Cost Of Renewable Energy vs Fossil Fuels & Nuclear

In the guide below, we look at what the true cost of different forms of renewable energy might be, and compare them to fossil fuel and nuclear energy costs.

We do this across several different indicators and measurements of cost.

This guide may complement our separate comparison guide where we compare other features and aspects of the different energy sources


Summary – The Cost Of Renewable Energy vs Fossil Fuels & Nuclear

Different Ways To Express Or Assess ‘Cost’

Capital or ‘setup’ cost

Operating cost (fuel, maintenance, repairs, etc.)

Lifecycle costs (of all stages)

Cost to deliver one unit of electricity to the consumer

Wholesale price that the consumer pays for electricity (this can depend on the energy mix in a particular State or city, but in South Australia for example, wind and solar have contributed to more competitive electricity prices)


It Can Be Difficult To Determine True Energy Costs & The True Price Of Electricity

There are ultimately different factors/variables that impact the cost of different energy sources in different geographic locations (cities, countries, etc) at any one time.

For this reason, cost and price calculations might be considered as estimates, and not definitive.


Cost To Produce & Supply Electricity vs Price Of Electricity

The cost to produce/supply electricity can be differentiated from electricity prices 

Costs are essentially supplier/producer side, and prices are consumer side  


– Costs

Costs are the cost paid by the supplier/producer to supply (and deliver) a unit of electricity 

Costs generally include what it costs to build, and also operate an energy project


– Prices

The price is what is paid for that unit of electricity by the end user


What Are Costs Composed Of?

Costs may mainly include capital costs, and also operational/running costs

These costs can be expressed separately 

But, they may also be expressed together in the one measurement as lifetime costs that are inclusive of the different stages and cost factors of energy supply


Using LCOE To Express Costs

LCOE stands for ‘levelized cost of electricity’

It is one way to express the cost of different energy sources over their lifetime, and compare them in a uniform way to one another 

We provide more information on what LCOE is, how it’s calculated, provide different LCOE data of the different energy sources, and discuss potential limitations and shortcomings of LCOE in the guide below 


Other Ways To Measure The Cost Of Different Energy Sources

We outline the other ways that the cost of different energy sources can be measured in the guide below, giving the cost of solar energy vs wind energy as an example


Indirect & External Costs

What is perhaps not mentioned as frequently as direct costs are the indirect and external costs of different energy sources


– Indirect Costs

Infrastructure costs (grid upgrade and redesign, storage batteries, and so on) are one example of an indirect cost

Other indirect cost examples might include taxes, subsidies and higher electricity prices

These indirect costs can add up

What the consumer ends up paying for the price of supplying electricity as a service might include not only direct costs, but also these indirect costs (which are passed onto them from the supplier/producer) 


– External Costs

Beyond the direct and indirect costs for producers and consumers, there might be external costs to consider

These costs might be the cost incurred by society to eventually address problems such as environmental issues (like air pollution, emissions, and so on) caused by a particular energy sources 

These costs might be paid by taxpayers and governments, just as one example


Trends With Renewable Energy Costs, & Fossil Fuel Costs

Some reports show that renewable energy sources like solar and wind are consistently getting cheaper in some regions with more investment, demand, and so on

Other reports indicates that some fossil fuel energy sources, like new coal technology (such as CO2 capture and air pollution reduction devices) and new coal plants, are more expensive than conventional fossil fuel technology and plants, and may be more costly than some renewable energy sources

We may also have to consider how carbon taxes and ‘polluter pays’ penalties for higher emitting or dirtier energy sources impact their cost

With this being said, renewables and other newer or ‘cleaner’ forms of energy may have their own costs and issues to consider too

For example, variability, having to have backup power sources, having to use energy storage technology like batteries, subsidies, and other potential drawbacks can all impact cost and other performance factors


Are Cleaner Energy Sources Like Renewables A Cost, Or An Investment?

