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LCOE formula

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Power0020

Power0020

Electrical
Jun 11, 2014
303
Levelized cost of electricity formula uses the net present value (NPV) of investment and future expenses in numerator which makes sense, as the expenditure in future will mean less cost today, and vice versa. The denumerator however shows a present value for the power generated in future! I can't understand the reason behind that!.

Does 1 kwh today means 1/(1+r)^n after n years? HOW?
 
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