{"id":290960,"date":"2023-12-12T08:30:53","date_gmt":"2023-12-12T07:30:53","guid":{"rendered":"https:\/\/climatescience.press\/?p=290960"},"modified":"2023-12-12T08:30:55","modified_gmt":"2023-12-12T07:30:55","slug":"lazards-lcoe","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=290960","title":{"rendered":"Lazard\u2019s LCOE"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From Watts Up With That?<\/a><\/p>\n\n\n\n

By Andy May<\/p>\n\n\n\n

Lazard\u2019s levelized cost of energy (LCOE<\/a>) is cited on the internet all the time as the source for \u201csolar and wind are cheaper than fossil fuels.\u201d They don\u2019t really mean \u201cenergy,\u201d they mean \u201celectricity.\u201d The world consumed only 18% of its energy in 2021<\/a> as electricity, so LCOE is just the cost of 18% of our total consumption, a fact often lost in these discussions.<\/p>\n\n\n\n

However, just a quick look at their data shows that solar and wind are clearly not cheaper. Even within their April 2023 report they are not consistent in their numbers. To make matters worse, they bury critical details in the fine print and do not define their terms. I doubt some of their numbers, but for this discussion I only use the numbers in their report.<\/p>\n\n\n\n

Figure 1 is based upon\u00a0Lazard\u2019s chart<\/a>\u00a0on page 8. This is the chart where they try and include the costs of backing up the intermittent nature of solar and wind power generation. The chart is complicated and poorly explained, so I\u2019ve added some clarifying annotations. Solar does not work at night or on cloudy days and wind obviously doesn\u2019t work if there is no wind, some sort of backup (\u201cfirming\u201d) is needed for when the Sun isn\u2019t shining, and wind isn\u2019t blowing.<\/p>\n\n\n\n

\"\"
Figure 1. Lazard\u2019s page 8 with clarifying comments. To view full size, click\u00a0here<\/a>.<\/figcaption><\/figure>\n\n\n\n

They examine four scenarios, labeled \u201cMISO,\u201d \u201cCAISO,\u201d \u201cSPP,\u201d and \u201cPJM.\u201d They do not explain what these cases are, but I assume they are from specific electric utility companies. The graph shows the cost of Lazard\u2019s unsubsidized LCOE in black, their subsidized cost is in light blue, and the backup or \u201cfirming\u201d cost is in beige. They do not specify the backup duration for natural gas, but the specified outage time planned for the Lithium-Ion battery case (CAISO) is only four hours. Windless periods are usually at night and in the winter, when it is dark over 12 hours a day, so I have no idea where \u201c4 hours\u201d came from.<\/p>\n\n\n\n

The units on the chart are $\/MWh (U.S. dollars per Megawatt-hour). The units for the assumed backup cases in the fine print (see note #1) are kW-mo (kilowatt-months). This is probably to confuse the reader; I can think of no other reason. There are 730 hours in a month and 1,000 kW in a MW, so the conversion is x730 and then divide by a thousand. The figure does the conversion for you.<\/p>\n\n\n\n

Notice the Lazard figure specifies a range of LCOE from $39-$101 per Megawatt-hour for Natural Gas Combined Cycle power generation. Yet, in the fine print, they specify that the \u201cNatural Gas CT\u201d backup assumptions for solar and wind (used in MISO, SPP, and PJM) are from $6 to $7.45 per Megawatt-hour<\/em>. They do not define \u201cNatural Gas CT,\u201d but I interpret it as conventional natural gas power generation. Conventional natural gas plants are cheaper than combined cycle, but less efficient.<\/p>\n\n\n\n

How is it that the cost of \u201cNatural Gas CT\u201d is a sixth or less of the cost of natural gas LCOE, when used to back up solar and wind? Can anyone clarify this? I\u2019m no expert, but this looks like disinformation to me. In figure 1 the Natural Gas CT cost, only when used to backup solar and wind<\/em>, is shown as a red line. It is much, much cheaper than the solar and wind costs provided, whether they are subsidized or not. Since wintertime is when solar and wind fail most often, and it can be for days at a time, batteries are clearly ineffective as a backup. Besides batteries fail most often in wintertime also, as anyone who drives a car knows. If we are using this magical and mysterious \u201cNatural Gas CT\u201d power plant at $6\/MWh to back up much more expensive solar and wind, why bother with the solar and wind?<\/p>\n\n\n\n

