On Green Energy: A Critical Look at LCOE

 

LCOE (Levelized Cost of Electricity) is the average calculated cost of electricity generation over the entire lifecycle of a power plant. It’s a key metric often cited to promote solar and wind energy projects. However, it’s worth looking beyond these abstract numbers.

If a salesperson for solar panels or wind turbines argues for the cost-effectiveness of renewable energy solely using LCOE, show them this graph:

The expenses for electricity transmission and distribution increase exponentially with the integration of renewable energy sources.

A look at the capital investments in the U.S. energy sector over the past 20 years reveals an interesting trend. Since 2008, investments in generation equipment—whether in thermal power plants (TPPs), nuclear power plants (NPPs), solar power plants (SPPs), or wind farms—have remained relatively stable, largely unaffected by the “green energy” trend.

Meanwhile, spending on electricity transmission and distribution has surged by 2.5–3 times. Even more significant costs emerge in low-voltage networks when implementing renewable energy systems. Installing rooftop solar panels, for instance, requires smart meters, robust transformers, upgrades to local distribution networks, and battery installations.

These costs are never accounted for in LCOE calculations but ultimately fall on the consumer, creating a hidden financial burden.

In essence, green energy calculations are often cleverly designed, but the reality—until a true technological breakthrough or “singularity” occurs—is that renewable energy remains more expensive. For now, nuclear power stands as the only truly sustainable and “green” energy source.