From pv magazine Global
Solar and wind remain the most competitive sources of electricity on an unsubsidized basis in the United States, despite persistent low natural gas prices, according to a new report by U.S.-based financial firm Lazard.
The report offers a comparative levelized cost of energy (LCOE) analysis for various generation technologies on a $/MWh basis, excluding US federal tax subsidies, fuel prices, carbon pricing, and cost of capital.
In a base comparison, utility-scale solar and wind have the lowest LCOE of all sources. Utility-scale solar ranges from $0.038/kWh to $0.217/kWh, while onshore wind registers the lowest possible LCOE over the narrowest range, from $0.037/kWh to $0.086/kWh. Offshore wind’s LCOE ranges between $72/MWh and $140/MWh.
For comparison, under the same criteria, gas peaking costs $0.149/kWh to $0.251/kWh, nuclear is $0.141/kWh to $0.220/kWh, coal is $0.071/kWh to $0.173/kWh, and gas combined cycle is $0.048/kWh to $0.109/kWh, according to Lazard.
Compared to 2024, the LCOE of utility-scale solar dropped by 4%, while that of onshore and offshore wind increased by 55% and 23%, respectively. Nuclear power saw its LCOE drop 1%, and combined cycle gas rose 3%.
“Despite facing macro challenges and headwinds, utility-scale solar and onshore wind remain the most cost-effective forms of new-build energy generation on an unsubsidized basis,” the report said. “As such, renewable energy will continue to play a key role in the buildout of new power generation in the US as the lowest-cost and quickest-to-deploy generation.”
The analysts also reported that the levelized cost of storage (LCOS) dropped significantly compared to last year for both in-front-of-the-meter and behind-the-meter applications.
The LCOS for a 100 MW utility-scale standalone battery with two hours of storage is estimated at between $0.081/kWh and $0.174/kWh, while that of an identical facility with four hours of storage is between $0.145/kWh and $0.319/kWh.
“This year’s report shows sharp declines for battery energy storage systems across hybrid and standalone storage projects,” said Lazard. “Key drivers of such results include both market dynamics such as lower-than-expected electric vehicle demand and the resulting oversupply of cells and technological advancements such as increased cell capacity and energy density.”
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