Fossil-fuel Power Station - Alternatives To Fossil Fuel Power Plants - Relative Cost By Generation Source

Relative Cost By Generation Source

See also Relative cost of electricity generated by different sources

When comparing power plant costs, it is customary to start by calculating the cost of power at the generator terminals by considering several main factors. External costs such as connections costs, the effect of each plant on the distribution grid are considered separately as an additional cost to the calculated power cost at the terminals.

Initial factors considered are:

  • Capital costs (including waste disposal and decommissioning costs for nuclear energy)
  • Operating and maintenance costs
  • Fuel costs (for fossil fuel and biomass sources, and which may be negative for wastes)
  • Likely annual hours per year run or load factor (may be 30% for wind energy, but 90% for nuclear energy)
  • Offset sales of heat (for example in combined heat and power district heating (CHP/DH)).

These costs occur over the 30–50 year life of the fossil fuel power plants, using discounted cash flows. In general large fossil plants are attractive due to their low initial capital costs—typically around £750–£1000 per kilowatt electrical compared to perhaps £1500 per kilowatt for onshore wind.

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