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Engineering
Electrical Engineering
Can Electricity Generators Survive with LCOE Higher than Wholesale Prices?
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[QUOTE="LT Judd, post: 6441298, member: 677655"] [B]TL;DR Summary:[/B] There seems to be a disconnected between wholesale electricity prices and the Levelized cost of electricity. I can't see how electricity generators can make money. I am from Australia so multiply figures by around 0.7 to convert to USD. Electricity prices and power generation have become a bit of an ideological battle ground in my country so prices are in the news . Whole sale electricity prices seem to be running around 50-80 $/MWhr this year . Taking the mid range- that works out to about 6.5c/kwhr. Household Retail price are about three times that, so that sounds fair to allow for transmission, distribution and profit. We have a wholesale competitive market where generators bid in in 10 minute blocks - I believe the US has something similar. The whole sale price is what the generator gets paid . However when I look at published data for LCOE for new entrants, it seems to be around 90-110 $/MWhr for new coal and gas turbine generation. LCOE is supposed to just be the 'break even" cost so I don't understand how it can be more than the whole sale price . How does anyone make any money??. That's probably why is has become a political football. All I can think of is that most of our power comes from ageing coal fired plants whose capital costs have been written off long ago. Is it the same dynamic in the US ?, anyone have any ideas how this can be? [/QUOTE]
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Can Electricity Generators Survive with LCOE Higher than Wholesale Prices?
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