Does levelized cost of generation include capital expenditures
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The fixed costs of power generation are essentially capital costs and land. The capital cost of building central station generators vary from region to region, largely as a function of labor costs and "regulatory costs," which include things like obtaining siting permits, environmental approvals, and so on. It is important to realize that building central station generation takes an enormous amount of time.
Operating costs for power plants include fuel, labor and maintenance costs. Unlike capital costs which are "fixed" (don't vary with the level of output), a plant's total operating cost depends on how much electricity the plant produces. The operating cost required to produce each MWh of electric energy is referred to as the "marginal cost." Fuel costs dominate the total cost of operation for fossil-fired power plants. For renewables, fuel is generally free (perhaps with the exception of biomass power plants in some scenarios); and the fuel costs for nuclear power plants are actually very low. For these types of power plants, labor and maintenance costs dominate total operating costs.
In general, central station generators face a tradeoff between capital and operating costs. Those types of plants that have higher capital costs tend to have lower operating costs. Further, generators which run on fossil fuels tend to have operating costs that are extremely sensitive to changes in the underlying fuel price.
Operating costs for power plants include fuel, labor and maintenance costs. Unlike capital costs which are "fixed" (don't vary with the level of output), a plant's total operating cost depends on how much electricity the plant produces. The operating cost required to produce each MWh of electric energy is referred to as the "marginal cost." Fuel costs dominate the total cost of operation for fossil-fired power plants. For renewables, fuel is generally free (perhaps with the exception of biomass power plants in some scenarios); and the fuel costs for nuclear power plants are actually very low. For these types of power plants, labor and maintenance costs dominate total operating costs.
In general, central station generators face a tradeoff between capital and operating costs. Those types of plants that have higher capital costs tend to have lower operating costs. Further, generators which run on fossil fuels tend to have operating costs that are extremely sensitive to changes in the underlying fuel price.
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