Talk:Cost of electricity by source/Archive 2

Archive 1

Archive 2

Hydro capital costs missing

The "Capital costs" section misses figures for hydroelectric power. Does anybody know where to find these? --46.242.13.129 (talk) 00:21, 18 July 2019 (UTC)

Methodology

In an economic evaluation you are supposer to test your model on a case. Duke energy project cost 3.8 billions for 600MW. AMP Ohio cost 3 billions for 1000MW. Wisconsin Power & Light cost annonced 3500$/kW for it's 300MW project at Nelson Dewey. So it's about 2c/kWh without cost of coal, employee, maintenance, taxes. A rule of thumbs is 3 time the cost of investment (25% cost of investment 75% cost of usage) because it's a low intensity project. On the other side, you can't find any supplier of renewable that can give a cost per MW because of the intermitent nature of renewable but at 4c/kWh producers make a lot of money. — Preceding unsigned comment added by 174.89.210.231 (talk) 18:54, 14 August 2019 (UTC)

Move minutia of calculation below current estimates

The current structure has almost 2,500 words before it gets to the key data. While a definition of the concept belongs in the introduction, I'd like to move the caveats, source-specific concerns, etc., lower in the page on the theory that they are of less interest to the common reader. --Sampenrose (talk) 23:57, 15 January 2019 (UTC)— Preceding unsigned comment added by Sampenrose (talk • contribs) 20:23, 13 January 2019 (UTC)

I'm hoping to swap the first two sections later this weekend. Sampenrose (talk) 01:46, 2 November 2019 (UTC)

This is done. Sampenrose (talk) 20:30, 3 November 2019 (UTC)

Global section deletion

@Sampenrose: Can you elaborate on your recent deletion decisions? Daask (talk) 15:22, 2 November 2019 (UTC)

Sure, thanks for asking. Broadly, two years ago I noticed that this page led with outdated information, some of it in oldest-first order. Timeliness is essential to an accurate page because the story of the last 20 years is that the cost of electricity from wind turbines and solar PV has become much lower. Specifics:

1. The Brazilian exergy topic was unrelated to the rest of the page.
2. The "Global" subsection inside the "Regional and Historical" section was outdated, as was the Brookings 2014 study and the paragraph criticizing it (which looks Talk-y to me). The Buffet and Bin Rashid were not studies but data points.

Let me know if you have a different perspective, and see also my other suggested improvements. I believe this page would make more sense with the following structure:

1. The current opening two paragraphs.
2. Current global LCOE studies.
3. Maybe a few current regional studies and / or important data points (i.e. because offshore wind installations are few and large, a single data point is meaningful).
4. The current section on methodology.
5. A brief section on the history, pointing to a separate page.

This amounts to swapping the methodology and current sections, and moving history to its own page. Also, the page title is a bit of a misnomer. "Levelized cost of energy" is what the electricity industry uses, not "cost by source." I assume that ship has sailed as far as Wikipedia is concerned.

Thanks for your helpful contributions to this page! @Daask: Sampenrose (talk) 22:16, 2 November 2019 (UTC)

There's no misnomer, this article is mostly (but not exclusively) about listing Levelised Cost of Electricity by source. But it also includes capital costs, avoided cost etc. etc. by source. GliderMaven (talk) 23:50, 2 November 2019 (UTC)

Thanks for the correction; my comment was imprecise and yours is on point. That said, insofar as we want Wikipedia to reflect the state of the usage broadly, "levelised cost of electricity" is a much better term. A search on Google Scholar for it in quotation marks returns 12,000 results, while "cost of electricity by source" returns 94. The numbers for www.google.com are 200K and 26K, respectively. I submit that if we are going to have one page, it should be for the term that is order(s) of magnitude more popular. Sampenrose (talk) 02:28, 3 November 2019 (UTC)

The primary article topic is not LCOE, it is how cost compares between the different generation modalities. However, if you wish to try to rename the article, there's a process to be followed. GliderMaven (talk) 20:48, 3 November 2019 (UTC)

Clarify headline costs in "Recent global studies"

The recent global studies draw on large data sets of individual facility costs and produce cost ranges; in the current prominent table some rows are lowest (Lazard) and some are average, resulting in an apples-to-orange comparison.

For renewables, we probably want to show both lowest and average costs; the former can be a better guide to the costs relevant to readers because of this dynamic:

1. Researchers gather data on costs the year before study publication (say, 2018).
2. The study is published (2019). Meanwhile, renewable costs continue to fall.
3. A member of the public reads about a proposed electric generation decision in 2020 for a plant that will begin operation in 2023.
4. They come to this page (in 2020) to compare costs by source; meanwhile renewable costs have continued to fall.
5. They read the studies, all of which project further reductions in cost through 2023.

Separately, while renewable generation has trivial running costs, the LCOE of running a depreciated fossil fuel plant is very different from the LCOE of building a new one. We should therefore:

1. Create columns for "lowest" and "average" that hold those values for renewables.
2. Decide whether to pack fossil fuel values into the same columns: "lowest becomes" "lowest or fully depreciated" and "average" becomes "average (or undepreciated)" or to widen the table and make it sparse.
3. Decide whether to add a column for future estimates (i.e. of further deflation for renewables), and if so whether it should be tied to one year, or whether the value includes the year.

Sampenrose (talk) 15:48, 4 November 2019 (UTC)

Changes to this section just now:

1. Updated BNEF, IRENA, and Lazard studies to use this year's instead of last year's.
2. Made table more informative by including multiple costs per source.
3. Removed duplicate "Bloomberg" and low-information "Banks" entries.

Sampenrose (talk) 22:00, 24 November 2019 (UTC)

Use newest IRENA and Lazard studies

The "Recent global studies" points at sources which have since had annual updates:

- Lazard: https://www.lazard.com/media/451086/lazards-levelized-cost-of-energy-version-130-vf.pdf - IRENA: https://www.irena.org/publications/2019/May/Renewable-power-generation-costs-in-2018 Sampenrose (talk) 17:06, 10 November 2019 (UTC)

This is done; see "Clarify headline costs ..." for details. Sampenrose (talk) 21:56, 24 November 2019 (UTC)

Reorganize around recent high-quality references

Per the most recent comment by Jray310, this article contains more old information than is helpful for understanding its topic. In particular, recent studies for LCOE of solar PV and wind document that they have dropped sharply, which it inappropriate to place 5 year old studies next to them. I propose the following series of changes:

Simple changes:

1. Remove references to the 2009 study and the 2012 study (note: the latter's validity was questioned in the text) as outdated. (Done.)
2. Remove reference to Brazilian 2014 study focused on exergy, which is a separate topic.
3. Remove reference to the 2014 Brookings study which on page 10 cites capacity factors of < 20% for wind and solar, which is not accurate (34%/24% in 2016 according to EIA ).
4. Update the EIA study retrieved 11/12015 with the latest, from 5/2017 (op cit).
5. Remove the 2014 California study, which the new EIA study supersedes.
6. Remove the Lazard 2015 study, since we have the 2016. (That leaves us with 2 current US studies -- maybe compare and contrast findings?)
7. In the Cost Factors section, mention that methodology is study-dependent. Also mention the costs of pollution, which are thoroughly documented on Wikipedia's Coal page

Simple changes to the global section:

1. Summarize the 2015 IEA study, or summarize an equal-quality update if we can find one.
2. Delete the Buffet reference.
3. Delete (or move; see below) the Saudi solar reference.
4. Consider renaming to "World" (is there a Wikipedia style guideline?).

Structural changes:

1. Rename the "Renewables" section to something like "By Source."
2. For each source (coal, nuclear, solar, wind, etc) provide a subsection listing few simple recent references if we have them, favoring large scale studies.
3. Delete discussions of history, replacing with references to other Wikipedia pages such as https://en.wikipedia.org/wiki/Solar_power#Economics

Sampenrose (talk) 21:38, 29 July 2017 (UTC)

I removed the exergy section. Sampenrose (talk) 02:25, 2 November 2019 (UTC)

References

Tighten the opening

The opening currently has two somewhat meandering paragraphs, which could become one clear paragraph simply by dropping some of the sentences and rearranging others:

The levelized cost of energy (LCOE) is a measure of a power source that allows comparison of different methods of electricity generation on a consistent basis. It is an economic assessment of the average total cost to build and operate a power-generating asset over its lifetime divided by the total energy output of the asset over that lifetime. It assists policymakers, researchers and others to guide discussions and decision making. The cost is typically given per kilowatt-hour or megawatt-hour.

Since this article is not strictly about the LCOE, we need an introductory discussion of costs associated with electricity sources. Because of this I think the lead cannot be replaced only by what you propose. I still think the current lead can be improved though. Another option would be to change the article scope and to move it to Levelized cost of electricity. --Ita140188 (talk) 01:15, 25 November 2019 (UTC)

Without changing the topic, perhaps we should rename it to LCOE, and we could have other bolded terms as well. LCOE is supposed to be a consistent way to compare the costs of different modes of generation after all. GliderMaven (talk) 01:48, 25 November 2019 (UTC)

Thanks for the feedback. I'll look into starting a rename proposal if someone else doesn't get to it first. Related: @GliderMaven do you feel comfortable closing out the proposed merge into this page per the discussion there? Sampenrose (talk) 02:13, 25 November 2019 (UTC)

We can change the name of the article. However, we have to keep in mind that LCOE is not good when comparing traditional sources (such as coal) with variable output sources (such as wind). LCOE just tells you what is the cost of a kWh produced, not the value of it at the time when it is produced. So LCOE cannot be used by itself to compare different sources. --Ita140188 (talk) 02:17, 25 November 2019 (UTC)

Arguably. But we're not changing the topic, we'd just be changing the layout of the lead and the name of the article. GliderMaven (talk) 03:41, 25 November 2019 (UTC)

Requested move 28 November 2019

The following is a closed discussion of a requested move. Please do not modify it. Subsequent comments should be made in a new section on the talk page. Editors desiring to contest the closing decision should consider a move review after discussing it on the closer's talk page. No further edits should be made to this discussion.

