A new study by Lazard reveals growing competitiveness
The latest analysis performed by Lazard in his "Levelized Cost of Energy Analysis” (LCOE 11.0) confirms a drop in costs for the generation of energy from alternative sources, especially by “utility scales” (i.e. large parks) of solar or wind generation.
George Bilicic, vice president and global head of Lazard's Power, Energy and Infrastructure division said, “The growth in the cost competitiveness of some alternative energy technologies reflects several factors, including declining financing and projects on the one hand and the improvement of the industry's skills and competition on the other”.
“The next frontier – he added Jonathan Mir, head of Lazard's North American Power Division – is in the conservation of energy, an area in which innovations and falling costs are expected which should lead to a further development of renewables and therefore to a greater demand for storage systems”.
The study shows that total levelized energy costs for utility-scale solar farms and onshore wind decreased by about 6% last year. In some scenarios, the life-cycle costs of renewable energy-based projects have fallen below the simple operating costs of traditional generation technologies such as coal or nuclear.
There are clearly many factors to consider, from the solar plant technology employed to geographic location (which clearly implies different levels of insolation and output). From a graph of the study, which has the North American market as a reference but reflects global trends, we learn that in 2017 the average cost ofsolar power (for large plants) showed average costs leveled by $50 a Mwh went below i $60 combined cycle gas, under i $102 Coal and 148 dollars of nuclear power.
These are clearly production costs calculated for industrial parks, while those connected, for example to plants on the roofs of residential buildings, appear much higher and vary between 187 and 319 dollars per MWh.
In any case, the dynamics described necessarily appear to herald important innovations for the global energy industry and could fuel further development of renewables
