As windfarms spread, so have the discussions concerning their economics. Some argue from a basic definition of Levelised Cost of Energy (LCOE), that wind energy is more cost effective than other energy sources. The opponents argue that the LCOE must be estimated taking a systemic view including opportunity costs, which changes the picture. The opportunity costs are assessed in this paper using a novel approach based on a simulation model to estimate the number of windfarms that will achieve a certain nameplate output. Then, this is combined with the LCOE of dispatchable energy sources to estimate the opportunity cost. A Monte Carlo simulation is run to estimate the effects of uncertainty and variations. The results are clear–windfarms are not cost effective when a certain output must be guaranteed as major opportunity costs are introduced. However, as a supplementary source of energy in specific situations, windfarms can be useful.
CITATION STYLE
Emblemsvåg, J. (2020). On the levelised cost of energy of windfarms. International Journal of Sustainable Energy, 39(7), 700–718. https://doi.org/10.1080/14786451.2020.1753742
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