The result of the move request was: no consensus to move the page to the proposed title at this time, per the discussion below. Dekimasuよ! 08:47, 14 December 2019 (UTC)

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Cost of electricity by source → Levelized cost of electricity – "Cost of electricity by source" is not the common name for this topic; "levelized cost of electricity" is. As of this writing, a Google Scholar search for '"cost of electricity by source" -wikipedia' returns 34 results, while one for '"levelized cost of electricity" -wikipedia' returns 12,400. For Google Web, the results are 20,000 and 204,000, respectively. Of the five characteristics of a good Wikipedia article title, "levelized cost of electricity" is superior on the first two and even on the next three. Sampenrose (talk) 16:43, 28 November 2019 (UTC) —Relisting. – bradv🍁 04:57, 9 December 2019 (UTC)

• Oppose – Levelized cost is discussed in the article, but is not the main subject of the article. Dicklyon (talk) 05:56, 29 November 2019 (UTC)

But this is the primary article for LCOE, and most of the article is about LCOEs for various technologies. GliderMaven (talk) 02:27, 30 November 2019 (UTC)

• Comment - I think we should have a separate article for LCOE, discussing how it is calculated, what are its limitations, and so on. This article should stay as a general cost comparison between different energy sources. --Ita140188 (talk) 08:24, 29 November 2019 (UTC)

The thing is, that article would have nothing in it; it would be a stub forever. GliderMaven (talk) 02:27, 30 November 2019 (UTC)

I don't think so, and anyway this is not a reason to not have an article about an obviously notable and encyclopedic subject. --Ita140188 (talk) 01:25, 1 December 2019 (UTC)

The only content I can think of would already be in this article. Unless you can specify what would be in it, I think the presumption has to be that it would remain extremely short, just a definition, or the new article would steal virtually all of the material from here, in which case, this article becomes very short. GliderMaven (talk) 02:45, 1 December 2019 (UTC)

@GliderMaven: The fact that you cannot think of other content is not a reason to not have an article. There is no requirement that a specific user knows how to expand a new article. The article just needs to be notable and encyclopedic, and LCOE is obviously both. --Ita140188 (talk) 11:06, 1 December 2019 (UTC)

@Ita140188: Absolutely incorrect. The relevant policy is: Wikipedia:Notability#Whether_to_create_standalone_pages. GliderMaven (talk) 00:09, 6 December 2019 (UTC)

I don't think any of this points apply to LCOE, which is a relevant topic that has extensive coverage, and there's potentially a lot to say about it (history, calculation, drawbacks..). I repeat, the fact that you don't know how to expand it, does not mean it cannot be an article by its own. --Ita140188 (talk) 00:25, 6 December 2019 (UTC)

The fact that you have been unable to provide any new material means you don't have enough material to make a new article. GliderMaven (talk) 17:37, 11 December 2019 (UTC)

There is enough material for a new article already. The new article is 10kb. --Ita140188 (talk) 00:48, 13 December 2019 (UTC)

You added no new material. Content duplication is not a new article. You haven't been able to provide any new material, nor did you successfully split the information out of this one-we still need it here. GliderMaven (talk) 01:33, 13 December 2019 (UTC)

Levelized cost of energy has already enough material to be an article by itself. This article (cost of electricity by source) can be further rewritten in light of the creation of the main article on LCOE. I will start doing this today. --Ita140188 (talk) 01:41, 13 December 2019 (UTC)

@Dicklyon can you address any of the rationales I laid out directly? I tried to follow the Wikipedia guidelines for proposing a move. Separately (and echoing GliderMaven), when I started editing this page more than two years ago it was in bad shape. There is a reason all of the recent updates from prominent sources refer to LCOE: no one as prominent as BNEF, Lazard, IRENA, the World Bank, etc. is using cost by source. They're all using LCOE. Finally, @Ita140188 if we did split off a separate LCOE article I could use help knowing the correct protocol to follow. Right now the phrase redirects to this one as the result of a years-ago editing decision. Sampenrose (talk) 04:03, 30 November 2019 (UTC)

• Support - Levelized cost of electricity seems to be the more common term by academia, government organizations and on internet in general with the meaning "Cost of electricity by source". As mentioned, many of the references used in this article use the term levelized cost of electricity, so a move seems like the right thing to do. Ws1920 (talk) 13:23, 30 November 2019 (UTC)

I think there is a difference between the LCOE and a comparison of LCOEs of different sources. It's the same difference between Gross domestic product and List of countries by GDP. I am ok with changing the title of this article to LCOE by source or something like that, but it remains a comparison article. I think we still need an article specifically about LCOE. --Ita140188 (talk) 01:25, 1 December 2019 (UTC)

We already have an article specifically about LCOE, this is that article. The point of Wikipedia's renaming process is that the contents of the article don't depend on the precise name. We're not actually changing the scope of the article, only how you find it. GliderMaven (talk) 02:49, 1 December 2019 (UTC)

Another factor is that the cost by source parts, currently section 2 more-or-less, are simply not as good. The references are old and with a few exceptions less prominent than the new LCOE references. Per the 34 to 12,000 ratio on Google Scholar, that seems to be because the professional conversation has moved on. It also feels like a bit of a jumble: the "Marginal" subsection is two sentences that sound like the belong on the talk page, or broken out into an "Alternatives" section. There is a value to simply having a coherent, up-to-date page. We can do that for LCOE; no one has yet done it for cost by source. Sampenrose (talk) 03:33, 1 December 2019 (UTC)

• Support The current name is clearer, but 'LCOE' is better in accordance with WP:TITLE and doing that helps sort out the WP:LEAD issues we currently have. In terms of content the article already has to cover how LCOE varies with generation modality as well as location, and already all of the studies we're quoting use LCOE. Wikipedia articles aren't about the title anyway, so the content is unaffected. GliderMaven (talk) 02:45, 1 December 2019 (UTC)

  It looks to me like LCOE is one of several ways to compare costs and that the article discusses others. A separate article on LCOE might be a better idea. Dicklyon (talk) 05:14, 1 December 2019 (UTC)

Point of order, the discussion is only about renaming the article; this isn't about rescoping it or changing the text other than that. GliderMaven (talk) 22:06, 1 December 2019 (UTC)

• Oppose per my arguments above. I think we should have a new dedicated article about LCOE. LCOE by itself is obviously notable as others have pointed out by number of search results. But as I said above, there is a difference between LCOE and a comparison of LCOEs of different sources. It's the same difference between Gross domestic product and List of countries by GDP. We can discuss about renaming this article LCOE by source though. --Ita140188 (talk) 11:02, 1 December 2019 (UTC)

Having a separate article actually violates WP:Notability, there's a specific subsection about that, that wouldn't be satisfied. GliderMaven (talk) 00:09, 6 December 2019 (UTC)

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The above discussion is preserved as an archive of a requested move. Please do not modify it. Subsequent comments should be made in a new section on this talk page or in a move review. No further edits should be made to this section.

Ita140188 / GliderMaven

Original heading: "Ita140188 seems to be trying to destroy the article." ~ ToBeFree (talk) 22:51, 12 January 2020 (UTC)

Collapsing: This discussion is too heated and personal to lead to any productive result. If an editor disagrees about the existence of an article, WP:AFD is the correct venue to gain consensus for deletion. ~ ToBeFree (talk) 22:51, 12 January 2020 (UTC)
The following discussion has been closed. Please do not modify it.
The article, as it stood, defined methods for measuring how much electricity costs, and then lists representative examples for different situations. Ita140188 seems to be trying to effectively destroy the article. By moving the methods of calculating costs completely out of sight and away from the examples, the article becomes so much harder for readers. Don't readers deserve to have an article that covers electricity costs? Because Ita140188 apparently doesn't think so? GliderMaven (talk) 16:01, 13 December 2019 (UTC) I actually put a lot of work on making this article better, while being continuously reverted by you. For example, your revert reintroduced this sentence: [..] Thermally lethargic technologies like coal and solid-fuel nuclear are physically incapable of fast ramping. However, many designs of Generation 4 molten fuel nuclear reactors will be capable of fast ramping because (A) the neutron poison xenon-135 can be removed from the reactor while it runs leaving no need to compensate for xenon-135 concentrations [10] and (B) the large negative thermal and void coefficients of reactivity automatically reduce or increase fission output as the molten fuel heats or cools, respectively.[11] in the middle of a discussion about how to calculate LCOE. Does it make sense? Do you think an out of context detailed discussion of nuclear physics makes the article better? --Ita140188 (talk) 02:25, 14 December 2019 (UTC) No, it doesn't. GliderMaven (talk) 22:37, 12 January 2020 (UTC) If you don't even know why fast ramping, expensive infrastructure is incapable of delivering low cost, then you should stop right away. Literally no country has ever, or will ever, run only nuclear power. It's propaganda by the nuclear industry to push nuclear reactors. Nuclear reactors are virtually never voluntarily run demand following. Yes, they can physical ramp, yes, they can physically do it, and on occasion they may even do it, but no it doesn't matter, because they're too expesnive. A nuclear reactor running at half load is making electricity that is twice as expensive than one that is run flat out. GliderMaven (talk) 22:37, 12 January 2020 (UTC) From experience all your edits only harm the article. You seem to be trying to make a career out of damaging this article. Go away. Don't come back. GliderMaven (talk) 22:37, 12 January 2020 (UTC) Actually I removed that sentence, you are the one that reintroduced it. --Ita140188 (talk) 22:41, 12 January 2020 (UTC)

Improve Introduction and Structure

LCOE, Avoided Cost, and Marginal Cost are not "Cost Factors". They are ways of addressing the problem of comparing different relations between the timing of expenditure and product. So I would follow the introduction with a new section 1 which combines the second paragraph of the current introduction with the current 1.3, 1.4, and 1.5

Also in the current introduction, the first paragraph could be improved in various ways - some trivial and some less so.

