Levelized costs don’t tell the whole story about competitiveness. But they provide a helpful guide for where clean energy is headed.
If using the common levelized cost of energy (LCOE) metric, renewables are actually starting to rival fossil fuels and nuclear on an unsubsidized basis, according to the latest calculations from the financial advisory firm Lazard.
In the newest version of its comprehensive LCOE analysis of energy technologies, Lazard finds that a wide variety of renewables are, in some cases, directly competitive with coal, gas and nuclear without federal tax support.
The cost profiles of renewables and fossil fuels are very different. Coal and natural gas plants have lower upfront capital costs, but are sensitive to fuel prices; technologies like wind, solar and geothermal have no fuel costs, but are far more capital-intensive to build upfront, making them sensitive to financing costs.
