A comparison of the economics of different technologies for electricity production is at the heart of the new annual report of the Lazard Investment Bank. Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 13.0) shows that as the cost of renewable energy continues to decline, certain technologies (e.g., onshore wind and utility-scale solar), which became cost-competitive with conventional generation several years ago on a new-build basis, continue to maintain competitiveness with the marginal cost of existing conventional generation technologies. While the reductions in costs continue, their rate of decline has slowed, especially for onshore wind. Costs for utility-scale solar have been falling more rapidly (about 13 percent per year) compared to onshore wind (about 7 percent per year) over the past five years.
According to the report, the value of solar energy is $ 32- $ 44 per MWh, which is below last year`s figures. The value of coal energy is estimated in the range of 66 – 152 dollars per MWh, and nuclear energy between 118-192 dollars per MWh. This means that, according to Lazard`s calculations, the most expensive new solar or wind power plant (upper limit of the LCOE interval for sun and wind – $ 54 per MWh) is cheaper than the cheapest new coal one (lower limit of the LCOE interval for coal – $ 66 per MWh). The lower LCOE limit for high-efficiency steam power plants ($ 44 per MWh) corresponds to the upper limit for solar power. The calculations in the report are based on US data.
Lazard has conducted this analysis comparing the levelized cost of energy (LCOE) for various conventional and renewable energy generation technologies in order to understand which renewable energy generation technologies may be cost-competitive with conventional generation technologies, either now or in the future, and under various operating assumptions.
The report is available at: https://www.solarempower.com/news/levelized-cost-energy-storage/
Source: Lazard