Assessment of the levelized cost of energy using a stochastic model

The levelized cost of energy (LCOE) is a widespread metric that doesn't disfavor any power generation or saving technology. In this paper, a stochastic model of the LCOE is provided. The proposed model includes all main parameters to be applied on renewable, non-renewable and energy saving systems. These parameters were modeled through non-homogeneous Poisson process as well as Weibull functions. Besides, a continuous optimization model is proposed to calculate the optimal LCOE under the constraints of main Capex/Opex expenditures. Under such conditions, the optimal value of the levelized cost of energy is obtained, which captures parameters' influence on this metric. Afterwards, these parameters' influences on the LCOE were assessed through a sensitivity analysis. (c) 2021 Elsevier Ltd. All rights reserved.