How regulators and utilities use cost metrics

The levelized cost of electricity (LCOE) is a widely-cited metric used to compare the cost of energy from different power sources—but it’s often misunderstood and misused. This week, host Heather Horn is joined by Karl Hausker, Senior Fellow at the World Resources Institute’s Polsky Center for the Global Energy Transition, to cover what LCOE really measures, why it’s not the full story, and how it fits into the broader effort to decarbonize the power sector. Together, they explore what companies and regulators should consider when evaluating clean energy investments and transition plans.

In this episode, we discuss:

• 5:23 – What LCOE measures—and what it misses
• 11:29 – Why LCOE shouldn’t drive policy decisions
• 25:20 – Implications for companies and scope 2 emissions
• 31:41 – The future energy mix

As referenced in this episode, explore Karl Hausker’s companion slides for more information.

At the time of recording, the GHG Protocol exposure drafts on scope 2 had not yet been released. Check out GHG Protocol announces Scope 2 Public Consultation for more information.

Looking for more on GHG and sustainability reporting?

• CARB releases draft emissions reporting template
• Sustainability now: Inside the GHG Protocol’s scope 3 update
• PwC’s Sustainability reporting guide

About our guest

Dr. Karl Hausker is a Senior Fellow in the WRI Polsky Center for the Global Energy Transition. He leads analysis and modeling of climate mitigation, electricity market design, and the social cost of carbon. He testifies before Congress, lectures widely on deep decarbonization, and served as an expert reviewer for Sixth Assessment Report of the Intergovernmental Panel on Climate Change.

About our host

Heather Horn is the PwC National Office Sustainability & Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com

Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.