Renewable energy might have several claimed benefits that don’t show up in cost comparisons (such as being more eco friendly in some ways, being renewable, and so on)

The same might be said for some traditional fossil fuel energy sources (such as being less variable, having better power density, delivering power to the grid in a more consistent and stable way which impact grid reliability, and so on)

Even nuclear power might have some of it’s own benefits that don’t immediately show up in cost calculations

So, these benefits might be weighed up against costs to understand if renewables are more of an investment for the long term future than a cost


Main Cost Factors For Different Energy Sources

The main cost factors are usually:

– Capital costs

Construction/building costs and all other costs to get the project up and operating


– Operation costs

Including but not limited to fuel costs (renewables like solar and wind may no have to refuel like some fossil fuels and nuclear might have to), maintenance and repair costs, labor costs, permit and licensing costs, cost to handle and manage waste, decommissioning costs, and so on


These costs can be calculated separately, or together as a total.

They might be expressed as the cost to produce a single unit of electricity, such as 1 kW of electricity


Capital Costs

From the data below, gas/oil combined cycle power plants might be the cheapest, followed by solar PV, onshore wind, and battery storage

Fuel cells might be the most expensive, followed by offshore wind and advanced nuclear has a resource that lists the different energy sources and their estimated capital costs (cost to construct)

The capital costs of different energy sources per kW, from cheapest to most expensive, are:

gas/oil combined cycle power plant – $1000/kW 

solar PV (fixed) – $1060/kW (utility), $1800/kW

solar PV (tracking)- $1130/kW (utility) $2000/kW

onshore wind – $1600/kW

battery storage – $2000/kW

conventional hydropower – $2680/kW

geothermal – $2800/kW

coal (with SO2 and NOx controls)- $3500-3800/kW

advanced nuclear – $6000/kW

offshore wind – $6500/kW

fuel cells – $7200/kW


It’s worth considering that the upfront capital and construction costs of some energy sources can be expensive.

However, cheaper operational costs can drop the lifetime costs of those energy sources down on average.

This may be the case with some newer forms of energy.

More information is available on this point in the resource


Operational & Running Costs

Part of what might make renewable energy cheap in some aspects during operation is the energy/fuel source is essentially free

Sunlight and wind for example are freely available in nature

However, some renewable energy sources might be more labor intensive compared to fossil fuels, and this might be a consideration in operational costs. notes that when it comes to fossil fuel energy:

Fuel costs can be [measured] per kWh and tend to be highest for oil fired generation, with coal being second and gas being cheaper. Nuclear fuel is very cheap per kWh …


Capital + Operation Costs Together also has a good graph which compares the relative cost of renewable forms of energy vs fossil fuels in 2016 (taking into account both set up and operational costs).

What we see is that costs can be context specific, but most renewables fall within a competitive range, even if their higher range prices can extend to be quite expensive.



Research & Development Costs

What is not specifically assessed in this guide is research and development costs.

Research and development of technology for a particular energy source can be expensive.

It’s worth considering these costs where they aren’t included for different energy sources.


LCOE (Levelized Cost Of Electricity) Of Each Energy Source

LCOE stands for levelled cost of electricity.

It’s an assessment of the cost (capital costs plus operation costs) vs power output of an energy source over it’s lifetime

Costs are divided by total energy output over the expected lifetime of an energy generating asset to get the cost to produce one unit of output/electricity – it can be expressed in $ per kWh for example

This allows a comparison of the different energy sources and the different methods of electricity generation, in terms of what their costs to produce the same unit of electricity are

Capital costs may include construction costs and plant/equipment costs

Operation costs may include labor costs, fuel costs, maintenance costs, insurance costs, waste management costs, cost of decommissioning, and so on

Other costs may also be considered, such as research and development costs

Some assessments may consider discount rates, credits and subsidies and other similar factors

Each LCOE might include and exclude different costs and factors in their assessment – so, it’s important to check what these inclusions and exclusions are for each set of LCOE data


What Is LCOE?


LCOE is … the net present value of the unit-cost of electrical energy over the lifetime of a generating asset

The LCOE [might] be regarded as the average minimum price at which electricity must be sold in order to break-even over the lifetime of the project.


