User:David MacQuigg/Sandbox/Cost of clean power

A critical factor in understanding which solutions to our climate crisis are viable is the cost of electricity provided by each solution. We can break this cost down into capital costs, operating costs, and administration. Capital costs include siting, licensing, construction, and interest on borrowed funds. Operating costs include fuel, maintenance, and waste disposal. Many of these costs can be separated by where the costs are incurred - generation, transmission, or distribution. Communities relying on long transmission lines, for example, may see higher costs.

To make these costs intuitive, we will summarize them in units most familiar to the end consumer - operating costs in dollars per kilowatt hour (KWh) and capital costs in dollars per month per kilowatt size of service. A 100 amp service (240V) costing $50 per month would be $2.08 per month per KW. An additional cost of $25 for 500 KWh delivered in the month, would be $0.05 per KWh. A typical electric bill will include other costs like billing, administration, and taxes, but we will ignore these as not relevant to our choice of technology for delivering clean power.

Let's say a community needing 500MW is trying to decide on a mix of local solar generation, hydropower from a dam 500 miles away, and local nuclear power. Let's assume capital costs are 6% per year, and amortize $500 million capital cost minus salvage value over a 50 year lifetime. Capital cost is then {$15} million per year, or $2.50 per KW per month.