-on the trivial end, "ways of electricity generation" sounds ungrammatical or at least contrary to common English usage. Better would be either "methods of electricity generation" or "ways of generating electricity" or "ways to generate electricity".

-since discounting of advanced or delayed costs is very relevant it might be advisable to add "which may occur at significantly different times relative to when the power is used" at the end of that first sentence

-I would move the third sentence to a second paragraph since there is a lot more to be said on that score

-Although a discount rate is included in the various ways of getting a per unit cost it is not actually a component of the cost itself, so I would omit it from the list of things that "It" includes

-Also, the initial capital is not included (as a total) in the unit cost of power so I would replace the "It" there with "The total cost" and leave the discussion of unit costs to the proposed second paragraph.

In fact I guess I'll just make the proposed edits now and see how long they survive.

alQpr (talk) 00:48, 6 January 2020 (UTC)

Can we remove the EIA 1st image?

Hey all, I updated the EIA tables (both of them) to add the new 2020 EIA AEO LCOE data. In the beginning of the EIA section, we have an image which is just a visual representation of the table that immediately follows. I updated the image with the 2020 data as well. But I don't think the image really adds anything to the section since its just a repeat of the table below.

Is anyone opposed to me removing the image?

--Keanwood (talk) 01:17, 10 May 2020 (UTC)

Ok for me. It would be helpful to have a graphic representation of the numbers (without unnecessarily repeating the numbers) but that figure is of poor quality. --Ita140188 (talk) 01:40, 10 May 2020 (UTC)

Dubious cost of nuclear energy

The first graph of Global studies states the cost of nuclear to be $164/MWh. In France, ARENH forces EDF to sell nuclear power to other electricity companies at €42/MWh. An independent study suggested a new price of €48 to reflect the real cost where EDF itself said it costs €52. How can Lazard be so off, even in its 129-198 USD range? Should we add a warning to users? Uzinagaz (talk) 11:31, 16 March 2021 (UTC)

I think it's the difference between new build nuclear and old build nuclear. The French fleet was built decades ago, and inflation and asset depreciation has reduced the cost of the electricity in today's prices. A similar thing happens with coal plants. GliderMaven (talk) 14:29, 16 March 2021 (UTC)

China EPR price tag was 7.5 billion USD, roughly 4,540 USD/kW of installed capacity (Wind is currently at roughly 1,000 USD/kW but has a much lower load factor and lifespan). With a 80% load factor over 60 years, it will produce 694,267,200 MWh of electricity, bringing the cost to 10.8 USD/MWh. Add that to the ARENH revisited price (that already includes deconstruction + spent fuel storage + running costs + maintenance + fuel cost), it's 70 USD/MWh. Granted, it does not include the cost of financing but it's a far stretch from 160. What am I missing? Can we add the "disputed section" tag while we understand this? Uzinagaz (talk) 20:10, 16 March 2021 (UTC)

No, that's not how Wikipedia works. Editors don't modify an article based on their own research, this is called original research and is not permitted here. Rather, a reliable source has to be cited in order to support the information before it can go in the article. Further down the road comes how to present different sources with a Wikipedia:Neutral point of view. Lklundin (talk) 20:22, 16 March 2021 (UTC)

You are right to point out I did not make my initial suggestion clear. I am suggesting to remove (or adjust with more information) the figures because:

1. The source publication is not peer reviewed (it's written in the source document "source: lazard estimates" - which doesn't give the calculation hypothesis to verify. How is that more reliable than my demonstration?)

2. A back-of-the-envelope calculation allows to question the validity of the publication's figures

3. The section does not state the notes on the source document that give off essential information to correctly interpret the figures

I'll add to my suggestion to also remove the BNEF statement that is simply plain wrong. You cannot compare intermittent energy costs with controllable energy costs without adding at least storage costs (or controllable energy costs). Using their own figures present there, solar or PV comes out more expensive than anything else. Uzinagaz (talk) 21:15, 16 March 2021 (UTC)

As the editor who has been updating this page with the Lazard data as it comes out, I'm sympathetic to Uzinagaz's argument that the Lazard estimate is not a good guess at the LCOE of future nuclear SMRs. The EIA guesses they'll be around $70/MWh in 2026: https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf which roughly matches what I've seen elsewhere. But the LCOE studies that this section is based on existing data from new deployments, and we simply have many fewer of those. (Should we count Vogtle's obscene cost overruns?) Nuclear poses challenges to anyone seeking apples-to-apples comparisons. You project a very long lifetime for nuclear plants, which is legitimate, but you don't appear to include a non-0 discount rate, which is IMHO not legit, or a cost of fuel disposal, which is AFAICT impossible: could be negative (fuel is reprocessed) or gigantic (Hanford). Note that the challenges of getting reasonable estimates are not confined to nuclear: IRENA, which unlike BNEF or Lazard is in the business of promoting wind and solar and therefore "biased", has implausibly high estimates for their costs—the opposite of what you would expect from their "bias". Your criticism of BNEF is unjust: they are quite aware of the wide range of costs that can be included or left out, and they do their best. You only cite the omissions whose inclusion would favor nuclear. NuScale and Oklo are working to deliver SMRs at, IIRC, ~$4,000/kw installed; once they are doing that we should have several up to date LCOE values for nuclear under $100. Until then, the best we can do as stewards of this page is to **find good data sources and add them**. I particularly encourage you to put country-specific nuclear data in country sections. In short: cost estimates are complicated, especially for nuclear. As Wiki editors, let's work together to gather and cite the best ones we can find. As a citizen, I like you am rooting for a nuclear renaissance, but that shouldn't affect what I put on this page. Sampenrose (talk) 02:33, 17 March 2021 (UTC)

Discount rate has little to 0 impact on nuclear electricity cost. Has stated previously, the back-of-the-envelope calculation I provided does not include financing cost that may or may not be relevant depending on how the project is financed (see Cloud200 answer below too). ARENH price includes fuel disposal costs (based on Deep geological repository) so it's already factored in. France has 13% of the world running nuclear reactor by count (58 out of 440) and 15% by installed power (61.4 GW out of 399). If Lazard range does not include this cost, is it representative of reality? I do think nuclear power could help in the climate change challenge (but it doesn't cloud my judgement as going full nuclear is impossible anyway, at least without Breeder reactor), so I spend a lot of time researching it. The figure jumped at me, making me question the validity of it and starting this talk. Now I realize that the problem is not only for nuclear power. The Global studies section does not warn the user of the difficulty to appreciate the cost of electricity globally nor the parameters in play. It also does not warn him of the validity of trying a global approach. At the very least, a global cost estimate should at least propose a range by source to reflect reality and stay as neutral as possible. I favor quality over quantity, if the current sources are too limited, they should not be there. Uzinagaz (talk) 13:13, 17 March 2021 (UTC)

In all economic models of power generation there are two critical factors that can make energy very expensive or very cheap, both on paper and in reality: Discount rate and cost of financing. Incidentally, in most nuclear power economic models (including LAZARD), for nuclear these parameters are always somehow set to the worst-case scenario. Discount rate is set to a very high value (8-12%), basically meaning that the nuclear power plant loses economic value after 10-20 years, which is utterly stupid if look at nuclear power plants providing the same amount of energy after 60 years of operations. The second factor, cost of financing, is more realistic - cost of private financing of nuclear power plant is very expensive and takes up to 60% of its price. Just to repeat: up to 60% of some nuclear power plants is the loan interest. In countries where power infrastructure is publicly funded, this cost if obviously negligible, as you have noticed already in case of China. All that is explained pretty well in these two articles:

• Cost of nuclear for dummies, and future generations
• The Hinkley Point C case: is nuclear energy expensive?
• VALUATION KEYSTONE KOPS: LAZARD, EVERCORE& TSLA
• Q&A: The social cost of carbon: How important is the discount rate?