The LCOE measure tries to evaluate the lifetime cost of lifetime energy production, from initial build to fuel use and maintenance to decommissioning (


How LCOE Is Calculated

… the LCOE is calculated over the design lifetime of a plant, which is usually 20 to 40 years, and given in the units of currency per kilowatt-hour or megawatt-day (


LCOE Of Different Energy Sources In The US

From the figures below in the US, hydro might be cheapest, followed by solar PV, onshore wind, and sometimes gas combined cycle

Coal might be the most expensive, followed by biomass



[An estimate of the LCOE of different energy sources in the US in 2018 was:]

Hydro – 39.1 (LCOE in $/MWh)

Solar PV – 45.7

On Shore Wind – 49.8 

Gas Combined Cycle – 46.3-67.5

Nuclear – 77.5

Biomass – 92.2

Coal – 98.6-104.3


The full table and supporting information can be accessed at the resource


It may be interesting to ask what impact the cost per unit of electricity of each energy source has on things like the total amount of electricity that can be generated from each energy source for the same amount of money, the number of jobs provided, and so on.


LCOE’s In Other Countries Worldwide

Global, national and regional LCOE estimates and calculations can be viewed and compared at resource

What is clear from the data is that LCOE differs in different places in the world – by country, by region, by State, by city, and so on.

This further illustrates the point we made above in this guide that different factors and variables impact the cost of different energy sources in different geographic locations around the world


A few examples of LCOEs of different energy sources in different parts of the world are:


– Solar


Australia has the lowest cost for solar PV and Africa has the highest due to investment costs

South Australia, along with China has the lowest unsubsidised, [LCOE] for concentrating solar power


– Both Wind & Solar mentions that (paraphrased) wind and solar PV are two of the cheaper LCOE energy sources in the UK and US


– Renewables In General notes: ‘China, the United States and Germany have already reached price parity for certain renewable sources’


Some LCOE Data Will Be Different To Other Sets Of LCOE Data

Below is a set of data from

It differs in some aspects to the data provided above.

In particular, there’s a discrepancy between where solar PV appears on each list, and also provides data for other energy sources that doesn’t

So, not all sets of LCOE data show similar costs for the same energy sources

It’s worth checking which city or country the each set of LCOE data is for, along with the specific inclusions and exclusions made to calculate costs


From, the cost to produce 1 MWh of electricity from different energy sources might be:

Natural Gas – $66/MWh

Hydro – $86

Coal – $95

Wind – $97

Geothermal – $102

Biomass – $113

Nuclear – $114

Petroleum – $125

Solar PV – $211


Potential Trends In LCOE

A potential trend that might be emerging across LCOE’s in some developed countries might be solar PV and onshore wind having a lower LCOE than conventional fossil fuel energy sources

Sometimes this might be due to renewables like solar and wind getting cheaper

Other times it might be due to fossil fuels get more expensive (if new plants are more expensive to build, new clean coal technology adds to cost, taxes and polluter penalties add to the cost of operation, and so on)

Inefficiency (of old plants) can also play a role in some places provides another set of data on LCOE where this point might be illustrated:

Onshore wind has the lowest average levelized cost in this analysis at $59 per megawatt-hour, and utility-scale photovoltaic [was at] $79

By comparison, the lowest cost conventional technologies were gas combined cycle technologies, averaging $74 per megawatt-hour, and coal plants, averaging $109

Looking across … 16 technology types, the 10 alternative technologies cost an average $147 per megawatt-hour, $18 less than the conventional approaches


Potential Limitations & Exclusions When Using LCOE 

A LCOE analysis might exclude some cost factors and considerations.

It might also generally be a limited analysis tool compared to some other ways of looking at energy costs.

We’ve paraphrased some of these exclusions and limitations from information provided in the and reports, and provided other information and our own commentary on potential exclusions and limitations when it comes to LCOEs:


– Dispatchability is not taken into consideration


– Power availability matching to the demand profile is not measured

i.e. what time demand peaks in the day or year, and being able to match it

Solar energy for example may sometimes experience issues with matching power availability to peak energy demand throughout the day or year


– Additional costs to make up for the variability of some renewables like wind and solar

Energy sources like wind and solar might be considered variable energy sources

These energy sources might require:

Backup energy sources

And also energy storage (like batteries) 


Both of these things add to the cost of using that energy source. for example mentions that in Australia, renewable energy from wind and solar is intermittent, and needs to be:

‘… “balanced” (or backed up) in order to be reliable [and] This requires investment in energy storage [and there’s also costs for backup energy sources]’


– Transmission lines might not be considered

In the MidWest in the US, according to several reports, the initial investment in transmission lines to transport wind and solar energy can be large, and it might be one of the biggest challenges to increasing capacity from these two energy sources

