Part 2 of 2 Parts (Please read Part 1 first)
      Assuming a carbon price of thirty dollars per ton of CO2 and pending a breakthrough in carbon capture and storage, the cost of coal-fired power generation is falling out of the competitive range, according to the report. The cost of gas-fired power generation has been decreasing due to low gas prices and this “confirms the latter’s role in the transition.”
     The NEA and IEA says that when comparing the cost of generating electricity today, rapidly changing power systems must also be considered. As in previous editions of this report, the current edition uses the “LCOE” which is considered to be “a well-established, uniquely transparent and intuitive metric, widely used in policy making, modelling and public discussion”.
      As the share of wind and solar PV in the energy market continues to increase, the value of the electricity which is generated by a specific technology in a particular power system will also change. The report also presents a new complementary metric, the “value adjusted” LCOE to account for these additional impacts. Costs associated with storage, fuel cells and LTO of nuclear power plants is also a part of the analysis for the first time.
     Also, for the first time, the report was released along with an online Levelized Cost of Electricity Calculator. This online calculator allows interested parties to easily download all data tables in the report. It also enables the user to examine the impact of changing specific variables such as the discount rate, fuel prices or the cost of carbon.
     One of five “boundary chapters” included in the report presents an up-to-date view of the potential role of nuclear energy in decarbonized electrical generation systems. Authored by the NEA, the report said that nuclear power can support cost-effective decarbonized in several complimentary ways.
      LTO remains one of the most cost competitive options to generate low-carbon electricity in many regions with an LCOE ranging between thirty and fifty dollars per megawatt-hour. Due to the experience acquired with recent first-of-a-king projects, new nuclear can enter a phase of rapid learning in western OECD countries with near-term overnight costs reductions of twenty to thirty percent compared to todays levels. Small modular reactors (SMR) propose cost and risk reduction with construction in factories and higher affordability of the projects. Countries that are interested in pursuing the nuclear power option will benefit from the mobilization of these three complimentary solutions.
      Fatih Briol is the Executive Director of the IEA. He said, “The electricity sector is essential for the functioning of modern societies, as the COVID-19 crisis has highlighted yet again, and also has a crucial role to play in reducing global emissions. Investing in affordable low-carbon electricity generation technologies supports economic growth but is also necessary if we are to put global emissions into structural decline.” The report said, that, in order to decarbonize energy sectors, “knowing the costs and system value of different electricity generation options and, in particular, of low-carbon generation, is indispensable.”
      Bilbao y León said, “While electricity systems have largely been able to accommodate the rising share of variable renewable generation to date, further increasing their share will bring significant challenges with regards to reliability, stability, resilience and cost. Nuclear generation will continue to have a vital role in ensuring system stability in a cost effective, low-carbon generation mix.”