I suppose the first one could be used as a WP:RS, but I'm also pretty sure this criticism of LAZARD methodology is also present in literature. Also, nothing prevents you from adding ARENH or any other actual nuclear electricity pricing data to the article if they can be referred to WP:RS and they are not used to criticise LAZARD directly ("look, these prices are lower!") but any thinking reader can compare these two and draw their own conclusions. Cloud200 (talk) 22:20, 16 March 2021 (UTC)

Your first link does question the methodology validity of Lazard for nuclear costs. If this part is questionnable, how could we trust the rest? It is my understanding that a source can be quoted when it is reliable. My point is that it might not be and I'm asking for other's opinion. Uzinagaz (talk) 13:13, 17 March 2021 (UTC)

Because LCOE is what it is - it doesn't claim to describe the actual price of energy from existing or new power plants. It's an financial tool for investment evaluation, pretty much like ROI, it doesn't care about CO2 or anything else but describes a particular parameter from investor's perspective. The fact that it's widely misinterpreted as "cost of energy" is another question and initially renewable energy supporters protested against it just as much as nuclear, but then LCOE started to show renewables as cheap so they calmed down. The article probably should have big fat warning on the top about misinterpreting the LCOE formula. Cloud200 (talk) 14:07, 17 March 2021 (UTC)

I would be confortable with any figure as long as the give off the LCOE parameters they used. Unfortunately, the page as is perpetuates the misconception you described by giving too obscure numbers. Where would you put the warning you mentioned? Uzinagaz (talk) 15:54, 17 March 2021 (UTC)

Proposed changes

Based on the review on the article and partially on the above discussion I would like to propose the following changes:

• Move the Per-unit cost metrics above the Global studies section to prevent casual readers from jumping into conclusions before they understand what they are looking at
• Add a bold note in the Global studies section referring to the LCOE article for disclaimers about the caveats of LCOE formula
• Remove the chart in the beginning of Global studies section as it serves as the best self-proof of the confusion caused by the concept of LCOE: averaging estimates from studies based on radically different assumptions (capacity factor, discount rate) is not only WP:OR but also ridicules the authority of Wikipedia as reputable source.

Cloud200 (talk) 18:17, 19 March 2021 (UTC)

I am blocking consensus on these proposals, noting "ridicules the authority of Wikipedia" as not in scope for editing decisions. Sampenrose (talk) 02:47, 20 March 2021 (UTC)

I tried removing the graph with the averages, but I was reverted by Sampenrose. I don't want to start reverting reverts, but this is a very clear case of WP:OR. In particular, it is definitely not a routing calculation (WP:CALC) and as this talk page discussion proves, there is no consensus for it. So I would be grateful if another user would take a look and fix this. --Ita140188 (talk) 02:19, 20 March 2021 (UTC)

Hi Ita140188 Regarding "There is no consensus for it", I translate that as "I made a unilateral decision to remove sourced material from another user and got reverted." Regarding "this is a very clear case of WP:OR", you have not made that case. I have reviewed WP:OR and do not see it. The bar graph presents the table in graphic form, as is common on Wikipedia. If you would be happier with an X-axis that had 1 value per source instead of all N values divided by N, I am perfectly happy to accept such an edit. Sampenrose (talk) 02:44, 20 March 2021 (UTC)

Update: I said that the chart removal was made "without opening a Talk discussion"; that was incorrect. Someone else in effect opened that discussion. Sampenrose (talk) 02:49, 20 March 2021 (UTC)

Thanks for your replies. As for the consensus, WP:CALC is about consensus to add non-trivial calculations, not the other way around. Anyway, I would be completely ok if the graph had a bar for each source, instead of one bar for the average. The OR problem is the average here, not the graph. I can do the change if you want. --Ita140188 (talk) 06:49, 20 March 2021 (UTC)

The chart is WP:OR because it applies an additional aggregation to data that cannot be aggregated in such way. Each of these LCOE estimates are calculated on different methodology and you just can't go and average them as it's comparing apples an oranges. Presenting it as three separate bars for each publication as Sampenrose would be absolutely acceptable as it would be indeed just graphical presentation of the table - it's the average that is a problem here. Cloud200 (talk) 09:21, 20 March 2021 (UTC)

"Each of these LCOE estimates are calculated on different methodology and you just can't go and average them as it's comparing apples an oranges." The entire point of LCoE is that it makes apples-to-apples comparisons. That's what "levelized" means. That said, we have consensus on a path forward for the graphic, so the disagreement is moot. Sampenrose (talk) 15:33, 20 March 2021 (UTC)

Something like this, I just can't figure out how to add Lazard, IRENA etc to the legend:

Thanks, I corrected the values and added a legend (the order is decided by the graph apparently):

--Ita140188 (talk) 10:12, 20 March 2021 (UTC)

Edit: I fixed the order by putting Lazard first, which has values for all technologies. --Ita140188 (talk) 10:18, 20 March 2021 (UTC)

@Cloud200: regarding your recent edit: while I agree we should discuss the limitations of LCOE, I think it should be done within normal text. I am against putting a note at the top of the section. --Ita140188 (talk) 12:54, 20 March 2021 (UTC)

I also oppose putting the note there and am going to remove it. Sampenrose (talk) 15:33, 20 March 2021 (UTC)

Ita140188 thank you so much for revising the graphic! The work involved can be tedious; I appreciate the effort and good will you invested. Sampenrose (talk) 15:33, 20 March 2021 (UTC)

Ok, I thought nobody opposed the other changes proposed. What do we now then? I believe the current presentation of LCOE as "price of energy" is still misleading. Returning to the comment by Sampenrose above, levelization just at one parameter (financial) but ignores capacity factor and assumes an arbitrary discount rate as discussed in the publications linked above. Cloud200 (talk) 15:14, 23 March 2021 (UTC)

I'm very sympathetic to the fact that you used the Talk page to float your ideas and took silence for consent. If you read back a couple years, that's how I started. I'll try to pay closer attention and engage constructively here; my apologies for lagging. Regarding the substance of your point: 1. criticisms of LCoE exist. 2. LCoE includes capacity factor: it's measure of energy, not power. 3. To my knowledge, the most respected global survey of energy prices are the BNEF, IRENA, and Lazard surveys that use LCoE. If there is a better survey, please cite its data! If there is a methodology with comparable uptake (not one that you like per your arguments on this page, one that is as recognized as LCoE), please cite that! 4. I have no idea why averaging discount rates is illegitimate; it seems to me obviously better than not averaging them. 5. Your above "LCOE ... doesn't claim to describe the actual price of energy from existing or new power plants. It's an financial tool for investment evaluation, pretty much like ROI, it doesn't care about CO2 or anything else but describes a particular parameter from investor's perspective" does not reflect how BNEF/IRENA/Lazard present LCoE or are received by their readership. A more accurate statement would be along the lines of "determining average costs is by construction an exercise in collapsing a diverse set of data points into a single number that does not reflect their full range. LCoE focuses on factors X, Y, and Z, making simplifications X1, Y1, and Z1. It does not include factors A, B, and C." You can check the three LCoE-based studies by evaluating their common assertion that solar and wind are the cheapest sources of energy. If it is true, you would expect other sources to report that solar and wind are market leaders because of low prices. Which, in fact, they do.Sampenrose (talk) 03:44, 24 March 2021 (UTC)

• Sampenrose Some examples of inconsistency between LCOE models and actual energy prices were already given by Uzinagaz. This is precisely what drawn me into this discussion earlier and after doing some research on my own I did see that there is indeed a problem of LCOE being widely misinterpreted.
  • Discount rate is an arbitrary parameter, assumed by the author of the model. It's not a physical parameter, like capacity factor, neither economic, like price of concrete. If you are an investor interested in a particular project and you estimate LCOE for that specific project, you know what the discount rate on your investment is. If you are Lazard, you basically come up with a number that is taken out of a hat.
  • Why this is important? Because, as demonstrated in the OECD NEA report[1], if you assume 3% discount rate, residential PV LCOE is $100-200 but if you assume 10% it suddenly skyrockets to $150-350. For nuclear power they jump from $30-60 range to $50-130 range etc, and the ranges are becoming much wider too. Any model that produces such massively different outputs based on a single assumed parameter is prone to be wrong more often than right.
  • I did check Irena 2019 study, they assume discount rate of 7.5%. Why? No idea. They just take this value but don't explain why.
  • BNEF, Irena and Lazard are private companies, working for investment banks. They are not NGOs, public research institutions or non-profit organisations. A for-profit company that comes up with a proprietary methodology that has a massive impact on projected "price of a technology" should fire a warning light due to possible conflict of interest.
  • And the LCOE models actually wildly differ when compared to actual prices of energy. One ARENH example[2] has been discussed above - that was $58, which is well in the middle of the 3% discount rate range but well below the median for 10% range. Another example is in Sweden[3], article in Swedish but the key messages are:
    • In public debate people actually do use BNEF estimates as actual expected price for energy from that source. In that case, arguing that Swedish estimates for nuclear plant are "too low", because BNEF says they should be much higher.
    • Another example is OL3 power plant in Finland, where the actual investor calculated LCOE is way lower:

Based on the above production targets and the current operating and capital cost expectations, TVO’s average long-term production cost target for OL1, OL2 and OL3 EPR combined is expected to be approximately 30 € / MWh. OL1 and OL2 together produce 14–15 TWh / year at a cost of 20 EUR / MWh, which means that TVO's own calculation (corresponding to LCOE) for OL3 is around 42 EUR / MWh, in line with the simple calculation from public data above. So what does Bloomberg New Energy Finance (BNEF) state for the results of its LCOE calculation for OL3? A range has been reached that ranges from a minimum value of the equivalent of 190 EUR / MWh up to a staggering 375 EUR / MWh. Two things about this are strange, partly that you do not seem to have a clue where you think the figure will actually land, for a project that has been completed for a long time and will go into commercial operation at the beginning of next year, and partly that the cost estimates are up to 900% higher than the owner's easily verifiable public figures from annual reports.

