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The Levelized Cost of Electricity from Existing Generation Resources

June 3, 2019
By Thomas F. Stacy, George S. Taylor

Continuing to operate existing coal, natural gas, hydroelectric, and nuclear plants provides a cheaper source of electricity than replacing them with new plants or renewable sources of power like wind or solar.

From the Executive Summary:

[O]n average, continuing to operate existing natural gas, coal, nuclear and hydroelectric resources is far less costly than building and operating new plants to replace them.

Non-dispatchable wind and solar generation resources impose [up to $24 Mwh in costs] on the dispatchable generation resources which are required to remain in service but are forced to generate less in combination with them. ... Wind and solar resources increase the [levelized cost of electricity] of dispatchable resources they cannot replace by reducing their utilization rates without reducing their fixed costs, resulting in a levelized fixed cost increase.