The invention discloses a power grid equipment life cycle cost calculation method, which comprises a step of building a power grid equipment life cycle constitution model and a step of forming a peak shaving gap cost analysis and calculation method, wherein peak shaving gap cost analysis and calculation method further comprises the steps of dividing the life cycle cost into one-time investment cost and operation and maintenance cost, determining operation and maintenance cost best-fit distribution by adopting a grey system theory analysis method so as to acquire an operation and maintenance cost distribution relation, synthesizing the two parts of cost by combining a time allocation based one-time investment cost calculation method and taking the lowest LCC (Life Cycle Cost) as a target so as to form the power equipment life cycle cost analysis and calculation method. The power grid equipment life cycle cost calculation method achieves the purposes of reducing resource consumption and realizing effective control for the cost.