Planning · Economics · Levelized Cost of Energy

LCOE — Levelized Cost of Energy for Wind Power

Levelized Cost of Energy (LCOE) is the central economic metric: what does one MWh of generated electricity cost over the turbine's lifetime? A project is only profitable if the LCOE is below the achieved marketing price.

Formula

LCOE = (CAPEX × CRF + OPEX_fixed) / Annual Yield + OPEX_variable

CRF (Capital Recovery Factor) = r · (1+r)ⁿ / ((1+r)ⁿ − 1)

r = discount rate (WACC), n = project lifetime in years. At r=5% and n=20: CRF ≈ 0.0802.

Current LCOE Values — Onshore Wind Germany (2026)

Site Type	LCOE	Full-Load Hours
Top coastal site	40–55 €/MWh	3,500+ h/a
Northern Germany inland	55–70 €/MWh	2,800–3,500 h/a
Central uplands / southern inland	65–85 €/MWh	2,300–2,800 h/a
Low-wind southern site	75–95 €/MWh	2,000–2,500 h/a

Comparison with Other Generation Technologies

Technology	LCOE 2026 (Germany)
Onshore wind	40–95 €/MWh
Offshore wind	50–85 €/MWh
Solar PV (ground-mounted)	40–70 €/MWh
Solar PV (commercial rooftop)	60–110 €/MWh
Gas-fired power plant (incl. CO₂ certificate)	80–130 €/MWh
Hard coal (incl. CO₂ certificate)	100–160 €/MWh
Nuclear (new build)	110–200 €/MWh

Source: Fraunhofer ISE "Study on Levelized Cost of Electricity from Renewable Energies" 2024/2026, supplemented with own estimates.

LCOE Sensitivity

Which parameters have the strongest impact on LCOE?

Parameter	LCOE Sensitivity
Full-load hours ±10%	±10% LCOE (inverse)
CAPEX ±10%	±6–8% LCOE
OPEX ±10%	±2–4% LCOE
WACC 4% vs. 6%	±13% LCOE
Lifetime 20 yrs vs. 25 yrs	−10% LCOE

Wind resource is the single most important lever — hence the critical importance of thorough site selection and wind measurement. CAPEX ranks second, OPEX third. Financing costs are often underestimated — a 1 percentage point reduction in WACC lowers LCOE by approximately 6–8%.

LCOE technology comparison 2026: Onshore wind 40–95 EUR/MWh, Offshore 50–85, Solar ground-mounted 40–70, Solar rooftop 60–110, Gas 80–130, Coal 100–160, Nuclear 110–200. Sensitivity: WACC ±13%, full-load hours ±10%, CAPEX ±7%, lifetime −10%, OPEX ±3%

LCOE technology comparison and sensitivity analysis — onshore wind in context

LCOE vs. EEG Market Premium

The EEG auction ceiling value for 2026 is 7.35 ct/kWh = 73.50 €/MWh. A project with an LCOE of 65 €/MWh and an awarded bid at 72 €/MWh has a margin of approximately 7 €/MWh — given an annual yield of 18 GWh, that translates to 126,000 €/a cash flow after all costs. This is sufficient to provide a return on equity over 20 years.

Bankable LCOE Calculation?

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Frequently Asked Questions

What is the difference between LCOE and the EEG reference value?

LCOE represents the cost perspective (what does production cost). The EEG reference value ("anzulegender Wert") is the bidder-specific remuneration rate (what the operator receives). For a project to be viable: EEG reference value > LCOE.

Are subsidies included in the LCOE?

By standard LCOE definition: no subsidies are included. The "subsidised LCOE" (LCOE net of subsidies) is a variant calculation. For honest comparability across technologies, the pure LCOE is used.

What does the decommissioning reserve add to the LCOE?

Typically 0.5–1.5 €/MWh — the reserve is annualised over the project lifetime.