Australia is also a country where a significant % of their electricity related costs might come from their required investment in transmission lines and network costs

LCOE might not include the cost of transmission lines and similar infrastructure, which might increase the upfront cost of renewable energy sources significantly


– Grid integration is not considered

Some new energy sources and technologies such as some renewables may have a greater cost to integrate them into the power grid with new supporting infrastructure – this is to ensure power gets into the grid, and isn’t lost beforehand

This is in comparison to more traditional energy sources like coal and natural gas that are already integrated with infrastructure already in place


– Acquiring land for solar and wind is not considered

There can be a cost and practical challenges involved with this


– Quality of energy sources isn’t considered

Overall quality considers things such as the intermittency, reliability, and performance of an energy source

The cheapest option isn’t always better if the performance and overall quality isn’t as good

Some ‘clean’ forms of energy may look cheaper and more sustainable, but make not be able to support towns and cities by themselves without sacrificing overall performance


– Doesn’t always stipulate the difference between different fossil fuel technologies

For example, although there can be inefficiency concerns, some older fossil fuel power plants can be cheap in terms of their final LCOE

Some LCOEs show one figure for the cost of coal or natural gas for example, without stimulating if that figure is for older plants, or newer coal plants

Some newer coal super critical plants are more expensive

And, retrofitting or modifying existing plants with devices and features to minimize air pollution and emissions can be more expensive too


– Opportunity costs and losses may not be considered

With the some of the above points, what isn’t discussed with different energy sources is opportunity cost and losses that they can result in

As an example, if a particular energy source is intermittent, or doesn’t perform as well in terms of reliability, there might be an opportunity cost in terms of lost economic production from an unreliable electricity grid

Additionally, where new energy sources aren’t integrated into the grid properly and power is lost from that installed capacity, there are losses that result from this lost power that could have been used instead if there was proper integration


– Subsidies, taxes and other government factors

The cost that subsidies, taxes, and government side factors may add to the service of providing a certain energy source aren’t always considered or factored into LCOEs either


Other Ways To Measure Cost Of Different Energy Sources

There can be various other ways to measure the cost of different energy sources, other than what is listed above.

One example might be measuring the cost per unit of electricity that each energy source delivers e.g. dividing the cost to install an energy setup by the amount of watts or kWh it’s capable of producing.

We provide information on the cost of both solar and wind energy per watt produced in a separate guide.


Some Renewable Energy Technology Might Be Getting Cheaper

A range of reports indicate that especially over the last few decades, the capital cost of some renewable energy sources might be getting cheaper in some countries, and are either becoming similar in cost, or cheaper than some fossil fuels

This might be the case for solar PV and onshore wind specifically as energy sources

Continued investment in research and development, improvement in technology, growing demand, and economies of scale are some of the reasons given for the cost decreasing

Some reports indicate that this trend of renewable energy costs decreasing could continue into the future with the advancement of new technologies

The performance and reliability of these energy sources may also improve


Solar Specifically notes that in Australia:

The price of solar has been falling at the rate of 26 per cent since 1979, every year, and it continues to do so. 

In about 2013-2014, solar started to compete with traditional energy generating technologies

By 2015 it was clear it was well on par and in 2017 there is no doubt that solar is the cheapest form of electricity …



… between 2006 and 2016, the average value of photovoltaic modules themselves plummeted from $3.50/watt $0.72/watt—an 80 percent decrease in only 10 years.


Solar & Wind Specifically


Renewable energy sources, notably solar and wind, are reaching price and performance parity on-and-off the grid

Three key enablers – price and performance parity, grid integration, and technology – allow solar and wind power to compete with conventional sources on price, while matching their performance.

As technologies, including blockchain, artificial intelligence (AI) and 3D printing continue to advance the deployment of renewables, prices will likely continue to fall, and accessibility will improve



Fossil fuel generation today costs between $0.05 – $0.17 per kilowatt hour in G20 countries, including the U.S., the U.K., Russia, Japan, India, and Germany.

By 2020, however, renewables are expected to cost $0.03 – $0.10 per kilowatt hour, with the price of onshore wind power and solar photovoltaic (PV) projects expected to be as low as $0.03 per kilowatt hour by 2019.

