Why comparing the cost of solar, wind and nuclear power is so hard
Comparing the price of power from a nuclear plant, a wind farm and a solar park is harder than it sounds. Sun and wind cost nothing to fuel but cannot run on demand, and build costs swing wildly: per kilowatt, India's Bhadla solar park cost a small fraction of a German one.
Analysts split electricity costs into three groups: wholesale costs borne by utilities, retail costs paid by consumers, and external costs pushed onto society. Wholesale costs cover the plant itself, operations and maintenance, transmission and eventual decommissioning, usually quoted in dollars per megawatt hour. Capital costs are low for gas and oil stations, moderate for onshore wind and solar panels, and steepest for options such as offshore wind and nuclear, while fuel is expensive for fossil and biomass plants, cheap for nuclear and free for many renewables.
The standard yardstick is the levelized cost of electricity, or LCOE, which spreads lifetime costs over output to compare sources whether or not they can be switched on at will. By that measure utility-scale solar and onshore wind generally undercut coal and gas, though location matters a great deal. Because it ignores timing, the US Energy Information Administration suggested in 2014 judging wind and solar against the costs they spare the grid, and the International Energy Agency devised a value-adjusted version that rewards power delivered at peak demand.
Timing shows up in the capture rate, the average price a source actually earns relative to the market average. A dammed hydro plant that runs only when prices are high might reach 200%, while a wind farm without batteries usually falls below 100%. The more wind a region builds, the lower that figure sinks, since turbines all flood the market at once.
Real projects make tidy estimates look shaky. The Olkiluoto 3 reactor cost its builders €8.5 billion, about €5,310 per kilowatt. The gas-fired Irsching block 5 in Germany came to roughly €531 per kilowatt, yet its owners wanted to close it soon after it opened in 2010, because running it only at peak times made little money. The Lieberose solar park, meanwhile, delivers just over 11% of its rated capacity across a year.
Source: Cost of electricity by source
