James DiLellio Co-Authors Study Introducing Improved Metric for Sustainable Energy Costs

Dr. James DiLellio, professor of decision sciences at Pepperdine Graziadio, has co-authored a new article in the Open-Access Journal Sustainability introducing a novel method for evaluating the true costs of various energy technologies. The research challenges one of the industry’s most commonly used benchmarks—the Levelised Cost of Energy (LCOE)—and proposes an alternative: the Sustained Cost of Energy (SCOE).

While widely used in policy circles, LCOE struggles to offer a fair comparison across technologies with differing lifespans and investment horizons. Using UK government data and independent sources, the researchers examined a broad mix of energy sources, including natural gas, hydrogen, offshore wind, solar, and nuclear. Their analysis shows that LCOE may favor shorter-lived technologies, underestimating the long-term value of more durable systems.

To address these limitations, the authors applied three metrics: LCOE, internal rate of return (IRR), and the newly developed SCOE. Unlike LCOE, SCOE evaluates costs over a standardized operational timeline, providing a more balanced view, especially for long-term investments like nuclear and tidal range power. The study recommends using all three tools together for more comprehensive policy guidance and calls for standardized methodologies and better data validation to ensure fair comparisons.

As the global community pushes toward net-zero emissions, the researchers argue that improved evaluation methods are vital for guiding policy, managing costs, and building a more sustainable energy future.

Read the full article here.