The Actual Levelized Cost Of Energy
17 hours ago
Guest Post By Willis Eschenbach
A company named Lazard puts out an annual report on something called the “Levelized Cost Of Energy” (LCOE). Here’s the April 2023 version. The LCOE estimates the total capital, operations, and maintenance costs for new electric power plants coming into service. People use the Lazard LCOE all the time to claim that renewable electricity sources are now cheaper than fossil fuel electricity. However, the Lazard data has a problem—it doesn’t include the cost of backup and other costs for renewable energy. These costs fall into four groups: backup costs, balancing costs, grid connection costs, and grid reinforcement/extension costs.
A few days ago, I posted the following tweet:
I am SOOO tired of people using the Lazard’s Levelized Cost of Energy to directly compare say solar vs gas or wind vs coal.
The Lazard folks themselves say (emphasis mine)
“Direct comparisons to “competing” renewable energy generation technologies must take into account issues such as dispatch characteristics (e.g., baseload and/or dispatchable intermediate capacity vs. those of peaking or intermittent technologies).”
It’s not optional, so unless you’re taking those issues into account, you are LYING ABOUT RENEWABLES.
w.
Fortunately for me, a user yclept @Roadshow11235 gave me a link to something I’d never seen, an analysis of those very costs. So let me lay them out for you.
I’ll start with the original Lazard data.
https://wattsupwiththat.com/2023/06/02/the-actual-levelized-cost-of-energy/