Presently, offshore wind projects and solar thermal energy can still be quite costly, but they too are expected to drop in price between 2020 and 2022 — to $0.06 – $0.10 per kilowatt hour



Historically, hydropower has been the cheapest way to source renewable electricity [but that might be changing into the future]

Wind and solar (also called photovoltaic solar, or PV) have become the most economic forms of electricity


Renewables In General


As technology and economies of scale improve over time, the initial capital cost of building an energy generator decreases [and] This is known as the “learning rate”.

Improvements in technology are expected to reduce the price of renewables more so than coal in coming years



Renewable energy capital costs have fallen dramatically since the early 2000s, and will likely continue to do so.


Wind and solar technology is getting cheaper … (


Some Fossil Fuel Technology Might Be Getting More Expensive

A range of reports indicate that especially over the last few decades, the cost to generate power from fossil fuels like coal is increasing

Both coal and natural gas in some countries may be more expensive to produce power from than some renewables

Older coal plants might have been cheaper to generate power from, because they essentially didn’t have to pay a cost upfront for externalised costs such as air pollution or emissions, and the effects of those things 

But new plants (like super critical plants), and new devices and technology used on coal plants (like air pollution control devices, and carbon capture technology) might be more costly

Clean coal technology specifically can be more costly

Other things that might be making fossil fuels more costly to produce power from might be carbon pricing and carbon taxes, ‘polluters pay’ taxes, fines and penalties for environmental damage, new permits and licenses, as well as miscellaneous costs for things like emissions auditing and reporting

The general capital cost of new coal plants and technology make also be more expensive


Coal vs Renewables compares the cost of existing coal stations, new coal stations, and wind power in Australia:

In 2017 [in Australia], the marginal cost of generating power from an existing coal station [old coal stations] is less than $40/MWh

… wind power is $60-70/MWh.

… new supercritical coal power [comes in] at around $75/MWh

[In the future] the weighted average cost of capital for coal is projected to be 14.9%, compared to 7.1% for renewables also explains the potential impact of carbon pricing on new coal plants:

In the future, a carbon price in Australia could put super critical and ultra critical coal plants up to a LCOE of around $100 per MWh … and this is in comparison to a completely renewable electricity system at $75-80 per MWh]



Around 75% of coal production is [now] more expensive than renewables, with [a prediction for the coal] industry [to be] out-competed on cost by 2025 …


Coal & Gas vs Solar Specifically


[Now, in Australia, coal fired power stations and gas turbines cost more to produce electricity compared to solar farms, when built from brand new]


Fossil Fuels In General


[Capital investment costs for fossil fuel plants now compared to 60 years ago are very different]


Other Cost Factors That May Impact Different Energy Sources (Indirect, & External Costs)

Other than more direct capital costs and operational costs outlined above, there are indirect and also external costs to consider with different energy sources

These indirect and external costs can be harder to quantify or calculate

They might include, but aren’t limited to:

Infrastructure costs

Infrastructure support costs

Consulting and expert costs

Environmental costs (and the cost of addressing them)

Social costs (and cost of addressing them), including health costs

Miscellaneous costs 


Infrastructure Costs

Infrastructure includes anything that facilitates the transmission and delivery of electricity from the generation site to the end user.

Examples include things like poles, wires and transmission lines, the design and capacity of the electricity grid, interconnectors, and so on.

Because of the role that infrastructure plays, infrastructure costs are unavoidable

Sometimes existing infrastructure as is can be used for new power plants and new energy generation set ups.

Sometimes existing infrastructure is modified or upgraded

Existing infrastructure will also need to be repaired or replaced from time to time.

Sometimes completely new infrastructure needs to be built for new energy generation setups.

Increasing capacity for future electricity demand might be one reason infrastructure works are carried out.

Specifically for renewables, some reports say that renewables save infrastructure costs, and other reports say they increase costs.


– Infrastructure Costs In General


… investment costs associated with replacing old and retiring infrastructure with new plant … are significant and unavoidable.


