WaterPower Canada is pleased to announce the release of its fourth and final report in its 2023 Research Project Series , Comparative Analysis of Electricity Generation Costs by Source. This report was completed by Hatch and is intended to provide a comparative analysis of the current and future costs of various generation alternatives.
The purpose of this paper is to help inform policymakers of the cost comparison between different electricity sources when considering pathways to achieve a net-zero electricity infrastructure in Canada.
A comparative analysis of the Levelized Cost of Energy (LCOE) for various sources of electricity generation, based on available literature, shows that energy from wind and solar electricity is generally less expensive than hydropower and other technologies. This comparison, however, excludes integration costs of solar and wind to manage grid reliability.
An alternate metric, Value Adjusted Levelized Cost of Energy (VALCOE), adjusts the LCOE of various generation alternatives such that they can be compared on a like-for-like basis related to the value that each generation alternative brings to the respective interconnected grid.
The VALCOE for non-dispatchable renewables is higher than the LCOE because of their integration costs. The actual costs are grid-specific, but generally the more variable the generation source and the less correlated it is with power demand, the higher are the potential additional costs imposed on the system.
WaterPower Canada is grateful to Energy and Natural Resources Canada for funding the completion of this report.