• • • The author makes a very good point about BNEF and other proprietary models:

These so-called actual costs are said to differ from the assumed costs that have been used as input values ​​in the studies. The criticism is quite diffuse as it never questions any input value (for example capital cost, operating cost, operating length, etc.). Instead, the criticism consists of a comparison of the “LCOE value” (electricity production cost per kWh) that one would get if it is calculated with these input values, and a set of “LCOE values” which is thus stated by a specific company (BNEF). (...) In my opinion, it is deeply inappropriate, as academics in the media, to trumpet "what new nuclear power costs" by repeating values ​​from a publicly secret LCOE estimate of a private company, performed with unclear input values ​​and with unclear methods, based on a selection of a handful of projects (out of more than 100 projects in the last 20 years). The figures from BNEF have a certain shock value, as they stand out by being dramatically higher than corresponding estimates from virtually all other similar calculations and estimates, carried out by, for example, Energiforsk, the Swedish Energy Agency, International Energy Agency (IEA), European Commission, OECD and the U.S. Energy Information Administration (EIA). Could it really be that all other organizations are completely wrong and only BNEF is right about this?

The he goes into a in-depth analysis:

BNEF states its own input values, without reference to sources, with values ​​that are often incorrect. Sometimes the input values ​​seem to correspond fairly well with reality, sometimes not at all. In the case of Finland (OL3), for example, a cost of capital has been assumed for the customer that is up to 230% above the actual value. For the cost item “fixed operating costs”, a value has been assumed that is up to 300% higher than the fixed operating costs for Nordic nuclear power today. Illustrative of the quality of the data collection performed for the analysis is that in their calculations they also stated an incorrect size of the reactor, 1400 MW instead of 1600 MW. BNEF has not been able to provide any explanation for any of these discrepancies.

And finally:

The figures from BNEF can therefore not be interpreted as, or referred to, as the “actual cost of new nuclear power” and should absolutely never have been presented in such a way in the Swedish debate.

I don't want to copy-paste the whole article about BNEF here, but it contains much more examples of distortion of actual costs by BNEF. Therefore, presenting on Wikipedia results of proprietary models based on undisclosed parameters by private companies who have vital interests in specific valuation of specific companies and doing so without a word of caution is simply irresponsible. Cloud200 (talk) 09:48, 24 March 2021 (UTC)

Thanks so much for the thoughtful reply. It will take me a day or two to get through your links; I'll try to respond in depth by this weekend. Sampenrose (talk) 15:52, 24 March 2021 (UTC)

Thank you for the interesting discussion and points raised. If I can give my view, I think the LCOE has three main problems:

1. It is heavily reliant on financial assumptions, especially for technologies where capital costs are dominant.
2. For technologies like nuclear power, where costs are heavily influenced by political decisions, quality of the supply chain, and ultimately vary widely by country and even single project, it is also difficult (if not impossible) to interpret a single number of even a range.
3. The LCOE always assumes a marginal penetration for non dispatchable technologies. In an extreme example, you cannot just replace 100% of your gas generation with solar because its LCOE is lower, you would end up with a non functioning energy system.

So obviously these numbers must be taken with a huge grain of salt, and this should be made very clear in this article. --Ita140188 (talk) 03:02, 25 March 2021 (UTC)

After looking in vain through Cloud200's references for data in the cost of energy that is at all comparable to BNEF, IRENA, or Lazard's, I continue to believe that the broadly recognized studies that actually exist are the ones we should use. While there are some good points made by several of you regarding LCoE, there are also incorrect and debatable ones. In the end, I cannot support removing the best data sources we have. Let's improve this page by:

1. Cleaning up the many outdated sections
2. Tracking down other reputable cost surveys.

If we can find new cost surveys of comparable quality that use a non-LCoE methodology, let's add them. If they don't exist, isn't that evidence that LCoE is the state of the art? Sampenrose (talk) 00:40, 28 March 2021 (UTC)

It's not about state of the art or not: I agree that LCOE is most widely used way to compare energy costs in a generic way (without specific context). What I'm saying is that for many technologies, and especially renewables and nuclear, a measure of cost without context has little value to understand how these technologies compare in a real grid. For the case of nuclear, it's because of the uncertainty given the few projects currently existing, and for the case of renewables because they are not dispatchable. In the case of non-dispatchable sources, the actual grid costs depends a lot on the current penetration of the technology. For very high penetrations, grid costs (such as seasonal storage) are completely dominant, so the cost of generation alone becomes almost meaningless. --Ita140188 (talk) 03:08, 28 March 2021 (UTC)

"I agree that LCOE is most widely used way to compare energy costs in a generic way (without specific context). What I'm saying is that for many technologies, and especially renewables and nuclear, a measure of cost without context has little value to understand how these technologies compare in a real grid." I believe you have conceded the point. Sampenrose (talk) 01:47, 29 March 2021 (UTC)

@Sampenrose: Not sure what you are talking about. We are not having a debate competition. My point is that there should be some form of note to clarify that these numbers are not absolute and have limitations, and may even be meaningless in certain contexts (which is the original point of this discussion).--Ita140188 (talk) 02:09, 29 March 2021 (UTC)

Since LCoE is the standard way of measuring the cost, we should not be labeling it as limited or meaningless. Sampenrose (talk) 05:02, 29 March 2021 (UTC)

Not sure if I am not being clear. What I mean is: LCOE is used to give one number (or range) independent of context. However, in many cases, context (eg. regulatory environment, current penetration of non-dispatchable generation, etc.) is extremely significant in determining the actual cost of technologies. So LCOE (or similar universal context-free cost measures) should be taken with a huge grain of salt when comparing costs, especially of non-dispatchable technologies. --Ita140188 (talk) 05:49, 29 March 2021 (UTC)

Sampenrose Sorry, but this is not how this discussion should look like. You have happily dismissed five pages of very specific and sourced criticism of how LCOE is presented here by a simple statement that some arguments "incorrect and debatable" WP:WEASEL without even pointing out a single one. Also, nobody ever proposed "removing" the three LCOE sources and this is something you made up now. This discussion started with a proposal to clearly annotate the existing LCOE data to avoid confusing people who then run around and claim "nuclear will cost $198 because this is what Lazard said". Cloud200 (talk) 17:02, 28 March 2021 (UTC)

Sampenrose Further to the NEA LCOE data linked above, which you simply ignored (I can't believe you classified it as "incorrect or debatable"), there's also 2018 IPCC LCOE estimates, which clearly explains the limitations of the methodology (requires knowledge of capital flows, ignores costs of balancing variable energy sources etc) and presents LCOE in four scenarios, with 5% and 10% cost of capital, carbon tax and capacity factor - page 1331. I can see no other way to make this article reliable and science based than 1) clearly explain limitations of LCOE methodology as suggested from the beginning, 2) include NEA and IPCC LCOE estimates in addition to the three existing private reports. Cc Ita140188 [4] Cloud200 (talk) 18:09, 28 March 2021 (UTC)

OK, some specifics.

1. "Discount rate is an arbitrary parameter, assumed by the author of the model. It's not a physical parameter, like capacity factor, neither economic, like price of concrete. If you are an investor interested in a particular project and you estimate LCOE for that specific project, you know what the discount rate on your investment is. If you are Lazard, you basically come up with a number that is taken out of a hat." Capacity factor is NOT a physical parameter. It's a statistical measure of a physical parameter (watts) over some time period. When the period is in the past, it can be extremely precise. When the period is in the future, it is an estimate, just like discount rate. Discount rate is an estimate of a real phenomenon: that people value present returns more than future returns. Lazard is, according to Wikipedia "the world's largest independent investment bank". You have accused them of gross incompetence, if not actual fiduciary negligence. Such assertions do not belong on Wikipedia. If they have been made by reputable sources, please cite them.
2. "The LCOE always assumes a marginal penetration for non dispatchable technologies. ... you would end up with a non functioning energy system" You are correct that LCoE is not a good measure of what it does not purport to measure. The measures I am aware of that incorporate whole-grid costs such as https://www.edf.org/sites/default/files/documents/SB100%20clean%20firm%20power%20report%20plus%20SI_clean.pdf (from an energy expert, it cites a Lazard levelized cost of storage study approvingly) and several others find that we can add variable renewables to our grid at ever-declining prices for years, but that we will have to supplement them. They are not arguments that LCoE is bogus or that nuclear is cheaper than renewables, because it isn't and it isn't, respectively.
3. I could keep going, but I believe I have made my point.

If you are mad that LCoE finds that the cost of nuclear is high, there is a simple solution that would work for me: add a section on cost of nuclear that cites reputable sources. They should be easy to find. The core issue we'll still disagree on is whether a hypothetical watt of electricity delivered in 2065 should be valued in 2021 the same as a watt of electricity delivered in 2021. That's silly and incorrect, but it's not illegitimate. If you can find a source that asserts it does (and you probably can), it's entirely appropriate to post that to this page. It's just not appropriate to remove or mark with warnings reputable sources which assert the (serious and correct) opposite--not because I say they are serious and correct, but because they are the most reputable sources we have, in the literal sense of "reputable".

