The Levelized Cost of Energy Indicator

In this chapter we present the fundamentals of the Levelized Cost of Energy (LCOEn) focusing on renewable power plants and multi-vector energy systems. After having introduced the basic formulation for the LCOEn, we extend its definition to polygeneration systems, hybrid systems (generators working in parallel with energy storage devices as a single unit) and microgrids/nanogrids. Although we focus on the LCOE (Levelized Cost of Electricity) we also analyze other variants of LCOEn (i.e., Levelized Cost of Stored Energy: LCOS, Levelized Cost of Heat: LCOH, and Levelized Cost of Cooling: LCOC). Furthermore, we present a novel approach to analyze multi-vector energy systems and we propose the Levelized Cost of Exergy (LCOEx) as a new useful indicator in the field.