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Overnight cost is the cost of a construction project if no interest was incurred during construction, as if the project was completed "overnight." This concept is used for providing a simplistic cost comparison between power plant projects or technologies, through a ratio with the maximum power the plant can deliver.


Power generation

The overnight capital cost is a term used in the power generation industry. It is usually computed by dividing the overnight cost of building the plant by the maximum instantaneous power the plant can deliver. This overnight capital cost does not take into account: * the life span of a plant or its key components, * the
capacity factor The net capacity factor is the unitless ratio of actual electrical energy output over a given period of time to the theoretical maximum electrical energy output over that period. The theoretical maximum energy output of a given installation is def ...
, i.e. the ratio between the effective mean power (actually delivered through the year) and the maximum power (maybe reached only a few hours per year) which typically varies from 10% (e.g. solar plants in Germany) to 90% (e.g. nuclear plants in USA) due to various causes : natural such as sun, clouds, wind or waterfall, technological such as maintenancy constraints, financial such as fuel cost vs. electricity wholesale price, legal such as pollution reduction, * the financing costs or escalation, noticeably the discount due to some interest rate or the comparative return of capital in other industries. Hence : * the overnight capital cost is not an actual estimate of construction cost, * investors in the energy industry typically look rather to the
levelized cost of energy The levelized cost of electricity (LCOE), or levelized cost of energy, is a measure of the average net present cost of electricity generation for a generator over its lifetime. It is used for investment planning and to compare different methods ...
(LCOE) for comparing generation projects or technologies (e.g.
solar power Solar power is the conversion of energy from sunlight into electricity, either directly using photovoltaics (PV) or indirectly using concentrated solar power. Photovoltaic cells convert light into an electric current using the photovolta ...
,
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
) in the long term, as it includes ongoing fuel, maintenance, operation and financial costs. The U.S. Department of Energy tracks and makes publicly availabl
levelized cost of energy figures for competing technologies
These figures will vary substantially in other countries due to different energy policies and domestic energy sources.


See also

*
Economics of new nuclear power plants Nuclear power construction costs have varied significantly across the world and in time. Large and rapid increases in cost occurred during the 1970s, especially in the United States. Recent cost trends in countries such as Japan and Korea have ...


References

* Costs Energy production Energy economics Energy infrastructure {{Econ-stub