Abstract

SKLAR-CHIK, M.D.; BRENT, A.C.  and  DE KOCK, I.H. Critical review of the levelised cost of energy metric. S. Afr. J. Ind. Eng. [online]. 2016, vol.27, n.4, pp.124-133. ISSN 2224-7890.  http://dx.doi.org/10.7166/27-4-1496.

The purpose of this paper is to critically review the 'levelised cost of energy' metric used in electricity project development. This metric is widely used, because it is a simple metric to calculate the cost per unit of electricity for a given technology connected to the electricity network. However, it neglects certain key terms such as inflation, integration costs, and system costs. The implications of incorporating these additional costs would provide a more comprehensive metric for evaluating electricity generation projects, and for the system as a whole. It is therefore recommended to refine the metric for the South African context.

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