Commentary

This graph represents the total physical costs of electricity generation combining both fuel costs and capital costs. In the Business As Usual scenario the shift to other more efficient forms of thermal generation such as combined cycle plant that counteract the rise in fuel prices up to about 2030 when the oil peak occurs but then again.

Renewable energy sources are seen as a capital cost only since the fuel costs are free once these sources have been installed. Clearly the switch to renewable energy sources in the Enlightened Transition and Fair Shares scenarios have an edge over Business As Usual policies in the face of rising fossil fuel prices and both these scenarios follow a similar trend. One reason why the cost drops zero around 2048 in the Fair Shares scenario is that since the economy has a relatively low energy intensity the installed renewable energy sources up to that point are supplying all the energy needs and therefore no new generators are being installed. The fuel costs of the operating renewable generators are already zero. However calculation accuracy of the model that far into the future is limited at the moment.

Localisation results in oscillating costs in electricity generation as the economy booms and contracts resulting in a slower shift from conventional thermal plant for more efficient combined cycle plant. Like the Business as Usual scenario the costs rise again after 2030.