Here is the latest report from Lazard comparing the cost of producing electricity from fossil fuels versus renewable energy sources. The conclusion is that onshore wind is currently the cheapest energy source when taking a lifetime cost and lifetime production analysis.
See report below.
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Lazard says fossil fuel costs double that of utility-scale solar
The levelized cost of electricity (LCOE) for solar has fallen to between $29/MWh and $92/MWh, according to a new report from Lazard.
JUNE 12, 2024
RYAN KENNEDY
Image: Lazard
Lazard has released a report analyzing LCOE, a critical measure of cost-efficiency of generation sources across technology types. The report found that onshore wind and utility-scale solar have the lowest LCOE by a large margin.
LCOE measures lifetime costs divided by energy production and calculates the present value of the total cost of building and operating a power plant over an assumed lifetime.
“Despite high end LCOE declines for selected renewable energy technologies, the low ends of our LCOE have increased for the first time ever, driven by the persistence of certain cost pressures (e.g., high interest rates, etc.),” said Lazard. “These two phenomena result in tighter LCOE ranges (offsetting the significant range expansion observed last year) and relatively stable LCOE averages year-over-year.”
Onshore wind ranked as the lowest source of new-build electricity generation, ranging from $27/MWh to $73/MWh. Utility-scale solar was a close second, ranging $29/MWh to $92/MWh.
Utility-scale solar has had the most aggressive cost reduction curve of all technologies, falling about 83% since 2009, when new-build solar generation had an LCOE of over $350/MWh.
Image: Lazard
Solar at the utility-scale is far lower in cost than the LCOE of coal, the least-expensive source of fossil fuel generation.
Coal LCOE ranges $69/MWh to $169/MWh, making it nearly double the average LCOE of utility-scale solar assets.
Meanwhile, natural gas peaker plants are highly inefficient in LCOE, ranging from $110/MWh to $228/MWh. Nuclear energy had the highest utility-scale LCOE with an average of $182/MWh.