"Discount rate is an estimate of a real phenomenon" - this is precisely the point of the criticism of LCOE expressed in NEA, IPCC and other articles linked here. Discount rate is different for each project. Each investor values their money differently. What Lazard does is to take a number of arbitrarily selected discount rates from undisclosed projects, and assume that value as "model discount rate". This lack of transparency, which leads to cost estimates which are absurdly inflated as compared to actual costs is precisely at the base of criticism of Lazard. Cloud200 (talk) 06:59, 29 March 2021 (UTC)

"You have accused them of gross incompetence, if not actual fiduciary negligence" - not me. NEA, IPCC and the guy from Sweden, who pointed out that actual cost of the investment in nuclear power plant in Finland is much lower than Lazard estimate. Cloud200 (talk) 06:59, 29 March 2021 (UTC)

"a hypothetical watt of electricity delivered in 2065 should be valued in 2021" - in this specific example we are talking about existing projects with existing price tags, in Finland and France, not hypothetical ones. Cloud200 (talk) 06:59, 29 March 2021 (UTC)

Additions of old studies, discount rate

My thanks to Cloud200 for tracking down and adding the NEA and IPCC studies from 2018, and for highlighting discount rate (DR). A couple thoughts:

1. If we want to apply DR, then a single table should not show prices calculated from different DRs as if they were the same.
2. If a study offers 3%, 7%, and 10% DRs, then show all three somehow when representing that study.
3. 2018 studies and 2021 studies (BNEF) do not deserve equal placement on sources which have seen significant deflation in the intervening period. The two 2018 studies show much higher prices for wind and solar because they cost much more in 2017 than they did in 2020, when the respective data was gathered. The 2018 studies were presumably accurate at the time, but are not now, and should not be used **for that purpose**. If they are the best sources for other purposes, by all means let's use them for those purposes.

From previous discussions, I believe that Cloud200 is concerned that the more recent studies are overstating the cost of nuclear generation by applying a discount rate which is too high. Let's present the reputable information they have added in a way that does justice to it without doing injustice to the other reputable sources on the page. I have some ideas about how to do so, but perhaps Cloud200 would like to suggest some first. Sampenrose (talk) 03:12, 1 April 2021 (UTC)

What you seem to be getting from these studies, is that cost of PV and wind has dropped 3x in just two years from 2018 to 2020, but at the same time cost of nuclear has increased 3x times. Is that what you are saying? Cloud200 (talk) 10:54, 1 April 2021 (UTC)

I'm saying the opposite, actually: the 3x difference is an artifact of comparing sets of studies with different methodologies, and we should fix that **while still respecting the value of both sets of sources**. Here is BNEF in 2018: https://assets.bbhub.io/professional/sites/24/2018/02/Sustainable-Energy-in-America-2018-Factbook.pdf. On slides 40-41 you can see that it put solar at about $54/MWh and wind at about $60, vs $39 and $41 this year. (If you track down older Lazard and IRENA studies you'll find similar shifts; you could even find them from the history of this page.) You have made quality additions to this page, for which I repeat my thanks. Can you suggest a presentation of those additions in a way that doesn't create the 3x artifact (and addresses the points I raised above)?

It would certainly make sense to indicate the year of data set (as opposed to publication year) but my point is that the differences in prices between NEA, IPPC and the proprietary studies are not caused only by actual change in price over time but also by different methodologies, as demonstrated by the absurd $163 Lazard price for nuclear energy, which started this whole series of changes weeks ago. If we take Lazard price in 2020 at face value, we would need to assume price for nuclear has increased threefold from 2018 as compared to IPCC and NEA - which is of course not true, as it's more likely that Lazard just cherry picked the most delayed and most expensive project for their estimate, while IPCC and NEA clearly took a broader and more representative sample. Cloud200 (talk) 11:37, 2 April 2021 (UTC)

Conversely, do you think that Nuclear looks better if you only include the lowest discount rate in the article? If not, why are you only doing that? Given that discount rate is an external factor, that can vary globally over time, it doesn't seem reasonable to do that. You seem to have been basically cherry picking the data to favour nuclear power. GliderMaven (talk) 12:16, 2 April 2021 (UTC)

"You seem to have been basically cherry picking the data to favour nuclear power." I agree that **since the source shows multiple DRs** then citations of the article should too (point #2 above). But Cloud200 has explained that they think the NEA article is a better source for nuclear, and I agree with the (implicitly included) softer claim that it is a reputable source, so let's figure out the best way to present it. Regarding Cloud200's specific reasoning:

1. "my point is that the differences in prices between NEA, IPPC and the proprietary studies are not caused only by actual change in price over time but also by different methodologies ..." -> Agreed, thank you!
2. "...as demonstrated by the absurd $163 Lazard price for nuclear energy, which started this whole series of changes weeks ago. ..." Your evaluation of "absurd" may or may not be correct, but it is not appropriate here. Lazard is a solid source, you don't get to throw it out because you disagree with it any more than someone else should get to throw out the quality sources you've added.
3. "...If we take Lazard price in 2020 at face value, we would need to assume price for nuclear has increased threefold from 2018 as compared to IPCC and NEA..." Agreed (again) on "as compared to IPCC and NEA" but not "from 2018". Lazard 2018 did not find a 3x lower cost than Lazard 2020.
4. "...which is of course not true..." Agreed, thank you!
5. "...as it's more likely that Lazard just cherry picked the most delayed and most expensive project for their estimate, while IPCC and NEA clearly took a broader and more representative sample." Per "absurd" above, "more likely" and "clearly" are your personal evaluations. And they are perfectly reasonable evaluations, but one editor's evaluations don't get to overrule general Wikipedia editing principles.

Here's where I think we are:

1. Cloud200 has made the case for explicitly showing the DR behind specific cost estimates. This feels to me like a genuine improvement to the page that all editors should support, but please speak up if there is disagreement.
2. Cloud200 has found new reputable sources which complement the existing sources. This also feels like a genuine improvement to the page that all editors should support, but please speak up if there is disagreement.
3. The specific edits which introduced DR and the new sources could use some tweaks for reasons given above, and since Cloud200 did the hard work of adding improvements to the page, I'd like to give them first cut at addressing the issues that GliderMaven and I have raised.

My thanks to all involved for working through these concerns. Sampenrose (talk) 15:19, 2 April 2021 (UTC)

I propose to add all numbers present in the most recent studies by each source, including all numbers at different discount rates. The year for which the study refers to should also be specified. --Ita140188 (talk) 15:58, 2 April 2021 (UTC)

I think that's broadly the right direction, but the details matter. Let's see what Cloud200 proposes. Sampenrose (talk) 18:07, 2 April 2021 (UTC)

Here is a tentative summary of the current editorial discussion. This was tricky to write, and I have probably oversimplified something one of you cares about. Please correct where I have omitted or misstated a position, and lurkers, please weigh in:

1. The BNEF/IRENA/Lazard studies overstate the cost of nuclear (Uzinagaz, Cloud200, Ita140188)

• It is fine to add reliable sources that come to different conclusions, it is not OK to come to remove existing reliable sources because they don't support your conclusion (Lklundin, Sampenrose)

1. LCoE is misleading because it hinges on discount rate, which is hidden in the summary figure (Cloud200, Ita140188)

• The effect of discount rate (DR) should be displayed so readers can understand its effect (Cloud200, Ita140188, Sampenrose)

1. The 2018 studies showing nuclear LCoE as significantly lower when DR is lower than the DR used in more recent studies should be displayed (Cloud200)

• Yes, they should be displayed, but their full DR information should be included (Glidermaven, Sampenrose)
• Yes they should be displayed, but we should not mix publication dates (Sampenrose)

• We should display the dates the data was gathered (Ita140188, Cloud200)

• I think we're very close: it may be difficult to make apples-to-apples comparisons on data gathering dates (depends on what the sources expose), but I'm happy to try. I'm also happy with putting, e.g., the 2018 sources on low-DR cost of nuclear against the 2021 sources with higher DRs **for nuclear**, but not for generation technologies (i.e. variable renewables) where longitudinal series of the same methodology show significant change (i.e. BNEF/IRENA/Lazard). (Sampenrose)

1. Capacity factor should be included in cost calculations (Cloud200). Related: LCoE is misleading because it "always assumes a marginal penetration for non dispatchable technologies" (Ita140188)

• When the unit is energy (MWh, etc), it is included by definition. If we want to add reliable sources which measure based on power (watts), we can certainly do so. (Sampenrose)

1. Move Global Studies (Cloud200, GliderMaven)

• Add it (perhaps condensed) to the Summary (GliderMaven, Sampenrose **depending on details**)

I agree to all the proposed changes and happy to add all the remaining data (other DR scenarios), which I didn't do initially mostly because there were just too many of them and converting tables into wikitext is a nightmare. Note that if we take all IPCC & NEA LCOE scenarios, it would be also fair to include all BNEF, Lazard and IRENA scenarios as they also have been kind of arbitrarily picked by previous editors - for example I have no idea why we have just one "solar (utility)" column when all of these three studies have data for residential solar, large-scale solar farms and concentrated solar power presented separately. Cloud200 (talk) 10:25, 6 April 2021 (UTC)

Wonderful, thank you!

