World Energy Outlook 2006

The Economics of New Power Plants
Over the Outlook period, the main technologies available for large-scale
baseload generation are expected to be CCGTs, coal steam, coal IGCC and
nuclear and wind power. 6 The electricity generating costs of these technologies
are shown in Figure 6.7, based on the technology expected to prevail over the
next ten years and on gas prices of around $6 to $7 per MBtu. CCGTs are no
longer expected to be the most competitive option for baseload electricity
generation in most cases, reversing a trend seen in OECD markets since the
early 1990s, based on earlier expectations of low gas prices of around $3 per
MBtu. The generating costs of CCGTs are now expected to be between 5 cents
and 7 cents per kWh, while the generating costs of coal-fired plants are
expected to range between 4 cents and 6 cents per kWh.
US cents per kWh
Figure 6.7: Electricity Generating Cost Ranges of Baseload Technologies
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Nuclear CCGT Coal steam IGCC Wind
Note: The ranges of capital and fuel costs largely reflect regional differences. Capital costs range as follows:
$2 000 to $2 500 per kW for nuclear; $550 to $650 per kW for CCGT; $1 200 to $1 400 per kW for coal
steam; $1 400 to $1 600 per kW for IGCC and $900 to $1 100 per kW for onshore wind. Fuel cost ranges are
$0.4 to $0.6 per MBtu for nuclear; $5 to $7 per MBtu for gas and $40 to $70 per tonne for coal. Wind average
capacity factor ranges from 25% to 32%.
Coal-fired generation is now competitive in the US market and several
coal-fired power plants are under construction or in the planning process. New
gas-fired generation is constrained in the United States by high gas prices and
6. Wind power cannot be compared directly with traditional baseload technologies because of its
variable nature. It is, however, useful to include it in the comparison of generating costs as it is
becoming increasingly significant in several countries’ electricity mix.
Chapter 6 - Power Sector Outlook 145
© OECD/IEA, 2007
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