{"id":420474,"date":"2026-01-08T12:06:36","date_gmt":"2026-01-08T11:06:36","guid":{"rendered":"https:\/\/climatescience.press\/?p=420474"},"modified":"2026-01-08T12:06:39","modified_gmt":"2026-01-08T11:06:39","slug":"should-lcoe-finally-be-retired-from-energy-policy","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=420474","title":{"rendered":"\u201cShould LCOE finally be retired from energy policy?\u201d"},"content":{"rendered":"\n
\"A<\/figure>\n\n\n\n

<\/p>\n\n\n\n

The Levelized Cost of Energy (LCOE) calculates the average net present cost of electricity generation over a plant’s lifetime, divided by the total energy produced (in $\/MWh). It provides a straightforward way to compare the direct costs of different technologies, such as capital, operations, maintenance, and fuel. <\/strong><\/p>\n\n\n\n

Historically, it has been valuable for tracking technology cost declines- e.g., solar PV and onshore wind now often have the lowest LCOE globally compared to new fossil fuel plants.<\/strong><\/p>\n\n\n

\n
\"A<\/figure>\n<\/div>\n\n\n

_____________________________________________________________________________________________<\/p>\n\n\n\n

<\/p>\n\n\n\n

From The Master Resource<\/a><\/p>\n\n\n\n

By Robert Bradley Jr.<\/em><\/p>\n\n\n

\n
\"A<\/figure>\n<\/div>\n\n\n

<\/p>\n\n\n\n

\n

\u201cThe LCOE narrative has just collided with reality. If \u2018cheap\u2019 solar and wind really were enough, the energy transition would largely run on autopilot. Emissions would fall. Subsidies wouldn\u2019t be needed. Electricity would get cheaper. None of that is happening.\u201d \u2013 Jonas Kristiansen N\u00f8land<\/a>, Norwegian University of Science and Technology (below)<\/p>\n<\/blockquote>\n\n\n\n

Noncompetitive energies need studies; competitive energies need markets<\/em>. This insight deserves to become an adage in today\u2019s contentious debates over relative costs for electric generation. This is particularly true for levelized cost of energy (LCOE) studies purporting to show that wind and solar generation is competitive with thermal generation from oil, gas, and coal.<\/p>\n\n\n\n

The most recent attempt is by the International Renewable Energy Agency (IRENA), titled \u201c91 Percent of New Renewable Projects Now Cheaper Than Fossil Fuel Alternatives<\/a>\u201d (July 2025). And the fix was in with a study purporting to justify \u201caccelerat[ing] the deployment of renewables-based energy transitions worldwide.\u201d[1]<\/strong><\/p>\n\n\n\n

Jonas Kristiansen N\u00f8land<\/a>, Norwegian University of Science and Technology, took issue with their study, posting<\/a>:<\/p>\n\n\n\n

\n

The LCOE narrative has just collided with reality. If \u201ccheap\u201d solar and wind really were enough, the energy transition would largely run on autopilot. Emissions would fall. Subsidies wouldn\u2019t be needed. Electricity would get cheaper. None of that is happening.

Fossil energy use is still increasing, not decreasing. Electricity prices in low-LCOE-dominated electricity systems are rising, not falling.

Why? Because LCOE was never designed for weather-dependent electricity systems. Historically, LCOE was used by the International Energy Agency (IEA)<\/a> to plan electricity systems based on firm, dispatchable generation fueled by non-weather-dependent resources.

Today, the same metric is used to justify electricity systems dominated by variable energy sources that require backup, reserves, ancillary services, and flexibility assets \u2014 costs LCOE simply ignores. The result? Low-LCOE power \u2260 low-cost electricity.

This is exactly why a new UNECE report [United Nations Economic Commission for Europe] now calls for abandoning LCOE as a planning tool and replacing it with full system cost of electricity (FSCOE). System costs matter. Reliability matters. Physics still matters.

I\u2019ve linked the UNECE report<\/a> in the comments.

