Basic Costs for Generating Electricity

Knowing what it costs to generate electricity will help to understand why alternatives such as wind and solar are bad bets for the United States. Spain and Germany have both already come to the realization that subsidizing these alternatives, wind and solar, is economically devastating.

Table I shows the costs applicable to base load power plants.



Fuel & Operating Costs

Costs incl. Depreciation

Construction Costs

Traditional Coal $0.02 /kWh $0.04 /kWh $2,000 /KW
Ultra Supercritical Coal $0.02 /kWh $0.06 /kWh $2,800 /KW
Natural Gas Combined Cycle Currently <$0.02/kWh Currently <$0.06 /kWh $1,100 /KW
Nuclear $0.02 /kWh $0.10 /kWh $5,000 /KW
Integrated Gasification Combined Cycle NA NA $5,000 /KW

Ultra-supercritical coal-fired power plants operate at very high temperatures and pressures.

Table II shows pollutants, from best to worst, associated with these types of generation.




Nuclear No emissions. Spent fuel must be stored or reprocessed.
Natural Gas Combined Cycle Produces lowest emissions of NOx & SOx. Has no emissions of Hg. Emits CO2.
Integrated Gasification Combined Cycle Can capture >90% of NOx, SOx and Hg, and also 90% of CO2
Ultra Supercritical Coal1 Has a thermal efficiency of around 45%. Emissions of NOx, SOx and Hg reduced 85% to over 90%. Emits slightly more CO2 than NGCC plants.
Traditional Coal Existing fleet has a thermal efficiency of 33%. Emissions of NOx and SOx are largely captured from the flu gas. Hg capture has been difficult. Emit ~40% more CO2 than NGCC plants.


Nuclear has no emissions of pollutants and also doesn’t emit CO2. Nuclear is the most expensive in terms of construction costs, but is very competitive in terms of fuel and operating costs. Its costs for generating electricity are higher than the costs for natural gas and ultra-supercritical coal.

Natural gas combined cycle has low emissions and produces electricity at low cost. The current very low cost for natural gas, because of fracking, results in NGCC currently being the lowest cost alternative.

Ultra-supercritical coal-fired power plants have low emissions and produce electricity at low cost. They have vastly better thermal efficiencies than traditional coal.

Integrated gasification combined cycle (IGCC) plants have construction costs twice as great as ultra-supercritical coal and will probably produce electricity at a very high cost, perhaps two to three times higher than ultra-supercritical coal-fired power plants. To be effective, they must be able to sequester CO2.

Note that IGCC plants are those proposed for capturing CO2 so that the CO2 can be sequestered. They convert the coal into gasses that can be burned in a gas turbine.

Table III shows construction costs for various alternative generation methods adjusted to reflect their capacity factors. They reflect the true cost of building a power plant based on the amount of electricity they produce.




Capacity Factor

Construction Costs

Wind, land based


$6,600 / KW
Wind, off shore


$6,200 to $12,800 / KW
Solar, PV

16% – 25%

$24,000 to $37,000/KW
Solar, concentrating

22% – 30%

$12,000 to $20,000 / KW
Ultra-supercritical coal


$3,500 / KW


Capacity factor measures the amount of electricity actually produced over the period of a year, compared with what could theoretically have been produced based on the nameplate rating of the unit.

A 1 MW unit with a capacity factor of 30% delivers one third the electricity that a 1 MW unit with a capacity factor of 90% would produce. It will take three of the 1 MW  units having a capacity factor of 30% to replace the single unit with a capacity factor of 90%.

Wind and solar are intermittent and can’t be relied on to generate electricity when needed.

The costs in Table III for wind and solar do not include the cost of building dedicated transmission lines or the cost of keeping gas turbine generators in spinning reserve 24/7, ready to be brought online when the wind stops blowing or the sun stops shining.

When the construction costs of alternatives such as wind are compared with base load power plants, it’s clear that electricity from wind and solar will be much more expensive even though they have zero fuel costs.

These tables and data are worth referring to when evaluating different methods for generating electricity.

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