For a more in-depth look at the relative costs of solar, wind, coal, natural gas and nuclear see\u00a0here<\/a>.<\/em><\/p>\n\n\n\n

<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Lazard\u2019s levelized cost of energy (LCOE) is cited on the internet all the time as the source for \u201csolar and wind are cheaper than fossil fuels.\u201d They don\u2019t really mean \u201cenergy,\u201d they mean \u201celectricity.\u201d <\/p>\n","protected":false},"author":121246920,"featured_media":290965,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"Lazard\u2019s levelized cost of energy (LCOE) is cited on the internet all the time as the source for \u201csolar and wind are cheaper than fossil fuels.\u201d They don\u2019t really mean \u201cenergy,\u201d they mean \u201celectricity.\u201d ","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691818228,691825242,691820587,691825243],"class_list":{"0":"post-290960","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-fossil-fuels","9":"tag-lazards-levelized-cost-of-energy-lcoe","10":"tag-solar-and-wind","11":"tag-subsidized-cost","13":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1752%2C657&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1dGU","jetpack-related-posts":[{"id":260510,"url":"https:\/\/climatescience.press\/?p=260510","url_meta":{"origin":290960,"position":0},"title":"The Actual Levelized Cost Of Energy","author":"uwe.roland.gross","date":"03\/06\/2023","format":false,"excerpt":"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.","rel":"","context":"In \"Levelized Cost Of Energy\"","block_context":{"text":"Levelized Cost Of Energy","link":"https:\/\/climatescience.press\/?tag=levelized-cost-of-energy"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/06\/image-79.png?fit=1200%2C864&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/06\/image-79.png?fit=1200%2C864&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/06\/image-79.png?fit=1200%2C864&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/06\/image-79.png?fit=1200%2C864&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/06\/image-79.png?fit=1200%2C864&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":292010,"url":"https:\/\/climatescience.press\/?p=292010","url_meta":{"origin":290960,"position":1},"title":"Climate Advocacy: Incompetence Versus Intentional Fraud — Lazard Edition","author":"uwe.roland.gross","date":"20\/12\/2023","format":false,"excerpt":"Or do they really know that, and they are just hoping to sell a few hundreds of billions of dollars worth of wind turbines and solar panels before the stupid politicians and investors figure out the scam?","rel":"","context":"In \"cost of energy\"","block_context":{"text":"cost of energy","link":"https:\/\/climatescience.press\/?tag=cost-of-energy"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/OIG-2023-08-23T133243.948.jpeg?fit=1024%2C1024&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/OIG-2023-08-23T133243.948.jpeg?fit=1024%2C1024&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/OIG-2023-08-23T133243.948.jpeg?fit=1024%2C1024&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/OIG-2023-08-23T133243.948.jpeg?fit=1024%2C1024&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":392437,"url":"https:\/\/climatescience.press\/?p=392437","url_meta":{"origin":290960,"position":2},"title":"The Ongoing Fiction of Cheap Wind and Solar","author":"uwe.roland.gross","date":"02\/08\/2025","format":false,"excerpt":"Those claiming that wind and solar energy are cheaper than fossil fuels should be writing scripts for science fiction dramas.","rel":"","context":"In \"fossil fuels\"","block_context":{"text":"fossil fuels","link":"https:\/\/climatescience.press\/?tag=fossil-fuels"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/0AQNHl9AKaUujnp_oKefu2SSDZXqj5kkKnpsg2QUx1mG9gJiWTdguYjXMjVIa4vDgyWpjb0eadWQTVMvjaIrrOSiDo6A8U0tP3foiGqRpDmQ-EIlH29q2AYMajvpHZF9wJy_ZLSIM_tJ0TKAcwD65T_m0BEvRig-1.jpeg?fit=1200%2C1200&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":393616,"url":"https:\/\/climatescience.press\/?p=393616","url_meta":{"origin":290960,"position":3},"title":"Why