1. Let's maybe discuss *how* we add the DR rates. You can propose something or I can probably get to it this weekend, or anyone else is welcome to suggest an approach

I would just add a column at the end which would contain DR and other relevant parameters (e.g. carbon tax in case of IPCC model 4). It can also contain dataset year, or we can add one more column for year. Cloud200 (talk) 07:04, 7 April 2021 (UTC)

1. "why we have just one "solar (utility)" column when all of these three studies have data for residential solar, large-scale solar farms and concentrated solar power" my motivation has been that 1. CSP is not a significant generating technology 2. rooftop solar is mostly not an alternative to the others for grid-scale generation; its expense derives from its small scale, not its technology. Columns for personal wind farms, diesel generators, etc, would have similarly high $/MWh values unrelated to the cost of utility-scale.

If the technologies were negligible, they wouldn't be even included in the LCOE models - with 500 MW plants like Ouarzazate Solar Power Station CSP can be hardly described as "not significant" and most 100% RE models actually assume a share of rooftop PV (which is proposed as an alternative when low surface power density of PV is mentioned), so skipping them in the article raises a valid question on what basis is Wikipedia allowed to arbitrarily decide what's significant and what's not. Cloud200 (talk) 07:04, 7 April 2021 (UTC)

Reverted rearrangement of major sections

GliderMaven (talk · contribs) moved the Global Studies section, the contents of which are under current discussion, without seeking consensus. I have reverted that edit until we have had a chance to discuss it. My opinion is that many readers who come to "Cost of electricity by source" will want to know values rather than a long discussion of methodology, and that therefore values belong at the top. I welcome other perspectives.

It's completely unreadable and completely inconsistent, so I've reverted you. It was just awful. GliderMaven (talk) 11:07, 3 April 2021 (UTC)

We have a summary section already, that's what the lead is. I suggest you add a summary of data to it. GliderMaven (talk) 11:10, 3 April 2021 (UTC)

Please seek consensus. Sampenrose (talk) 15:00, 3 April 2021 (UTC)

How about you do to keep it like that? The arrangement is utter shit. GliderMaven (talk) 16:30, 10 April 2021 (UTC)

The entire principle of Wikipedia is that things are defined BEFORE you use them. GliderMaven (talk) 16:32, 10 April 2021 (UTC)

Should retail costs be removed from first sentence?

It says "Different methods of electricity generation can incur a variety of different costs, which can be divided into three general categories: 1) wholesale costs, or all costs paid by utilities associated with acquiring and distributing electricity to consumers, 2) retail costs paid by consumers, and 3) external costs, or externalities, imposed on society." but it seems from the hatnote above that retail costs are out of scope of the article Chidgk1 (talk) 10:03, 5 February 2022 (UTC)

Possibly, but then title should be amended to "Wholesale cost of electricity by source". Retail costs and externalities are the only costs borne by the public, and are thus most relevant for general interest readers.Wtmusic (talk) 15:21, 6 February 2022 (UTC)

So are you saying that Electricity pricing is a sub article of this article? That article seems to think the opposite. Chidgk1 (talk) 15:54, 6 February 2022 (UTC)

That article, too, is fraught with bias and inaccuracies. In truth the presentation of this subject is a mess, with contributions from authors with little understanding of the topic. I'm doing the best I can to right egregious wrongs, but it's a complicated subject, and there aren't enough hours in the day.Wtmusic (talk) 16:25, 6 February 2022 (UTC)

LCOE

Hello Ita140188 - you said there was a previous discussion which decided against merging - could you link to the discussion please as I did not see it before I merged Chidgk1 (talk) 09:36, 6 February 2022 (UTC)

Ah presumably https://en.wikipedia.org/wiki/Talk:Cost_of_electricity_by_source/Archive_2#Requested_move_28_November_2019

If I had known the subject was so controversial I would not have merged without a formal discussion. I had expected Electricity pricing to be the controversial subject and this to be merely technical. Chidgk1 (talk) 10:28, 6 February 2022 (UTC)

LCOE is controversial because determining a levelized cost of electricity requires so many assumptions its value is limited. Cost to whom, in what country, in what regional transmission organization (RTO), in what state, in what municipality? When is the cost incurred? I would suggest it's largely a marketing construct invented by special interests to promote their products - similar to labeling a source of electricity as "green", or not.
Wtmusic (talk) 16:12, 6 February 2022 (UTC)

Extraneous "Renewable Energy" section at end

The section tacked onto the end titled "Renewable energy" is out of place and plagued by numerous violations of NPOV:

1. Does not help to present the cost of electricity by source "fairly, proportionately, and without editorial bias".
2. Multiple references are from renewables trade magazines and other non-independent sources (Renewable Energy World, Solar Thermal Energy News, etc.), which lack citations, and thus are largely ignored by the mainstream academic discourse.
3. Unsupported, overreaching, or blatantly incorrect conclusions are often presented as fact by the author. For example: "....putting solar power for the first time on a competitive footing with the retail price of electricity in some sunny countries","...the levelised cost of electricity (LCOE) from PV is competitive with conventional electricity sources", "...electricity is worth more during the day than at night","...solar thermal power with energy storage....can operate round the clock on demand..", etc.
4. Subjective evaluations and prognostications abound. For example: "there has been fierce competition in the supply chain, and further improvements in the levelised cost of energy for solar lie ahead...", etc.

Within are points that are well-supported and informative; they might be integrated into prior discussion or (better) into Renewable energy. Much more is either biased, outdated, and/or superfluous.

Wtmusic (talk) 06:28, 6 February 2022 (UTC)

Retail marginal costs?

The lead mentions retail marginal costs but that is confusing me. We do have retail marginal costs in the country where I live (I pay more per kWh for the kWh over 210 kWh per month) but as far as I know they are they same for all sources of electricity purchased from an electricity retailer. In other words the marginal costs on the green tariff would also increase over the 210 kWh threshold I think. Perhaps a real example could be added in the body of the article to clarify? Chidgk1 (talk) 11:14, 7 February 2022 (UTC)

It's a confusing subject! Your utility would probably argue the retail marginal costs you describe aren't costs at all, but their baseline cost of electricity; that you're being rewarded with price discounts for using less than 210 kWh per month. With either tiered or time-of-use (TOU) pricing, whether you're being penalized or rewarded is largely an argument in semantics. But the bottom line is that electricity is indeed supplied at a cost to you, and its marginal cost increases in step with increased consumption (I tend to favor a consumer-side perspective here, but I think it's justifiable in context). And any cost added to consumers' bills, for each additional kWh they consume, is by definition a retail marginal cost.

The most impartial source for data on electricity consumption and prices in the U.S. is the Energy Information Administration, and many of the factors affecting U.S. electricity prices probably apply elsewhere. But I am sensitive to the fact Wikipedia's audience is international, and think it's better to err on the side of generality than split this topic into separate entries for "Cost of electricity in the U.S.", "Cost of electricity in the U.K.", etc. Wtmusic (talk) 17:46, 7 February 2022 (UTC)

You are certainly right that the lower consumption rate here is a subsidy to householders at the moment. It is set by the government rather than the companies. But I still don't understand how retail marginal costs relate to the subject of this article. Don't they instead belong in electricity pricing? Chidgk1 (talk) 06:18, 8 February 2022 (UTC)

In my opinion: both Electricity pricing and Cost of electricity by source should be merged under an article titled "Economics of electricity". After all, price and cost are two sides of the same coin - one entity's price is another's cost.

More importantly, half of the content in both articles can be deleted. This subject, one of the most contentious in current debate about energy, serves as a platform for promotion by special interests, which exploit the ambiguity of terms like sustainable, sustainability, renewable, and green to market their wares. It's extraneous, and harmful to Wikipedia's reputation for NPOV.

"External impacts of electricity generation" would be a different article, encompassing both environmental and social impacts. A subheading would be "Valuation of external impacts", where assigning them a monetary value could be addressed. Wtmusic (talk) 16:42, 9 February 2022 (UTC)

Graphs of estimates

Wtmusic mentioned monetary comparisons above. Starting a new section to discuss this to keep in one place as previous talk section was discussing several points and getting quite large.

In my opinion there should definitely be a monetary comparison shown here. But the current graph is far too "busy" and hard to understand. I am hoping the IPCC AR6 WG3 report due in March will include one. If it does I am pretty sure they will use US dollars. I don't know whether they will use LCOE or another method.

