, policymakers, and energy analysis communities presented differing perspectives of the use of LCOE analysis and the need for better analytic tools for an increasingly complex grid environment.  In particular, Chris Namovicz from EIA presented the concept of levelized avoided cost of energy (LACE) as a proposed solution to many of the problems with conventional LCOE analysis. About 60 people attended the workshop in person, and over 80 participated via the live online webinar.

EIA's draft paper on Levelized Cost and Levelized Avoided Cost of Electricity and its methodology supplement

Workshop Agenda Welcome Howard Gruenspecht, Deputy Administrator, EIA J. Alan Beamon, Director, Office of Electric, Coal, Nuclear, and Renewable Analysis, EIA Presentations Chris Namovicz (Energy Information Administration) - Assessing the Economic Value of New Utility-Scale Generation Projects Victor Niemeyer (Electric Power Research Institute) - LCOEs and Renewables Kevin Rennert (Staff, Senate Energy and Natural Resources Committee) - Policymaker perspective on use of LCOE George Taylor (American Tradition Institute) - Improving Completeness and Accuracy of Cost of Electricity Calculations Discussant Responses Michael Leifman (GE Power & Water) - LCOE and LACE: Seeking Simplicity Sam Baldwin (Department of Energy, Office of Energy Efficiency and Renewable Energy) - LCOE and LACE Panel discussion/Q&A Dallas Burtraw (Resources for the Future) - Moderator   Questions or comments? Contact christopher.namovicz@eia.gov