Unsubsidized utility-scale solar and onshore wind technologies remain the most cost-competitive sources of new-build electricity generation in the US, for the 10th consecutive year, according to the latest Lazard analysis.
In its 18th annual report analyzing Levelized Cost of Energy+ (LCOE+), financial advisory and asset management firm Lazard says the average LCOE of utility-scale solar PV ranges from $38/MWh to $78/MWh and $37/MWh to $86/MWh for onshore wind.
At utility scale, solar PV and storage projects carry an LCOE of between $50/MWh and $131/MWh, while the range varies between $44/MWh and $123/MWh for onshore wind and storage projects. This is despite renewables facing macro challenges and headwinds.
In comparison, the LCOE of a gas combined cycle varies from $48/MWh to $109/MWh. The range is $71/MWh to $173/MWh for coal power generation projects, and $149/MWh to $251/MWh for gas peaking.
According to the analysts, “While persistent low gas prices, high energy demand and increasing renewable LCOEs have resulted in the continued cost competitiveness of operating existing baseload gas generation, the cost of building a new combined cycle gas turbine has reached a 10-year high.”
They add, “As such, renewable energy will continue to play a key role in the buildout of new power generation in the U.S. as the lowest-cost and quickest-to-deploy generation.”
According to Lazard’s levelized cost of storage 10 (LCOS 10), there were sharp declines in storage systems as well, both for hybrid and standalone storage projects.
For a utility-scale, standalone 100 MW/2-hour front-of-the-meter storage project, the LCOS ranges from $129/MWh to $277/MWh. With Investment Tax Credit (ITC), the LCOS for a similar project is $95/MWh to $209/MWh.
“This year’s report shows sharp declines for battery energy storage systems across hybrid and standalone storage projects. Key drivers of such results include both market dynamics (e.g., lower-than-expected EV demand and the resulting oversupply of cells) and technological advancements (e.g., increased cell capacity and energy density),” reads the Lazard report, which is available for free download on its website.
