A peer-reviewed study using Denmark as a case study has found that renewable energy portfolios outperform nuclear power on total system cost in the modeled future integrated Danish energy system, once the expenses of grid balancing, storage, and sector coupling are included in the comparison.
The “SLCOE – system-based LCOE for comparing energy technologies in different systems” study, recently published in Energy and led by Henrik Lund of Aalborg University, introduces system-based levelized cost of energy (SLCOE) as an alternative to the standard LCOE metric. LCOE only measures the cost of producing a unit of electricity from a given technology, but SLCOE adds the cost of integrating that technology into the wider energy system. The co-author list includes 10 other researchers.
“While the LCOE is a function of the technology itself, the SLCOE is a function of both the technology and the energy system context in which it operates,” the paper states.
Co-author Christian Breyer, a professor of solar economy at LUT University in Finland, told pv magazine that the metric addresses a fundamental gap. “If one only optimizes within the electricity sector, one will not be able to identify these much better solutions,” said Breyer.
The study models Denmark's current electricity-only grid and a future climate-neutral energy system with full sector coupling, using the EnergyPLAN model for hourly simulation across all energy sectors. The authors note that some conclusions are Denmark-specific, given its wind-dominant resource base and existing flexibility infrastructure.
In today's electricity-only system, system costs are high across all technologies when each is modeled as the sole supply source. Solar carries a combined SLCOE of approximately €565/MWh in that context – not because PV is inherently expensive to integrate, the authors argue, but because any single technology faces steep system costs without the flexibility options a fully coupled energy system provides. Nuclear reaches approximately €141 ($166.3)/MWh in the same electricity-only context. The least-cost mix of offshore wind, solar, and gas combined-cycle turbines reaches approximately €66/MWh.
In a future climate-neutral integrated system, which is the paper’s central comparison, nuclear’s SLCOE is approximately €100/MWh. The least-cost mix of offshore wind and PV reaches about €46/MWh. Offshore wind alone also reaches about €46/MWh. Onshore wind reaches about €106/MWh, while solar reaches about €178/MWh as a standalone technology. Its cost falls sharply when combined with wind in the least-cost portfolio.
The driver of that cost reduction for renewables is sector coupling, said Breyer.
“We document how essential it is to include the whole energy system in the search for least cost solutions,” Breyer said. Sector coupling provides thermal storage, hydrogen storage via electrolysis, flexible heat pump operation, and electric vehicle smart charging – options unavailable in an electricity-only grid, he added.
The sensitivity analysis tests four cost assumption sets – IEA World Energy Outlook 2023 and 2024 projections and two Danish Energy Agency scenarios, one applying 50% higher capital expenditure on renewables to reflect post-2022 inflation. The cost of flexibility technologies is also stress-tested with a 50% capex increase, with minimal effect on the results.
Under all scenarios in the future integrated system, renewables outperform nuclear on SLCOE. Nuclear does not appear in the least-cost solution under any assumption set tested.
The paper uses International Energy Agency (IEA) assumptions of €480/kW for utility-scale solar in 2050. Breyer noted that current real-world utility-scale solar is closer to €400/kW, meaning the modeled solar advantage may understate what current market conditions would produce.
For solar-dominant markets outside Denmark – southern Europe, the Middle East, India – where wind resources are limited, Breyer pointed to external literature indicating batteries and flexible demand serve as the primary integration tools.
“The combination of very low-cost solar PV LCOE and low-cost battery capex emerge as the central backbone of any energy system in the Sunbelt,” he said. Those figures are not part of the Denmark SLCOE modeling.
The paper explicitly excludes the cost of nuclear waste storage facilities and the opportunity cost of foregone renewable deployment during nuclear construction. Breyer said their inclusion would widen the cost gap further, although the paper does not quantify this.
For nuclear, the paper models an effective capital cost of €10,000/kW in EnergyPLAN. The paper notes that this is not a literal overnight cost but a modeling device: applying an 8% discount rate to the IEA's overnight cost assumption of €4,500/kW yields the same annualized capital burden as assuming €10,000/kW at a uniform rate. The paper notes that nuclear capital costs in recent European projects have exceeded initial estimates by roughly 100%, and that a literature review of nuclear learning rates found a range of negative 25% to zero – the least favorable of any generation technology reviewed.
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Sorry but the metric mentioned in the story is heavily biased.
Like LCOE, the assumptions make the model, and the assumptions were developed based on Denmark’s needs, not on a global basis. Like LCOE, the operating life of the plants is not a factor in te model that I can find in a review.
There are better metrics that exist, like the one proposed by IEAGHG.
As always doing the math in your context is critical to finding an affordable answer.
Depending on where you live, renewables may only work 1/3 to 1/2 of the time, especially solar in the winter months. Nuclear is 24/7/365 no matter the season. Same with coal and natural gas So when you say renewables 54% cheaper, it’s actually a wash.
Do you need a cheap car? For example, driving at speeds no higher than 70 km/h? Then you need to support biofuels. Besides biodiesel and alcohol, there’s also wood. Wood gasification allows 3 kg of brushwood or cheap firewood to replace 1 liter of gasoline. Wood can be grown for a couple of years after planting, meaning there’s no need to cut down the entire forest. For a long time, lobbyists relied on mandatory electronic driver assistance systems to limit the number of competitors. For speeds of 70 km/h and below, they’re not necessary; a seat belt and insurance are sufficient.
It’s possible to make a simple biofuel car that’s cheaper than an electric car at a starting price.
Biofuels will exist even after oil runs out. Biofuels will exist even after all the lithium has been extracted. If you’re an eco-activist, please answer this question: when will you throw away all the synthetic things—for example, winter clothes, plastic items like toothbrushes and combs, shoes with artificial rubber soles, electronics (PCs, phones, washing machines), and, of course, electric cars?
11% of oil, after refining, is converted into rubber, plastic, synthetic fibers, cable insulation, and industrial oil, essential for any production.
Substances from oil can be replaced by biomass processing. They are obtained at a rate of 1% of the volume of oil.
Biomass gasification produces a mixture of combustible gases: CO, H2, and CH4. Plants absorb CO2 as they grow. Increasing atmospheric CO2 levels have increased crop yields and forest biomass growth.
During the time of the dinosaurs, CO2 averaged 1200 ppm; now it’s 425…
The transition to electric cars is a scam to extract consumer money. If you don’t think so, how many years will the resources last if we produce 90 million electric cars a year?
Nuclear power is the best source of energy we have.