LCOE is a way to measure the total lifetime cost to produce energy by a power plant, denominated in MWh. It could be solar, wind, nuclear, or what have you. The calculation stands for levelized cost of energy and the idea is to calculate the present value of all costs against the present value of all future energy production. The goal is to find out how much it cost to produce a MWh of energy in today's dollars.
$45.00 USD
After purchase, the template will be immediately available to download. It is also included in the industry-specific, industrials, renewable energy, sensitivity analysis bundles and the Super Smart Bundle.
- LCOE Calculation: PV of all Costs / PV of estimated MWh production
This financial model is built in Excel and it is fully editable. You can model scenarios for up to 25 years. The entire set of calculations, charts, and outputs are all found on a single tab, which makes it easy to port to any existing model you may already have.
Template Features:
- Simple input section for all major assumptions.
- 8 visualizations (including a tornado sensitivity chart).
- Sensitized 7 different variables.
- Easy color-coding so you know what cells are inputs vs formulas.
- Dynamic calculations.
Main Inputs:
- Nameplate capacity (in MWh)
- Net Capacity Factor
- Degradation
- Life of Project (up to 25 years)
- Initial CAPEX
- Fixed Operating and Maintenance Costs per kW per year
- Variable Operating and Maintenance Costs per MWh
- Major component overhaul and year of overhaul
- Discount Rate
- Decommissioning Costs
- Inflation Rate
Main Outputs:
- Present Value of Energy Produced
- Present Value of Costs
- Final Cost per MWh and per kWh (primary output)
- Final Cost Breakdown
One feature I want to talk more about is the tornado chart. This type of chart works really well in a financial model that has many single input variables. I've shown a high/low scenario analysis all in a single chart. You will be able to see what happens to the final cost per MWh (primary output) when key variable are +/- a defined percentage. This gives you the order of importance for each variable. In the template, I've made this order automatically sort itself if any variables change. As the user, you don't have to do anything to the chart or the order of data yourself.
In general, the model uses a discount rate applied to the energy and costs, as well as a degradation rate to represent the fact that the same components will produce less energy over time. There is an inflation rate that applies to future costs as well.
More About this Calculation and Why It's Used
The Levelized Cost of Energy (LCOE) is a metric that calculates the average total cost to build, operate, and decommission a power plant over its lifetime, divided by the total energy it produces, giving the cost per unit of electricity.
It's a key tool for comparing different energy technologies (like solar, wind, or gas) on a standardized basis, helping investors and policymakers assess project viability by considering capital costs, fuel, operations, maintenance, and financing over the plant's entire lifespan, though it has limitations and doesn't capture system-wide costs like storage or grid upgrades.
Similar Templates:
