The levelized cost of energy (LCOE) serves as a valuable measure for assessing the economic viability of a specific project or energy source. Put simply, a lower LCOE suggests that a project is more efficient in generating electricity. This metric is primarily influenced by three main factors: initial capital investment, ongoing operational expenses and the total electricity output throughout the asset’s lifespan.
As depicted in Figure 1, most regions exhibit after-tax LCOEs ranging from $30 to $40 per megawatt-hour (MWh), with the exception of NYISO. In NYISO, LCOEs are comparatively less competitive due to higher expenses and reduced capacity factors, stemming from a lower-quality solar resource.
Highlights from Energy Transition Research
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Tracking the ET Market | Improving Multiples in a Lower Cost of Capital Environment – The 4Q23 edition of the Energy Transition Research team’s equity tracking report provides coverage across various energy transition sectors as well as integrated traditional energy businesses.
Fusion Insights | Data Center Load Growth: Marrying Load to the Interconnection Queue– This Prism Signal leverages Enverus Intelligence Research’s proprietary large-load project tracking dataset to identify the regions exposed to the most load growth due to data center expansion.
Data Center Demand | Load Impact Imminent– This publication offers a Lower 48-level view on expected growth in data center capacity and associated power demand.
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