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Joint IEA-NEA report details plunge in costs of renewable electricity; nuclear competitive with other baseload power sources

2010 and 2015 LCOE ranges for solar and wind technologies. Source: IEA/NEA. Click to enlarge.

The cost of producing electricity from renewable sources such as wind and solar has been falling for several years. A new report, a joint project by the International Energy Agency and the Nuclear Energy Agency, provides in detail the contrasting costs for different power generation technologies around the world and shows that renewable sources can produce electricity at close to or even below the cost of new fossil fuel-based power stations, depending upon conditions such as resources and appropriate market and regulatory frameworks.

The report, Projected Costs of Generating Electricity: 2015 Edition, also shows that new nuclear power plants generate electricity more cheaply than other established “baseload” sources—mainly coal- and gas-fired power plants—over the full lifetime of facilities when financing costs are relatively low.

Top: LCOE ranges for baseload technologies at three different discount rates.

Bottom: LCOE ranges for solar PV and wind technologies at three discount rates. Source: IEA/NEA. Click to enlarge.

The report calculates the cost of producing electricity from different types of new power plants. Compared with the previous edition published five years ago, Projected Costs of Generating Electricity: 2015 Edition details a significant drop in the price of solar and wind generation costs, especially for solar photovoltaic (PV) installations, as a result of sustained technological progress.

That drop, as well as a plateauing in the price of new nuclear energy plants, helped arrest cost inflation in electricity generation over the past five years.

No single technology proves the cheapest form of electricity generation under all circumstances: many factors determine the final cost of any investment, principally local influences such as market structure, policy environment and resource endowments.

Projected Costs of Generating Electricity: 2015 Edition looks at generation costs at more than 180 plants—from large nuclear and fossil-fuel facilities to wind farms to residential-sized solar PV installations—in 22 countries, including Brazil, China and South Africa.

This total includes 17 natural gas-fired generators (13 combined-cycle gas turbines [CCGTs] and 4 open-cycle gas turbines [OCGTs]); 14 coal plants; 11 nuclear power plants; 38 solar photovoltaic (PV) plants (12 residential scale, 14 commercial scale, and 12 large, ground- mounted) and 4 solar thermal (CSP) plants; 21 onshore wind plants; 12 offshore wind plants; 28 hydro plants; 6 geothermal; 11 biomass and biogas plants; and 19 combined heat and power (CHP) plants of varying types.

This data set contains a marked shift in favor of renewables compared to the prior reports, indicating an increased interest in low-carbon technologies on the part of the participating governments. The data suggest that any cost inflation in baseload technologies has been arrested.This is particularly notable in the case of nuclear technologies, which have costs that are roughly on a par with those reported in the prior study, thus undermining the growing narrative that nuclear costs continue to increase globally, according to the IEA.

The data were used to project, country by country and for the different technologies, what it would cost to generate electricity over the lifetime of a plant built to enter service in 2020. The report’s standardized form of analysis, levelized cost of electricity (LCOE), displays the cost range of generation in each country for each technology.

The LCOE calculations are based on a levelized average lifetime cost approach, using the discounted cash flow (DCF) method. The calculations use a combination of generic, country-specific and technology-specific assumptions for the various technical and economic parameters, as agreed by the Expert Group on Projected Costs of Generating Electricity (EGC Expert Group). For the first time, the analysis was performed using three discount rates (3%, 7% and 10%).

While the costs of renewable technologies in some higher priced markets can be well above that of coal- or gas-fired plants, the report details how utility-scale solar PV and especially onshore wind power are comparable and often lower in countries featuring plentiful resources and appropriate market and regulatory frameworks.

Further, while more significant regional variations remain than for baseload technologies, variable renewable technology costs continue to converge towards international benchmarks at the lower end of their cost range.

Projected Costs of Generating Electricity: 2015 Edition also examines the potential cost of emerging technologies such as ocean energy and fuel cells. The report also discusses the value and cost of generation from the perspective of the power system as a whole, examining other relevant cost metrics that may be more appropriate for a world where the concept of baseload power is of declining relevance.

Some of the specific finds about baseload power generation were:

  • Overnight costs for natural gas-fired CCGTs in OECD countries range from US$845/kWe (Korea) to US$1,289/kWe (New Zealand). In LCOE terms, costs at a 3% discount rate range from a low of US$61/ MWh in the United States to US$133/MWh in Japan. The United States has the lowest cost CCGT in LCOE terms, despite having a relatively high capital cost, which demonstrates the significant impact that variations in fuel price can have on the final cost. At a 7% discount rate, LCOEs range from US$66/MWh (United States) to US$138/MWh (Japan), and at a 10% discount rate they range from US$71/MWh (United States) to US$143/MWh (Japan).

