Viewpoint Review of OECD study into ‘ ‘ Projected costs of generating electricity — 2010

This joint report by the International Energy Agency (IEA) and the OECD Nuclear Energy Agency (NEA) is the seventh in the long established series of studies into electricity generating costs. It presents the main results of the work carried out in 2009 for calculating the costs of generating baseload electricity. The study is quite comprehensive in covering almost all financial aspects facing investors in the electricity generating system. Therefore this study although useful, its usefulness lies in explaining methodologies, mentioning factors that affect investment and cost, educating planners and improving investment evaluation and planning methodologies, its resulting figures and cost comparisons are however controversial. Generation planning and investments are case and country specific, and should be studied correspondingly and as close as possible to the timing of decision making to take account of trends. Most likely such case specific results will differ from figures calculated in the study. Therefore we need to emphasize a key conclusion of the study which is ‘‘that country-specific circumstances determine the LCOE’’; it is this that needs to be considered and not the results represented in the study. & 2010 Elsevier Ltd. All rights reserved. This joint report by the International Energy Agency (IEA) and the OECD Nuclear Energy Agency (NEA) is the seventh in the long established series of studies into electricity generating costs. It is referred to later as the ‘‘study’’. Projected Costs of Generating Electricity—2010 Edition (OECD, 2010) presents the main results of the work carried out in 2009 for calculating the costs of generating baseload electricity from nuclear and fossil fuel thermal power stations as well as the costs of generating electricity from a wide range of renewable technologies. All of the included technologies are expected to be commissioned by 2015. The work was conducted under the supervision of the Ad hoc Expert Group on Electricity Generating Costs which was composed of representatives of the participating OECD member countries, experts from the industry and academia as well as from the European Commission and the International Atomic Energy Agency (IAEA). This review is in two parts. Part I directly quotes the main assumptions and conclusions of the study as outlined in its Executive Summary. Part II is a critical evaluation of some of the assumptions and methodologies adopted in this study as well as its conclusions.