Beyond LCOE: A Systems-Oriented Perspective for Evaluating Electricity Decarbonization Pathways

The report critiques the reliance on Levelized Cost of Electricity (LCOE) for power system planning, noting that while useful for tracking historical technology costs, it fails to account for system-wide needs, generation profiles, and integration costs. It highlights that clean firm technologies can reduce overall system costs despite higher LCOEs. The authors recommend moving toward comprehensive system-level analyses that model temporal and spatial constraints to optimize decarbonization pathways.

• LCOE is an inadequate sole metric for deep decarbonization planning because it ignores a project's value to the system, including system needs, generation profiles, dispatchability, inertia, and the full cost of transmission and distribution infrastructure.
• Customer electricity costs are determined by total system costs rather than a sum of individual project LCOEs. In the UK, only one-third of customer costs are attributed to generation and storage, while in California, this figure is approximately 25% due to transmission and wildfire expenses.

APA

Moraski, J., Qvist, M., & Spokas, K. (2025). Beyond LCOE: A Systems-Oriented Perspective for Evaluating Electricity Decarbonization Pathways. Clean Air Task Force. https://cdn.catf.us/wp-content/uploads/2025/06/30100806/CATF_BeyondLCOEReport_Proof_09.30.25.pdf

Chicago

Moraski, Jill, Malwina Qvist, and Kasparas Spokas. Beyond LCOE: A Systems-Oriented Perspective for Evaluating Electricity Decarbonization Pathways. Clean Air Task Force, 2025. https://cdn.catf.us/wp-content/uploads/2025/06/30100806/CATF_BeyondLCOEReport_Proof_09.30.25.pdf.

Wikipedia

{{cite report |last1=Moraski |first1=Jill |last2=Qvist |first2=Malwina |last3=Spokas |first3=Kasparas |title=Beyond LCOE: A Systems-Oriented Perspective for Evaluating Electricity Decarbonization Pathways |publisher=Clean Air Task Force |date=May 2025 |url=https://cdn.catf.us/wp-content/uploads/2025/06/30100806/CATF_BeyondLCOEReport_Proof_09.30.25.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{moraski2025beyond, author = {Moraski, Jill and Qvist, Malwina and Spokas, Kasparas}, title = {{Beyond LCOE: A Systems-Oriented Perspective for Evaluating Electricity Decarbonization Pathways}}, institution = {Clean Air Task Force}, year = {2025}, month = may, url = {https://cdn.catf.us/wp-content/uploads/2025/06/30100806/CATF_BeyondLCOEReport_Proof_09.30.25.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }