The cost of electricity

Surfing around for content on renewable energies, I found an extremely interesting research on the cost of producing electricity made by the Royal Academy of Engineering.

The research is dated 2004 and very well written. Although the price of fuels have changed a bit since then, it is still quite valid and an interesting source on the economics of electricity production. Please click here to access the full research, or simply look at the charts below if you are in a hurry.

The chart below show the cost of producing electricity with different approaches and fuels, including the cost of generation standby.

If you add the cost related to Carbon Dioxide emission, the picture changes slightly (as per below).  Adding CD tax is like a level setting exercise for the different technologies, and creates an incentive in investing in clean energy -which, in turn, helps preserving our environment-.

Below also 3 charts of costs breakdown for 3 different production technologies: coal, offshore wind farms, and tidal energy. Interesting as it surfaces the strengths and weaknesses of different technologies:

• coal, the cheaper but also more polluting, has high fuel costs
• offshore wind farms has no fuel costs (renewable energy), but high CAPEX and standby generation
• tidal has no standby generation costs, no fuel costs (it is renewable energy!) but even higher CAPEX

tidal would be clearly better, if only we were able to lower CAPEX to make it competitive.

No Responses to “The cost of electricity”