  • Overnight costs for coal plants in OECD countries range from a low of US$1 218/kWe in Korea to a high of US$3 067/kWe in Portugal. In OECD countries, LCOEs at a 3% discount rate range from a low of US$66/MWh in Germany to a high of US$95/MWh in Japan. At a 7% discount rate, LCOEs range from US$76/MWh (Germany) to US$107/MWh (Japan), and at a 10% discount rate they range from US$83/MWh (Germany) to US$119/MWh (Japan).

  • The range of overnight costs for nuclear technologies in OECD countries is large, from a low of US$1,087/kWe in Korea to a high of US$6 215/kWe in Hungary. LCOEs at a 3% discount rate range from US$29/MWh in Korea to US$64/MWh in the United Kingdom, US$40/MWh (Korea) to US$101/MWh (United Kingdom) at a 7% discount rate and US$51/MWh (Korea) to US$136/MWh (United Kingdom) at 10%.

For solar and wind, the findings were:

  • Solar PV technologies are divided into three categories: residential, commercial, and large, ground- mounted. Overnight costs for residential PV range from US$1,867/kWe in Portugal to US$3,366/ kWe in France. LCOEs at a 3% discount rate range from US$96/MWh in Portugal to US$218/MWh in Japan. At a 7% discount rate, LCOEs range from US$132/MWh in Portugal to US$293/MWh in France. At a 10% discount rate, they range from US$162/MWh to US$374/MWh, in Portugal for both cases.

    For commercial PV, overnight costs range from US$1,029/kWe in Austria to US$1,977/kWe in Denmark. LCOEs range from US$69/MWh in Austria to US$142/MWh in Belgium at a 3% discount rate, US$98/MWh (Austria) to US$190/MWh (Belgium) at a 7% discount rate and US$121/MWh (Portugal) to US$230/MWh (Belgium) at a 10% discount rate.

    Overnight costs for large, ground-mounted PV range from US$1,200/kWe in Germany to US$2,563/kWe in Japan. LCOEs at a 3% discount rate range from US$54/MWh in the United States to US$181/MWh in Japan, US$80/MWh (United States) to US$239/MWh (Japan) at a 7% discount rate and US$103/MWh (United States) to US$290/MWh (Japan) at a 10% discount rate.

  • Onshore wind plant overnight costs range from US$1 571/kWe in the United States to US$2,999/ kWe in Japan. At a 3% discount rate, LCOEs range from US$33/MWh in the United States to US$135/ MWh in Japan, US$43/MWh (United States) to US$182/MWh (Japan) at a 7% discount rate and US$52/MWh (United States) to US$223/MWh at a 10% rate (Japan).

  • Overnight costs for offshore wind plants range from US$3,703/kWe in the United Kingdom to US$5,933/kWe in Germany. LCOEs at a 3% discount rate range from US$98/MWh in Denmark to US$214/MWh in Korea; at a 7% discount rate, they range from US$136/MWh (Denmark) to US$275/ MWh (Korea); and at a 10% discount rate, they range from US$167/MWh (United States) to US$327/ MWh (Korea).

The review of three non-OECD countries—Brazil (hydro only), the People’s Republic of China and South Africa—found:

  • Baseload. The estimated overnight cost for a CCGT in China (the only non-OECD data point in the sample) is US$627/kWe, while the LCOE is US$90/MWh, US$93/MWh and US$95/MWh at 3%, 7%, and 10% discount rates respectively. For coal, cost estimates are included for China, with an overnight cost of US$813/kWe, and South Africa, with an overnight cost of US$2,222/kWe. The LCOEs for China are US$74/MWh at a 3% discount rate, US$78/kW at a 7% discount rate and US$82/MWh at a 10% discount rate. For South Africa, the range is larger: US$65/MWh at 3%, US$82/MWh at 7% and US$100/MWh at 10%. The report includes two nuclear data points for China, with overnight costs of US$1 807/MWh and US$2,615/kWe; LCOES are US$26/MWh and US$31/MWh at a 3% discount rate, US$37/MWh and US$48/MWh at 7% and US$49/MWh and US$64/MWh at 10%.

  • Renewables. For solar PV, China has the lowest cost commercial PV plant in the database, with an overnight cost of US$728/kWe; LCOEs are US$59/MWh, US$78/MWh and US$96/MWh at 3%, 7% and 10% discount rates respectively. The overnight cost for the large, ground-mounted PV plant is US$937/kWe; the LCOEs are US$55/MWh, US$73/MWh and US$88/MWh at 3%, 7% and 10% discount rates. Finally, for onshore wind, overnight costs for the two estimates from China are US$1,200/kWe and US$1,400/kWe. While in South Africa, the single onshore wind plant in the database is US$2 756/kWe; LCOEs are US$77/MWh, US$102/MWh and US$123/MWh at 3%, 7% and 10% respectively.