– Renewables Decreasing Infrastructure Costs

[Renewable energy may lead to] smaller increases in the cost of maintaining power poles and wires and green schemes [but may be offset by lower wholesale power prices] (


– Renewables Increasing Infrastructure Costs


[Some of the indirect costs for renewables comes from] their intermittency and the need to build additional transmission lines and generation, most commonly gas-fired turbines, to provide electricity when the wind doesn’t blow and the sun doesn’t shine

[Additional costs also include] grid-scale batteries


From ‘[In Australia, renewables need] more transmission lines within the electricity grid to ensure ready access to renewable energy and storage in different regions, which increases transmission costs.’



[New wind farms present some problems to infrastructure]

… [existing] transmission lines are thin and can’t handle more power coming into the system

[So we may see] transmission lines … upgraded to allow for increased renewable energy generation



[A large number of new renewable energy projects can increase] the complexity of every connection in the market

[There may be changes to] the way new transmission lines and interconnectors are built [or planned, to allow renewables to connect to the grid in a better and cheaper way]

[ lists these changes in their article]



[There might be a number of good renewable energy zones across an existing energy grid, but a number of new ones might need to be created or accessed in order to replace existing or retiring fossil fuel generators]

… improving interconnection [of renewables may cost money initially, but may have system and performance benefits, and provide access to lower costs energy sources]


Support Costs

Some energy sources need various types of support infrastructure to function reliably, or at all

Some renewables for example may need backup energy sources like combined cycle gas turbines that can ramp up and down quickly, and different energy sources may need to be turned on and off to deal with the intermittency of solar or wind in some instances (and turning off these energy sources impacts their costs and profit)

These same renewables may also need energy storage batteries that can store energy for later use (like the big battery installed in South Australia recently – the biggest of its kind at the time). These batteries need to be connected to the grid too.

Other renewables may also have additional network requirements compared to traditional energy sources


[To deal with capacity issues for a solar farm in Mildura in Australia, a] massive machine [was added to the project], known as a synchronous condenser … [which] can balance the energy output and protect the grid … [however,] it’s a hugely expensive piece of equipment (


[In Australia,] the addition of pumped-hydro storage and extra network construction would add a levelised cost of balancing of A$25-30 per MWh to the levelised cost of renewable electricity (


Consulting & Expert Costs

Can include additional expertise from consultants such as engineers and other experts.

Some newer forms of energy like renewables may have additional consulting costs to consider.



[In Australia, renewables also have] additional engineering requirements, like building “inertia” into the electricity system to maintain voltage and frequency stability.

Each additional requirement increases the cost of electricity beyond the levelised cost.


Environmental Costs

Polluting energy sources, or dirty energy sources, can lead to a range of environmental issues.

Two of the most significant are greenhouse gas emissions, and air contaminants leading to air pollution.

But, there may be others, like water pollution, ocean warming and acidification, acid rain, and so on.

There may be financial costs to address and clean up these environmental issues across society.

Taxpayers and governments for example may end up paying to address some of these issues.

Read more about the potential economic benefits of renewable energy when it comes to saving money on addressing environmental issues.


Social & Health Costs

There can be costs of addressing the social and health issues caused by different energy sources.

One of the most significant social/health issues caused by some fossil fuel energy sources is caused by outdoor air pollution.

It can lead to higher mortality rates and several different health problems.

Read more about the potential health costs of air pollution in this guide, and about what the safest and most hazardous energy sources might be in this guide.


Miscellaneous Costs

There can be other miscellaneous costs indirectly borne by society as a whole as a consequence of using different energy sources.

Some of these might include:

– Higher Electricity prices

Where capital costs and operational costs are higher for electricity producers and suppliers, these increased costs may be passed on to consumers in the form of increased electricity prices 

Subsidies and taxes, as well as government policy and programs for new energy sources may also lead to higher electricity prices

Denmark, Germany, Belgium and other countries may be examples of countries that have experienced higher electricity prices as a result of renewable and green energy taxes/subsidies, and costs to support renewable portfolio standards and renewable energy credit (REC) programs

Read more about whether renewable energy causes higher electricity prices in this guide.


– Other Costs

Additional and external cost factors are outlined at


Also, there are some good weighted costs (taking into consideration more than just LCOE) of different energy sources at


The Actual Cost Of Providing Electricity As A Service To A Power Grid Using Different Energy Sources

Explaining The ‘Actual Cost’ Of Providing Electricity As A Service For Different Energy Sources

An energy source ultimately has to be able to contribute to delivering a high quality, reliable electricity supply to power grid alongside other energy sources being used in the overall energy mix

But, because each energy source functions differently, each energy source may have different requirements to help deliver this electricity supply.