Curious to hear: Should LCOE finally be retired from energy policy?<\/p>\n<\/blockquote>\n\n\n\n

Yes, it is time for LCOE to be demoted for energy policy-making. Pronto! And many of the 150+ comments agreed.<\/p>\n\n\n\n

\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014<\/p>\n\n\n\n

[1]<\/strong> The About section reads:<\/p>\n\n\n\n

\n

IRENA is a lead global intergovernmental agency for energy transformation that serves as the principal platform for international cooperation, supports countries in their energy transitions, and provides state of the art data and analyses on technology, innovation, policy, finance and investment. IRENA drives the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy in the pursuit of sustainable development, energy access, and energy security, for economic and social resilience and prosperity and a climate-proof future.<\/p>\n\n\n\n

IRENA\u2019s membership comprises 170 countries and the EU. Together, they decide on the Agency\u2019s strategic direction and programmatic activities, in line with the global energy discourse and priorities to accelerate the deployment of renewables-based energy transitions worldwide.\u201d<\/p>\n<\/blockquote>\n\n\n\n

\"A<\/figure>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The Levelized Cost of Energy (LCOE) calculates the average net present cost of electricity generation over a plant’s lifetime, divided by the total energy produced (in $\/MWh). It provides a straightforward way to compare the direct costs of different technologies, such as capital, operations, maintenance, and fuel. Historically, it has been valuable for tracking technology cost declines- e.g., solar PV and onshore wind now often have the lowest LCOE globally compared to new fossil fuel plants.<\/p>\n","protected":false},"author":121246920,"featured_media":420484,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":true,"token":"eyJpbWciOiJodHRwczpcL1wvY2xpbWF0ZS1zY2llbmNlLnByZXNzXC93cC1jb250ZW50XC91cGxvYWRzXC8yMDI2XC8wMVwvMDBTY3JlZW5zaG90LTIwMjYtMDEtMDgtMTIwNDMyLTEwMjR4NjM0LnBuZyIsInR4dCI6Ilx1MjAxY1Nob3VsZCBMQ09FIGZpbmFsbHkgYmUgcmV0aXJlZCBmcm9tIGVuZXJneSBwb2xpY3k_XHUyMDFkIiwidGVtcGxhdGUiOiJoaWdod2F5IiwiZm9udCI6IiIsImJsb2dfaWQiOjE1NTgxMjQ0OX0.C-laoa8zbEluCh0weP3RSuQh0D-gJB9fWX27TCwx7i8MQ"},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691840579,691820835,691832539,691818728],"class_list":{"0":"post-420474","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-cost-of-electricity-generation","9":"tag-international-energy-agency-iea","10":"tag-levelized-cost-of-energy-lcoe","11":"tag-wind-and-solar","13":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/00Screenshot-2026-01-08-120432.png?fit=1435%2C888&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1LnQ","jetpack-related-posts":[{"id":392437,"url":"https:\/\/climatescience.press\/?p=392437","url_meta":{"origin":420474,"position":0},"title":"The Ongoing Fiction of Cheap Wind and Solar","author":"uwe.roland.gross","date":"02\/08\/2025","format":false,"excerpt":"Those claiming that wind and solar energy are cheaper than fossil fuels should be writing scripts for science fiction dramas.","rel":"","context":"In \"fossil fuels\"","block_context":{"text":"fossil fuels","link":"https:\/\/climatescience.press\/?tag=fossil-fuels"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":260510,"url":"https:\/\/climatescience.press\/?p=260510","url_meta":{"origin":420474,"position":1},"title":"The Actual Levelized Cost Of Energy","author":"uwe.roland.gross","date":"03\/06\/2023","format":false,"excerpt":"The LCOE estimates the total capital, operations, and maintenance costs for new electric power plants coming into service. 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There never was.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/03\/0Wind-solar-land.jpg?fit=848%2C565&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/03\/0Wind-solar-land.jpg?fit=848%2C565&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/03\/0Wind-solar-land.jpg?fit=848%2C565&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/03\/0Wind-solar-land.jpg?fit=848%2C565&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":290960,"url":"https:\/\/climatescience.press\/?p=290960","url_meta":{"origin":420474,"position":3},"title":"Lazard\u2019s LCOE","author":"uwe.roland.gross","date":"12\/12\/2023","format":false,"excerpt":"Lazard\u2019s levelized cost of energy (LCOE) is cited on the internet all the time as the source for \u201csolar and wind are cheaper than fossil fuels.\u201d They don\u2019t really mean \u201cenergy,\u201d they mean \u201celectricity.\u201d","rel":"","context":"In \"fossil fuels\"","block_context":{"text":"fossil fuels","link":"https:\/\/climatescience.press\/?tag=fossil-fuels"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":213103,"url":"https:\/\/climatescience.press\/?p=213103","url_meta":{"origin":420474,"position":4},"title":"Reliable wind and solar are not cheap","author":"uwe.roland.gross","date":"11\/08\/2022","format":false,"excerpt":"Likewise, there are two types of wind generator, depending on where they are. 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