Wind Energy LCOE Calculator

It divides the present value of total project costs (capital cost plus discounted operations & maintenance and decommissioning) by the present value of total energy produced over the project's Lifetime, both discounted at the same Discount Rate. This is the same core discounted-cash-flow structure used by widely cited industry LCOE references such as NREL's Annual Technology Baseline and Lazard's LCOE analysis, though this calculator applies it to whatever cost and production figures the user enters rather than an assumed current-market benchmark.

A higher Discount Rate shrinks the present value of both future costs (O&M, decommissioning) and future energy production, since both streams are discounted the same way. But most of the Capital Cost is paid immediately and is not discounted at all, while nearly all the energy production happens in future years and is heavily discounted -- so raising the Discount Rate shrinks the production side of the ratio more than the cost side, which generally pushes LCOE ($/kWh) higher.

Annual Degradation reduces each future year's energy production compared to the prior year (production in year y equals Annual Production times (1 - degradation) raised to the power y-1), reflecting the real-world tendency of wind turbine output to decline slowly over the project's life from wear and blade erosion. Higher degradation lowers total discounted production without changing project costs, which raises LCOE.

LCOE (Discounted) accounts for the time value of money -- it discounts both future costs and future production back to present value using the Discount Rate before dividing. Simple LCOE ignores discounting entirely, just spreading Capital Cost evenly across the project Lifetime and adding Annual O&M, then dividing by Annual Production. Simple LCOE is a quick approximation; the discounted figure is the more standard metric for comparing project economics.

No -- Capital Cost, Annual O&M, Annual Production, and every other cost figure are all supplied by the user rather than fixed to a specific industry benchmark. The formula structure matches standard LCOE methodology, but the result is only as representative of real market conditions as the input figures entered, which will vary significantly by turbine technology, site wind resource, and installation year.