Final answer:
The Levelized Cost is the cost per unit of electricity generated over the lifetime of an energy project, after accounting for all costs including initial investment, operation, and maintenance.
Step-by-step explanation:
The Levelized Cost of an energy project is described as (b) the cost per unit of electricity generated. It is a calculated measure of the lifetime costs divided by energy production, incorporating the costs of building, operating, financing, and maintaining the power plant computed over its expected output throughout its lifespan. The goal of the Levelized Cost is to compare different methods of electricity generation on a consistent basis.
To illustrate with an example, if a nuclear plant is built for $10 billion and operates for 50 years at an operating cost of $100 million per year, and the plant delivers power at a steady rate of 1 GW, one would first calculate the total cost, which includes the initial investment plus the total operating costs over the 50 years. Then, the total electricity generated over that period is calculated using the formula E = Pt, where E is the energy produced, P is the power rating, and t is the operating time. By dividing the total cost by the total electricity generated (expressed in kWh), you would obtain the Levelized Cost of electricity in dollars per kWh.