The report also analyzes issues in projecting costs of electricity generation:

  • How to price in the impact of renewable variability—i.e., changes in generation when the sun does not shine or the wind does not blow;

  • The effects of liberalization of prices on LCOE and investment return; and

  • Various technologies’ sensitivities to a carbon price.



NPPs require the largest relative initial investment and are the most sensitive to discount rates. Even at a low 3% it is still too costly. Something between 0% and 1% could help NPPs to become more competitive? Other large direct and/or indirect subsidies are often required to offset high initial cost and higher discount rates. Energy produced has to be sold at $0.16+/kWh to cover cost and fair profit margin.

Onshore wind power plants require the least relative initial investment and are the least sensitive to discount rates and will be more so with the new improved 8 MW to 10 MW direct drive units mounted on 500 feet towers. Indirect and direct subsidies are no longer required. It is a mature technology. It may be the main winner soon, specially in places with high quality winds. New wind farms can be installed in about 18 months. Energy produced can be sold at about half the price of nuclear produced energy.

Offshore wind power plants will be a worthwhile solution in places where onshore wind quality is too low and/or meet high resistance from local dwellers.

Solar sits between the above two sources but requires more costly storage units for 24/7 operations. It is restricted to year round sunny places

Pumped or natural hydro with large water reservoirs are the lowest cost storage solution for most REs.

Nuclear did seem to work out well for Fukushima and Chernobyl.


I'd love to see the full report.

This precis is almost impossible to follow, as it simply hits the highest and lowest countries for overnight and LCOE, and the country with the lowest or highest overnight cost may not appear in the LCOE at either the 3% or 7% discount rate


While I have not read the full report (yet), based on this synopsis it appears there are two key take-aways...
1. dramatic changes from the last report, 5 years ago, for renewables
2. such a report can be misleading unless basis for projected LCOE is clearly described and includes likely technological developments.

For example, recent firm pricing for utility scale renewable energy was on the order of 4 to 5 cents per KWh (e.g. Austin, TX), lower than #s in this report. Even if we back out US subsidies, that still suggests a LCOE less than 7 cents per KWh, with reasonable discount rates. This is also consistent with recent project in Middle East with fixed pricing for solar at less than $0.06 / KWh.

And, these projects do not include the benefits of improved technologies.

This report may provide reasonable 2020 guidance for fossil & nuclear LCOE. It appears that may not be true for solar & wind. For solar & wind it may have been more reasonable to extrapolate the 2020 LCOE using the delta between the prior and current report data.


Please tell me that thorium is safe and cheap and plentiful for 1000 years. With that thorium use the excess electricity to make synthetic gasoline with water electrolysis and co2 capture and put this go#$@m gasoline for sale near where I live without ethanol in it.


Uranium is safe and plentiful for a million years (in fast-spectrum reactors).  Thorium is about 3-4x as abundant as uranium.


The same could be said about coal, oil, bio fuels and NG but living things could die off before we completly runout of those three (3) fossil fuel sources and bio-fuel sources. Burning any more of them may have to be restricted and/or banned if we want to survive. The NA West Coast and Mid-Western States are already getting a feel for it.

NPPs could eventually become (again) a good (clean) base load energy source whenever we can reduce the TOTAL cost by 50% to 75% and get much better public acceptance.


Probably at least 10 years from achieving next gen reactors with those characteristics. I would bet on molten salt reactors from China or Terrestrial Energy. But an interesting "dark horse" is Moltex with a very novel design concept.


On shore wind is a good deal. Consider Harvey D comment. The new class of cement towers, larger blades, and direct drive generators. Also, nuclear a good investment. Both should be brought to forefront of power production given the lowest cost. Nuclear a base load plant, wind, a opportunity power with little cost of operation. Hydro pumping the lowest cost energy storage system, must be utilized to level load grid. The energy storage technology an offshoot of hydro power. I visited a hydro plant in Silverton, CO or another close by historic mining town wherein they utilized a very small pipeline to generate power. It was a pipeline several miles long capturing a mountain pool. The power turbines changed out to new technology,several times, but the power still utilized. I can imagine this could be the beginning of a very good energy storage system.


The new head of EDF has just stated that the cost of building the 1.6 GW EPR reactor will be 10.5 billion euros with entry in service now 2018 at the earliest. Original cost: 3 billion euros, commissioning supposed to be 2012. The London Array offshore wind farm (1 GW) was 1 billion euros to start, increased to 2 billion. So the EPR is 3.3 times as expensive as offshore wind, never mind onshore wind.

