Cost per MWh
Total production cost per megawatt-hour of energy generated
What is Cost per MWh?
Cost per megawatt hour (MWh) is the average cost of generating each MWh of energy. It shows how cheaply an energy producer can generate power.
It is central to competitiveness, and lets different generating plants and technologies be compared.
How this KPI is measured
- Function
- Finance
- Sub-function
- Cost Management
- Industry
- Energy & Utilities
- Type
- Lagging
- Impact
- Financial control
- Unit
- $ per MWh
- Measurement frequency
- Monthly
- Formula
- Total generation costs / Total energy produced (MWh)
How to calculate it
Divide total generation costs by total energy produced in MWh.
For example, if a plant spent 40,000,000 to generate 800,000 MWh, the cost is 50 per MWh.
Include fuel, operations, maintenance and, where relevant, capital and carbon costs, and be clear about what is included.
Where it is used
Comparing plants and technologies
Find the lowest cost sources.
Pricing and bidding
Set prices with margin.
Planning investment
Choose new capacity.
How to improve it
Tips and common mistakes
- Be clear whether capital costs are included.
- Compare on the same basis.
- Availability has a big effect on the unit cost.
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