Technology:

Comparing the Costs of Renewable and Conventional Energy Sources (Energy Innovation)

You can’t get too far in a discussion about the nation’s electric power sector without running into the question of costs. How do renewable sources, such as solar and wind, stack up against fossil fuels, such as coal and natural gas? How much will it cost utilities and ratepayers to build—and operate—a new power plant?

Onshore wind has the lowest average levelized cost in this analysis at $59 per megawatt-hour, and geothermal power plants showing well at the top end of the list. By comparison, the lowest cost conventional technologies were gas combined cycle technologies, averaging $74 per megawatt-hour, and coal plants, averaging $109. These numbers are the average of Lazard’s low- and high-end estimates (see their study for more about their cost calculations).

Looking across the 16 technology types, the 10 alternative technologies cost an average $147 per megawatt-hour, $18 less than the conventional approaches. “Certain Alternative Energy generation technologies,” Lazard wrote, “are cost-competitive with conventional generational technologies under some scenarios.”

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