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Academy · 03 / 02 · Markets
Economics: CAPEX, OPEX, LCOE and LCOS
Use cost metrics consistently and know what they leave out.
Live data · verify before use
- Level
- Applied
- Reading time
- 15 min
- Reviewed
- 2026-08-24
- Next review
- 2027-02-24
- Jurisdiction
- Global · market inputs vary
What you will learn
- 01Normalize currency, date, tax and capacity basis.
- 02Build a transparent discounted cost model.
- 03Separate cost competitiveness from project value.
Core concepts
CAPEXOPEXWACCLCOELCOS
01
Comparable inputs first
CAPEX and OPEX must state currency year, tax treatment, real or nominal basis, MWdc/MWac/MW, included scope and delivery point. LCOE discounts lifetime cost and energy; LCOS also depends on charging energy and a declared storage-system boundary.
02
Cost is not value
Two projects with the same LCOE can have different capture prices, congestion, curtailment, capacity value, tax, credit and contract risk. Use LCOE or LCOS as one measure, then model revenue timing and risk explicitly.
Decision notes
- 01Never compare cost figures without the same vintage and scope.
- 02A public benchmark is not a supplier quote.
Primary sources
Open the official source and confirm its current edition, jurisdiction and adoption before applying it.