The DLR study for the Desertec project showed that a negligible chunk of the Algerian Sahara Desert alone could power all of Europe with solar thermal - something like a quarter of Algeria could power the entire world. Solar Thermal is NOT intermittent - heat is stored in molten salt for night-time generation. Archimedes destroyed the Roman fleet at Syracuse with parabolic mirrors - massive energy available for free.

The human race must be stark raving mad, off its rocker, collectively hallucinating, criminally negligent and insane not to be using solar thermal power to solve all of its electrical power needs. Safe, fuel free, reliable, robust, long plant service life, low maintenance, simple technology to drive steam or supercritical CO2 or ORAC turbines.

An NPP is a kettle to boil water. That's all. So instead of using a parabolic mirror - let's use radioactive decay. As I said - humanity is mad and worse the "engineers" who should know better are all criminally negligent only interested in their miserable jobs rather than doing what is technically and professionally correct.

Oh nimble technicians, yes you should hang your heads in shame. (WH AUden paraphrase).


Good points Emphyrio.

What is the best choice between (Solar + Storage + Transport) and (Wind + Storage + Transport) for large e-energy consumers like NYC, LA, London, Paris, Beijing, Tokyo, Toronto and 100+ other large cities?

As you know, easy access to very sunny places and high quality winds varies a lot from one large city (and/or country) to another. What is the best choice in one place may not necessarily be so somewhere else.

A proper mix of Hydro, Solar w/storage and Wind with storage may be the best CLEAN long term solution for USA, Europe, China, Russia, India and many other countries. NPPs could be added if TOTAL initial cost could be reduced by 50% to 75% and public acceptance be increased to an acceptable level.

The London Array offshore wind farm (1 GW) was 1 billion euros to start, increased to 2 billion.

So €2/W(nameplate), capacity factor ??, capacity value roughly 0.  (Actually, you overstate matters; the London Array is only 630 MW.)

The new head of EDF has just stated that the cost of building the 1.6 GW EPR reactor will be 10.5 billion euros with entry in service now 2018 at the earliest.

In other words, about €6.5/W(nameplate), capacity factor 90+%, capacity value on the order of 100%.  Using my little spreadsheet trick of using the PMT function, I find that amortizing the plant over 20 years at 7% annual interest costs....
... about €0.078/kWh.  That's for the absolute first-of-a-kind unit in the entire world (subsequent builds would normally be cheaper, if regulators allow experience to be applied).  O&M will add something to that, but MOST of the cost of a nuclear plant is financing.  In contrast, the feed-in tariff for offshore wind in Britain is £140/MWh, or about €0.19/kWh... wholesale.

When you actually look at the total cost, wind makes "expensive" nuclear look like a bargain.  And it is.


Recent NPPs turnkey projects run around $0.16/kWh (USD) without proper insurance and/or proper waste fuel disposal(normally assumed by local government/tax payers). Real nuclear energy TOTAL cost is close to $0.20/kWh and rising fast. Lack of public acceptance (Japan disaster did not help) and very long construction delays (everywhere) are pushing TOTAL cost upward year after year. Nobody has yet found ways to lower the effective TOTAL cost of NPPs.

Total cost of recent Wind energy produced with very large direct drive turbines (7 to 10 mega-watts) installed or very tall towers (up to 500 feet) in good quality wind areas with pumped and/or natural hydro storage has fallen below $0.10/kWh and falling fast.

The TOTAL cost of Solar energy with various storage is going much the same way as Wind energy and will be very competitive in areas with plenty of sunshine year-round.

A mix of all three of the above clean energy sources together with Hydro could produce all the electrical energy required, replace all current CPPs and NGPPs, reduce GHG emissions and air pollution.

Recent NPPs turnkey projects run around $0.16/kWh (USD) without proper insurance and/or proper waste fuel disposal(normally assumed by local government/tax payers).

Given that both Vogtle and Summer are coming in at a fraction of that, I can only call you deluded.


Sorry, but this is the average REAL cost for recent CPPs in England, France and Finland, excluding proper insurances and proper-total spent fuels waste disposal cost.

Ontario (18) Candu's total refurbishing cost will run between $0.13/nameplate kWh to $015/nameplate kWh and could go as high as $0.20 when done because cost is going fast every month.

Low (TOTAL) cost NPPs are not on the horizon. That may be why new Solar and Wind are doing much better than new nuclear for the last many years.


You cite no reference for your CANDU claim, and there are plans announced to refurbish 10 out of the 18 CANDUs so obviously someone thinks it's worthwhile.  If you don't it's up to you to explain yourself.

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