Is Cheap Electricity So D@mn Expensive?","author":"uwe.roland.gross","date":"07\/08\/2025","format":false,"excerpt":"We\u2019ve been told over and over by very serious people that wind and solar are far cheaper than natural gas and coal \u2026 and yet the more renewables we add to the grid, the more our electricity bills keep going up and up. Ever wonder why that is?","rel":"","context":"In \"battery storage\"","block_context":{"text":"battery storage","link":"https:\/\/climatescience.press\/?tag=battery-storage"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/AQMrzHkmhVGQSTaRUf6zIxOj_Z4sTfW3rvfA_VdHsdwKjZ3aqYM86rSVj8oJFHhPQOBQ10BPWSZA6hqp2Lif1gYX2OyhXE2nkRkGMGxeCD_PeYd4WUjV0g8XY59AVIgdBNE4qLMVOj_MsG3dCyJlZjy5pNgTDA-1.jpeg?fit=1200%2C1200&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/AQMrzHkmhVGQSTaRUf6zIxOj_Z4sTfW3rvfA_VdHsdwKjZ3aqYM86rSVj8oJFHhPQOBQ10BPWSZA6hqp2Lif1gYX2OyhXE2nkRkGMGxeCD_PeYd4WUjV0g8XY59AVIgdBNE4qLMVOj_MsG3dCyJlZjy5pNgTDA-1.jpeg?fit=1200%2C1200&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/AQMrzHkmhVGQSTaRUf6zIxOj_Z4sTfW3rvfA_VdHsdwKjZ3aqYM86rSVj8oJFHhPQOBQ10BPWSZA6hqp2Lif1gYX2OyhXE2nkRkGMGxeCD_PeYd4WUjV0g8XY59AVIgdBNE4qLMVOj_MsG3dCyJlZjy5pNgTDA-1.jpeg?fit=1200%2C1200&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/AQMrzHkmhVGQSTaRUf6zIxOj_Z4sTfW3rvfA_VdHsdwKjZ3aqYM86rSVj8oJFHhPQOBQ10BPWSZA6hqp2Lif1gYX2OyhXE2nkRkGMGxeCD_PeYd4WUjV0g8XY59AVIgdBNE4qLMVOj_MsG3dCyJlZjy5pNgTDA-1.jpeg?fit=1200%2C1200&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/08\/AQMrzHkmhVGQSTaRUf6zIxOj_Z4sTfW3rvfA_VdHsdwKjZ3aqYM86rSVj8oJFHhPQOBQ10BPWSZA6hqp2Lif1gYX2OyhXE2nkRkGMGxeCD_PeYd4WUjV0g8XY59AVIgdBNE4qLMVOj_MsG3dCyJlZjy5pNgTDA-1.jpeg?fit=1200%2C1200&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":420474,"url":"https:\/\/climatescience.press\/?p=420474","url_meta":{"origin":290960,"position":4},"title":"\u201cShould LCOE finally be retired from energy policy?\u201d","author":"uwe.roland.gross","date":"08\/01\/2026","format":false,"excerpt":"The Levelized Cost of Energy (LCOE) calculates the average net present cost of electricity generation over a plant's lifetime, divided by the total energy produced (in $\/MWh). It provides a straightforward way to compare the direct costs of different technologies, such as capital, operations, maintenance, and fuel. 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From The MANHATTAN CONTRARIAN Francis Menton A key claim of the green energy movement has long been that the intermittent \u201crenewables\u201d \u2014 wind and solar \u2014 provide the cheapest form of energy. Therefore, the advocates say, just\u2026","rel":"","context":"In \"energy future\"","block_context":{"text":"energy future","link":"https:\/\/climatescience.press\/?tag=energy-future"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/10\/0pri75821100-1.webp?fit=1200%2C600&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/10\/0pri75821100-1.webp?fit=1200%2C600&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/10\/0pri75821100-1.webp?fit=1200%2C600&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/10\/0pri75821100-1.webp?fit=1200%2C600&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/10\/0pri75821100-1.webp?fit=1200%2C600&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/290960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/users\/121246920"}],"replies":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=290960"}],"version-history":[{"count":3,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/290960\/revisions"}],"predecessor-version":[{"id":290966,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/290960\/revisions\/290966"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/290965"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=290960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=290960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=290960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}