What methods can policymakers use to move past LCOE and calculate the total system costs of a decarbonized grid?
Levelized Cost of Energy (LCOE) tells you the price of a single generator, but it ignores the grid itself. To see the full picture, policymakers must transition to a System Value Framework. This approach moves beyond simple generation costs to include integration expenses, such as transmission expansion, backup capacity, and storage requirements.
First, planners should use high-resolution temporal modeling. Since wind and solar don't produce power on demand, the grid needs more than just wires; it needs flexibility. Modeling must account for the cost of keeping gas plants on standby or installing massive battery arrays to bridge gaps when the sun sets. These