Some energy sources have more costly requirements transport and distribute electricity, and feed it into (and use it within) a grid than other energy sources do

The net sum of the cost of the energy source itself (capital costs, operation costs, etc), and also these separate infrastructure and power grid related requirements, might form the actual cost of an energy source to supply electricity to the grid as a full service

This actual cost/full cost might ultimately impact the price the end consumer pays for electricity



Supplying energy is a service – you have to think about not only the energy source itself, but how it is prepared and delivered [for the electricity grid, and to the end consumer]…


Examples Of What Might Be The ‘Actual Cost’ Of Different Energy Sources

Some reports indicate that renewables like solar and wind may cost more when delivering electricity to a power grid

This is because these energy sources are variable/intermittent, and they may need:

– A backup dispatchable energy source (such as natural gas) to help them meet baseload power requirements

– Energy storage in the form of a very large battery, or batteries, to store surplus energy for later use when they aren’t generating enough power to meet the demands of the grid

They may also be other costs to consider, such as the requirement for additional transmission lines being, needing to upgrade the existing grid, infrastructure such as converters, taxes and levies, and so on.

Other energy sources may even have to restrict their own power to prevent overloading the grid or oversupplying electricity, which is an indirect cost.

These factors form part of the whole ‘service’ of providing electricity in a local power grid with certain energy sources.


Other reports indicate that although an energy source like nuclear might be expensive upfront from a capital costs perspective, it isn’t variable/intermittent as an energy source like solar and wind might be, and therefore doesn’t incur extra costs for backup energy or a battery for energy storage in the same way.

Fossil fuels are also not variable/intermittent energy sources.



… ramping nuclear plants to accommodate intermittent electricity from solar and wind simply adds to the cost of making electricity without delivering fewer emissions or much in the way of cost-savings.

That’s because only very small amounts of nuclear fuel and no labor is saved when nuclear plants are ramped down


Is Renewable Energy An ‘Investment’, Or A Cost?


– Benefits

Although there are short term costs and challenges that come with developing, integrating and using renewables, there might be benefits they provide in the longer term.

There may be social and environmental benefits in particular. 

There’s premature deaths that coal related air pollutants are linked to. Hundreds of millions of people might currently live in areas of China with harmful air pollution levels according to some reports

In some places, there’s air and water pollution from coal and natural gas plants too


– Potential Cost Savings That Would Have Been Spent On Addressing Issues That Fossil Fuels Can Contribute To

Also, where renewable energy doesn’t contribute as heavily during operation to air pollution and emissions, it’s possible renewable energy may help save costs in an indirect way by not having to spend as much money to eventually address these issues (via air pollution and emissions mitigation and clean up activities and systems, and potentially the public health cost/burden that some types of air pollution may contribute to) indicates that the cost savings in using solar and wind could be signifiant when it comes to climate and air pollution effects:

… [the] climate benefit estimates [of solar and wind energy] ranged from $5 billion to $106 billion, with an additional $30 billion to $113 billion in air quality and public health benefits.

And that’s just the estimated economic benefits of the averted 3,000 to 12,000 premature deaths—it doesn’t count things like sub-lethal medical issues … lost productivity … [or the] personal benefits to individual lives …


Specifically in China, indicates that (paraphrased) there could be hundreds of billions of dollars saved which China would otherwise invest in addressing different societal costs, such as climate change damages, public health damage and burden from air pollutants (like NOx, SO2, PM2.5, and mercury emissions), coal transport rail accidents, coal mining effects, government subsidies, and so on


[One] study estimated the life cycle costs and public health effects of coal to be an estimated $74.6 billion every year (


The above points may make renewable energy more an investment than a cost.

Read more about the potential importance and benefits of renewable energy here.



Interestingly, on the flip side for renewables, some reports indicate that large scale renewable energy transitions require the unsustainable use of certain raw materials

There may also be a range of general drawbacks to consider with renewable energy sources.

These things may lead to some renewables being more of a cost than a benefit



Overall, each energy source in each geographic location might need it’s own net cost/benefit analysis to determine if it’s an investment or cost.
















12. Various ‘Better Meets Reality’ guides















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