LCOE and System Cost Comparison (2025)

LCOE by Technology (USD/MWh, 2025)

Technology	LCOE	Min	Max	CapEx	O&M	Fuel
Natural Gas (CCGT)	100	75	130	Low-Mod	Low	High
Coal	90	60	140	Low-Mod	Low	High
Onshore Wind	60	40	80	High	Low	None
Solar PV	50	35	65	High	Low	None
Offshore Wind	110	85	140	Very High	Low	None
Nuclear	120	80	160	Very High	Low	Low

System Cost: LCOE vs. Delivered Cost (USD/MWh)

Scenario	LCOE	+Storage	+Grid/Backup	Total Delivered
Solar PV	40	+40	+25	105
Onshore Wind	60	+30	+20	110
Gas (CCGT)	90	0	0	90

Dispatchability, Density, Land Use (Relative Score)

Technology	Dispatchability	Energy Density	Land Use (inverse)
Fossil/Nuclear	10	10	10
Renewables	3	2	1

CO₂ Intensity (kg/MWh, Lifecycle)

Technology	CO₂ Intensity
Coal	900
Gas	450
Wind	15
Solar	35
Nuclear	10

Data: EIA AEO 2025, Lazard LCOE 2024, IEA, NREL CREST, Fraunhofer ISE (2024-2025)[1][6][8].
All values are global averages or U.S. reference values for new projects.

Levelized Cost of Energy (LCOE): Definition, Comparison, and Misuse

LCOE is the per-unit cost (typically per MWh) of building and operating a generation asset over its assumed financial life and duty cycle. It is a comprehensive metric that includes:

Capital expenditure (CapEx): Upfront costs to build the plant
Operating and maintenance (O&M) costs: Ongoing expenses to run and maintain the facility
Fuel costs: Relevant for fossil fuel and nuclear plants, negligible for wind and solar
Decommissioning costs: Costs to safely retire and dismantle the plant at end of life
Financing assumptions: Discount rates and interest, which can significantly affect long-lived assets

Global Averages (2024-2025):

Technology	LCOE (USD/MWh)	Notes
Natural Gas (CCGT)	$75-130	Lower in US/Middle East; higher in Asia (due to LNG and infrastructure costs)
Coal	$60-140	Lower in coal-rich nations (China, India); higher in countries phasing out due to taxes
Onshore Wind	$40-80	Highly site-dependent; best sites in strong wing corridors (e.g., US Midwest)
Solar PV (utility-scale)	$35-65	Lowest in sunny regions with cheap labor/land (UAE, India)
Offshore Wind	$85-140	Higher CapEx, marine installation, and grid connection costs
Nuclear	$80-160	High upfront cost, but excellent reliability and zero emissions over decades

Why LCOE is Misleading When Used Alone

LCOE assumes that all electricity is equally valuable, regardless of when or where it is delivered.

This is not true in real-world power systems:

Intermittency: Wind and solar are variable. Their output may not align with demand peaks, reducing their effective value without storage or backup.
Grid integration costs: LCOE does not include the cost of transmission upgrades, balancing, curtailment, or maintaining backup capacity. These costs can be substantial, especially as renewable penetration increases.
Dispatchability: Fossil fuels and nuclear provide firm, dispatchable power that can be ramped to meet demand. LCOE does not reflect the system value of such capacity.
System-level costs: At high renewable shares, storage, grid upgrades, and balancing can add 50-100% or more to the headline LCOE for wind and solar, according to recent research.