If they produce a comparison I suggest we delete all the comparisons before the AR6 cutoff date (will need to check that against BNEF date) and then figure out how to make an easier to read graph or graphs. Chidgk1 (talk) 08:00, 9 February 2022 (UTC)

Imprecision in discussion of energy and environmental impacts

Re-deleting "Sustainable energy avoids or greatly reduces future costs to society, such as respiratory illnesses":

1. Sustainable and sustainability are imprecise terms undefined in physics, geophysics, or climate science, are avoided in academic discourse, and are chiefly found in marketing and/or promotional materials. The Wikipedia entry for Sustainable energy, which states "Most definitions of sustainable energy include...", should be a red flag. Good science strives to define all terms precisely, and with few exceptions, uses other precisely-defined terms in definitions.
2. Good science also asks questions, and attacks broad, imprecise characterizations mercilessly. This statement raises more questions than it answers. Besides "What does sustainable mean?", it asks "It avoids or greatly reduces all future costs - financial, those of intermittency, electrical system unreliability, as well as health?"
3. Limiting references to coal pollution, though they are no doubt accurate, asks the question, "Is sustainable synonymous with non-coal?". Wtmusic (talk) 16:57, 7 February 2022 (UTC)

Helo Wtmusic- I am surprised you removed

Sustainable energy avoids or greatly reduces future costs to society, such as respiratory illnesses.  

from the lead as I did not think that was a controversial statement. It seems more of an obvious statement to me but I added it for people such as high school students who may not yet understand. It is implicit in the definition which you can see in the featured article sustainable energy. As external costs are mentioned right at the beginning as one of the 3 types of cost it makes sense to have another sentence about them in the lead I think.

Re your specific points 1) As "sustainablity" is good enough for one of the United Nation's goals it is good enough for Wikipedia. 2) Questions raised by the statement in the lead can be discussed in more detail in the body of the article. 3) I'll be happy to add refs to electricity sources other than coal if required.

Chidgk1 (talk) 06:05, 8 February 2022 (UTC)

Hi Chidgk1 - as much as I agree with many of your edits, I have to object to using either the word sustainable or sustainability in any NPOV treatment of this topic. They are semantic marshmallows - soft, fluffy, feelgood terms without a gram of scientific legitimacy.

Adding it for the benefit of high school students, "who may not yet understand", would backfire. Why? Because its meaning is undefined, i.e. no one understands precisely what it means, it would be more confusing than helpful. The same for U.N. ambassadors - I would wager every one who signs off on these aspirational position papers has a different interpretation of sustainable. IMO, setting of ill-defined goals for the past 30 years - since the Kyoto Protocol (1992) - is responsible for the mess we're in now.

Coincidentally, this subject is at the fore of current news. The Council of the European Union is in an uproar over whether to consider natural gas and nuclear projects as sustainable to qualify for loans from the World Bank. The problem has less to do with whether they are or aren't sustainable, than that the question itself is meaningless. Wtmusic (talk) 07:23, 8 February 2022 (UTC)

Re: "removed 'or cents/kilowatthour (retail)' as retail is typically in local currency" - good point. I doubt whether wholesale prices are delineated in U.S. dollars in other countries, too, but I don't know. Should all monetary cost comparisons be deleted? Another option would be converting all to euros (€). It's arguably the "least local" global currency. Wtmusic (talk) 06:04, 9 February 2022 (UTC)

Non-specific references. Adding to the confusion and inaccuracies in this article are non-specific references, typically ones which cite a lengthy source but lack page numbers. Without implication here, I will note that this is often not a simple oversight but an effort to advance an author's subjective interpretation of a topic by encumbering readers with an added burden in verifying accuracy and context. Wtmusic (talk) 16:19, 13 February 2022 (UTC)

References

Merger proposal

The following discussion is closed. Please do not modify it. Subsequent comments should be made in a new section. A summary of the conclusions reached follows.

The result of this discussion was no consensus. Chidgk1 (talk) 17:29, 18 February 2022 (UTC)

---

@Ita140188, Rodw, Sadads, PJ Geest, Cloud200, Leotohill, Pengo, Wtmusic, GliderMaven, Agentbla, Sampenrose, Renizen, WMSR, LukeSurl, Owl of Arcadia, DecarbonizationEngineer, Engineman, and Dicklyon: As there have been real world developments since a 2019 discussion I propose merging Levelized cost of energy into Cost of electricity by source for the following reasons:

With wind and solar power now a significant share of generation there is more need for electricity storage and flexible generation. Therefore I understand that measures other than LCOE (such as VALCOE) are often preferred nowadays. Thus the LCOE article is unlikely to need expansion.

There is some duplication - for example both articles discuss the limitations of LCOE.

I doubt length would become a problem but if it did a merged article could be trimmed a little - for example there is too much detail on the United States

Chidgk1 (talk) 10:55, 6 February 2022 (UTC)

Agree, although LCOE, VALCOE, and other cost calculations are often "preferred" not because they provide any useful information to the public, but serve as marketing tools. I encourage other editors to limit contributions or edits to verifiable fact, and to provide abundant and impartial references - that alone would significantly trim presentation of this subject. Wtmusic (talk) 17:08, 6 February 2022 (UTC)

• Strong oppose All the points I raised in the previous discussion are still valid. LCOE as a metric has extensive coverage and comfortably fits the requirement for a stand-alone article. The article is already 20 kb, and is nowhere near to being exhaustive. All these points remain true even if LCOE becomes obsolete. Personally, I never thought LCOE was a very useful measure, so I agree with Chidgk1 that going forward it will be less used. This is however irrelevant to the decision to merge it with an other article, since it is still an extremely influential and used metric. Wikipedia is full of articles on things that are not used anymore. --Ita140188 (talk) 19:47, 6 February 2022 (UTC)

I'm confused...you write "I never thought LCOE was a very useful measure", then "LCOE...is still an extremely influential and used metric." Used by whom, for what? Wtmusic (talk) 21:34, 6 February 2022 (UTC)

Not sure where is the confusion. The first is my personal opinion, the other is a fact. LCOE is the most used metric for energy investment decisions by far. Google returns over a million results for "LCOE" and half a million for "Levelized cost of energy". --Ita140188 (talk) 07:53, 7 February 2022 (UTC)

No, both are your personal opinion. The number of Google results for a metric is an awful indicator of both its influence and usefulness.

When I Google "good energy", I get 2.27 billion search results. Do we assume that a metric of energy "goodness" is 4,540 times more influential and useful than LCOE? Wtmusic (talk) 07:23, 8 February 2022 (UTC)

• Support weakly, because: pros - on one hand I see lots of duplication between these articles and reasons given for the merge are sensible (need to show LCOE/LCOS in context), cons - purely editorial, we may end up with a massive article that covers everything and is simply unreadable and deduplication may be also achieved by moving all explainers on LCOE etc to their respective articles Cloud200 (talk) 13:59, 18 February 2022 (UTC)
• Oppose It's useful to have a separete article with various definitions of LCOE. That would be too much detail in the article on Cost of electricity by source. Femke (talk) 17:00, 18 February 2022 (UTC)

The discussion above is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

Doubling transmission capacity does not necessarily double transmission line bird kills

Virtual transmission is described at https://www.energy-storage.news/baltic-region-gets-first-energy-storage-as-virtual-transmission-line-pilot-project-from-fluence/ Chidgk1 (talk) 18:24, 21 February 2022 (UTC)

Virtual transmission does not increase transmission capacity. That's the whole point of it. You are just replacing transmission capacity expansion with storage capacity expansion. --Ita140188 (talk) 14:25, 22 February 2022 (UTC)

Yes I agree it can certainly be described like that. Replacing the transmission capacity with storage capacity would mean that less kilometers of new lines are needed. The report says there are many different options for transmission, so obviously the US might decide to use new overhead lines in some places, underground lines in others, more batteries in others, or indeed reuse existing transmission routes by siting new generation where coal plants used to be. My point is that to multiply birds killed yearly by 2 is not just simple arithmetic but undue synthesis of the 2 cites. Chidgk1 (talk) 15:21, 22 February 2022 (UTC)

"Replacing the transmission capacity with storage capacity would mean that less kilometers of new lines are needed." How? Storing electricity and transmitting it are two distinct concepts (storing it doesn't improve transmission capacity any more than transmitting it improves storage capacity).

"...or indeed reuse existing transmission routes by siting new generation where coal plants used to be." Source claims a doubling of existing transmission, and has presumably included those routes.

The only ways to increase transmission capacity are with more wires, or thicker wires, or more efficient cabling. Thicker wires are impractical due to their weight. More efficient cables can improve (and are improving) transmission capacity, they're also considerably more expensive than standard non-insulated aluminum cables. Undergrounding is limited to short runs in urban areas for the same reason.

Increasing penetration of renewables would involve connecting wind and solar farms in remote locations, then transmitting it vast distances across the country - making a doubling of bird kills an excessively conservative estimate. Wtmusic (talk) 17:12, 23 February 2022 (UTC)

Shouldn't the titular concept be explained more precisely ?

The introductive summary seems to proceed from the tacit hypothesis that electricity is something with a "cost" that can be averaged by "unit". As such, this article implies that electricity can be conceptualized as if it were yet another commodity. Nevertheless, the electricity market is one-of-kind as it is the only one to be absolutely just-in-time : at each and every instant, the production must exactly match the consumption. It is also the only one to entirely driven by demand.

On the other hand, the economies of (post-) industrial nation is entirely powered by electricity. There does not exist any alternative to electricity, which makes this concept of cost a bit more tricky to comprehend.

Finally, but consequently, modes of electricity generation are far from being substituable. One mode of generation can only be understood within an integrated grid of continental porportions where, for example, the notoriously intermittent renewables operate in conjunction with dispatchable sources, most often combustion-based. How the associated costs can be intelligently separated as if they were not related is the elephant-size {{refnec}} here.

Noliscient (talk) 20:20, 16 March 2022 (UTC)

Yes I agree time and place should be mentioned. You could write your suggested lead below for other people to comment on. Or simply add another paragraph. Chidgk1 (talk) 06:10, 17 March 2022 (UTC)