President

Table 7-1. —Estimated Average Levelized Costs(2006 $/megawatthour) for Plants Entering Service in 2015Plant TypeCapacityFactor (%)LevelizedCapitalCostFixedOperations& Maintenance(O&M) CostVariableOperations& MaintenanceCost (includingfuel)TransmissionInvestmentTotalSystemLevelizedCostFossil Fuel Based Electricity Generation ..............Coal-fired .............................................................Conventional Coal .............................................. 85 $31.4 $3.6 $22.3 $3.6 $60.9Advanced Coal ................................................... 85 36.9 5.1 18.4 3.5 63.9Advanced Coal with CCS ................................... 85 52.0 6.0 22.3 3.5 83.8Natural Gas-fired ...................................................Conventional Combined Cycle ........................... 87 14.1 1.6 48.7 3.7 68.1Advanced Combined Cycle................................. 87 13.8 1.5 45.8 3.7 64.8Conventional Combustion Turbine ..................... 30 25.7 4.5 72.5 10.8 113.4Advanced Combustion Turbine .......................... 30 24.0 3.9 61.9 10.8 100.6Alternative Energy Based Electricity Generation ..Advanced Nuclear ................................................. 90 50.7 8.4 8.2 2.5 69.7Geothermal............................................................ 90 47.9 20.1 0.0 4.9 72.9Biomass ................................................................. 83 48.3 8.6 18.9 4.0 79.8Wind ...................................................................... 35 64.6 9.6 0.0 8.2 82.5Solar Thermal ........................................................ 31.2 122.8 20.7 0.0 10.5 154.0Solar PV ................................................................. 21.7 268.8 6.1 0.0 13.0 287.9Conventional Hydropower..................................... ................ ................ ................ ................ ................ ................Source: Department of Energy (Energy Information Administration).be designed to provide base load power (a constant supply of power), peakload power (when demand is the highest), or to serve as “merchant” plants,selling electricity in the commercial market when it is profitable to do so.The second column in Table 7-1 gives the average capacity factor, which isthe ratio of the actual energy produced in a given period to the hypotheticalmaximum energy output of the plant. While natural gas combustion turbineshave a lower capacity factor and a higher LCOE than other fossil fuel basedplants, they are attractive as peak load or intermediate load (between baseload and peak load) plants. Additionally, fuel prices vary regionally due totransportation costs and resources.Other factors may also be important in determining what type of plantis built. For example, many states have renewable portfolio standards thatrequire minimum additions to capacity from renewable electricity technologiesand there may be tax incentives for alternative energy power generation.The values in Table 7-1 do not reflect these factors. Power producersmay also consider environmental factors that could affect technologyinvestment decisions. These considerations may depend on a regulatoryenvironment that differs substantially in different regions of the country.Investors may be concerned that future policies could increase the cost ofcoal or make it more difficult to dispatch coal-fired power. Finally, LCOEChapter 7 | 171