This project is intended to provide information on the full lifecycle
cost of a range of utility-scale electricity generation technologies to
help DFID support developing countries in determining the most
sustainable and affordable energy pathways for growth, improve energy
access, highlight where and how government/donor support may be
appropriately deployed to support more diverse generation, and to give
private sector investors visibility of potential future opportunities.
Bloomberg New Energy Finance has therefore examined levelised costs of
electricity (LCOE) for major generation technologies across DFID’s 28
This report summarises the detailed country level LCOE estimates derived
by BNEF; they have been created based on a set of real-world data and
assumptions that reflect project costs by technology at a single point
in time. The analysis should help identify areas where country
governments and donors may (or may not) need to focus interventions
designed to foster greater private investment in electricity generation
and ongoing economic growth.
Recognising the limitations of data availability for many of the
countries considered, the report infers a number of possible high-level
policy conclusions for donor organisations, national governments and the
- Countries should seek a mix of generation to increase electricity
independence and security of supply.
- Despite dramatic reductions in the costs of wind and solar technology,
support is still needed to improve renewables competitiveness in many
markets. Financing, operation and capital costs can be reduced through
ongoing deployment and building local experience. In particular:
–Finance costs can be reduced by educating local banks and investors
to overcome perceived technology risk and build confidence.
Partnerships may be effective.
–Capital costs can be reduced by supporting continued development of
supply chains for new technologies.
–Make use of reverse auctions or other competitive tendering to
ensure efficient price discovery and market development.
- Government and the private sector should be helped to realise the
potential of small hydro, where resources are available.
- Government or donor finance should not be necessary for gas-fired
power generation in most countries, but there may be scope for donor
finance where electricity supply is significantly constrained
(although the fundamental barriers to investment should be
Henbest, S.; Mills, L.; Orlandi, I.; Serhal, A.; Pathania, R. Levelised Cost of Electricity. BNEF, London, UK (2015) 83 pp.
Levelised Cost of Electricity