Levelized income loss as a metric of the adaptation of wind and energy storage to variable prices

Guzmán Díaz, José Coto and Javier Gómez-Aleixandre

Applied Energy, 2019, vol. 238, issue C, 1179-1191

Abstract: Classifying and categorizing generators according to their financial efficiency is necessary to compare the degree of competitiveness of a generating technology. The levelized cost of energy (LCoE) is arguably the most relevant index for that purpose. It relates the capital and operating expenses to the expected energy output, to encapsulate the financial efficiency into an €/MWh. It is technology-independent, meaning that it can be used for comparing different generator types in a fair basis. However, the LCoE is defined to provide a cost figure under the assumption of a fixed-tariff. It does not make any difference when comparing the performance of an intermittent generating technology in different spot markets. The LCoE does not inherently account for the variability of prices.

Keywords: Wind energy; Energy storage systems; Optimization; Dynamic programming; Stochastic processes; Dynamic linear models; Economic valuation (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.apenergy.2019.01.169

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