{"id":292010,"date":"2023-12-20T13:46:32","date_gmt":"2023-12-20T12:46:32","guid":{"rendered":"https:\/\/climatescience.press\/?p=292010"},"modified":"2023-12-20T13:46:38","modified_gmt":"2023-12-20T12:46:38","slug":"climate-advocacy-incompetence-versus-intentional-fraud-lazard-edition","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=292010","title":{"rendered":"Climate Advocacy: Incompetence Versus Intentional Fraud — Lazard Edition"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

From The MANHATTAN CONTRARIAN<\/a><\/p>\n\n\n\n

Francis Menton<\/a><\/p>\n\n\n\n

My last post, on December 14<\/a>, asked readers, when considering climate advocacy journalism and reports promoting wind- or solar-generated energy, to ask themselves whether the author is merely incompetent versus perhaps committing intentional fraud. The post focused on a particular piece that had been published in November in euronews.green, byline Lauren Crosby Medlicott<\/a>. In that piece, Ms. Medlicott had egregiously cherrypicked some operating data from the Spanish El Hierro Island wind\/storage electricity system to make it appear that that system is a success, when in fact it is a disastrous failure. Could this really have been mere incompetence on her part, or was Ms. Medlicott intentionally seeking to deceive her readers?<\/p>\n\n\n\n

Ms. Medlicott\u2019s piece was so appalling that I was unable just to let it pass. On the other hand, to be honest, Ms. Medlicott is a relatively small fish in the climate advocacy game. Are the larger fish any more honest?<\/p>\n\n\n\n

Among the big players in this game, one that stands out is the investment bank Lazard. As an investment bank, Lazard makes its money \u2014 in its case quite big money \u2014 by causing deals to happen between investors and project developers. Investment banks often promote themselves by issuing reports on conditions for investment in various economic sectors. In Lazard\u2019s case, back around 2008<\/a>, they decided to become the gurus of green energy investing by issuing annual reports on what they call the Levelized Cost of Energy, or LCOE. They have continued to issue the LCOE reports annually since then, so I\u2019m gathering that this must be quite a lucrative business. Here is a link for the most recent Lazard LCOE Report<\/a>, which came out earlier this year in April 2023.<\/p>\n\n\n\n

The Lazard LCOE Reports are famous for their repeated conclusion that wind turbines and solar panels have become the cheapest sources for generation of electricity. When you read someone in climate advocacy journalism reciting that talking point, most often the source of the point is one of these Lazard reports. In a post back in March 2019, title \u201cWhy Do Renewable Energy Sources Need Government Subsidies?,\u201d<\/a> I put together a sample list of half a dozen outlets citing Lazard LCOE studies for the proposition that wind and solar are the cheapest source of electricity. Those sources included, for example, the Financial Times, CBS News, Australia\u2019s governmental research arm CSIRO, Axios, Think Progress, and others.<\/p>\n\n\n\n

For the first decade or so of its LCOE reports, Lazard calculated the cost of energy from wind and solar without including any cost at all for the backup or storage needed to turn those sources into a fully-functioning 24\/7\/365 electrical grid. But somewhere in there Lazard starting adding to its reports some additional pages on what they call the Levelized Cost of Storage, or LCOS. Remarkably, after adding in the cost of storage, Lazard still seems to be coming to the conclusion that wind and solar generation are usually cheaper than generation from fossil fuels, or at the very least they are competitive. Could this possibly be right?<\/p>\n\n\n\n

The Lazard 2023 LCOE Report is presented almost entirely in the form of charts and graphs. There is very little text, and you will struggle to try to figure out what assumptions underlie the conclusions. (From the website Watt-Logic<\/a>, commenting on the 2023 Lazard LCOE report, and particularly on Lazard\u2019s calculation of the cost of \u201cfirming\u201d intermittent renewable generation with storage: \u201cIt\u2019s actually quite hard to work out what\u2019s going on here.\u201d<\/em>; from Andy May at Watts Up With That, December 11<\/a>, \u201c[T]hey bury critical details in the fine print and do not define their terms.\u201d)<\/em><\/p>\n\n\n\n

With that introduction, here is the key chart from the 2023 Lazard LCOE Report giving figures for cost of wind and solar power with \u201cfirming,\u201d supposedly compared to the cost of generating electricity from natural gas \u201cCT\u201d or natural gas \u201ccombined cycle.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

By all means take your time to try to digest all of that. If you go to the Lazard Report for assistance, you will not find any useful text beyond what is there in the footnotes at the bottom of the chart. I read the chart as putting the \u201clevelized cost\u201d of \u201cfirming\u201d intermittent wind and solar generation at as little as $23\/MWh in the Midwest, up to a maximum of $98\/MWh in California. Add this cost of \u201cfirming\u201d to the \u201cunsubsidized\u201d cost of wind and solar generation, and you get a total for \u201cfirmed\u201d power from wind and solar that is mostly within the range (and often toward the lower end) of costs for generation from combined cycle natural gas plants, and at most toward the low end of the range of costs for generation from natural gas \u201cpeaker\u201d plants. In other words, while wind and solar are not proven to always be \u201cthe cheapest\u201d after including the costs of \u201cfirming,\u201d they are generally toward the cheaper end of the range of costs from natural gas generation, and certainly not out of the range of affordability.<\/p>\n\n\n\n

But wait a minute. Where did they get these costs of \u201cfirming\u201d? These costs appear ridiculously low compared to amounts that I find in my December 2022 energy storage Report<\/a>. Study those fine print footnotes all you want, and I do not think you are going to find the answer. Can we find anything anywhere else in this Lazard document to help us understand the difference?<\/p>\n\n\n\n

After spending some time trying to figure this out, the best I come up with is this chart from page 17 of the Lazard LCOE Report:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

This appears to be the set of assumptions they apply for how energy storage will be used to \u201cfirm\u201d the intermittent wind and solar generation. Let\u2019s pluck a few key numbers out of this chart:<\/p>\n\n\n\n

    \n
  • In the column headed \u201cStorage Duration (Hours),\u201d we find a minimum of 1 and a maximum of 4. Four hours of duration just happens to be the norm for the capability of today\u2019s most cost-effective battery storage technology, lithium ion batteries. Unfortunately, the studies that I feature in my energy storage Report calculate that the number of hours duration of storage needed to fully \u201cfirm\u201d a system using only wind and solar generation would be at least one month (720 hours), and potentially two to three months (1440 to 2160 hours). Lazard would seem to be off by a factor of somewhere between 180 and 540 of what would be needed.<\/li>\n\n\n\n
  • Then there is a column headed \u201c90% DOD Cycles\/Day.\u201d In each case the entry is \u201c1.\u201d I interpret this to mean that whatever battery we are dealing with here is assumed to have one full charge\/discharge cycle per day. The next column tells us they are assuming 350 days per year, so therefore they are assuming that the batteries cycle 350 times per year. So the batteries can spread their costs over 350 cycles per year, or 7000 cycles in 20 years. Unfortunately, as shown in my energy storage Report, due to seasonal patterns of the wind and sun, much of the battery storage capacity needed to \u201cfirm\u201d a wind\/solar generation system will only go through one full charge and discharge cycle per year<\/em>. Thus, for this part of the storage capacity, Lazard would appear to be understating the cost of the storage by a factor of 350.<\/li>\n<\/ul>\n\n\n\n

    Am I maybe interpreting this chart incorrectly? Perhaps. The Lazard people certainly don\u2019t make it easy to figure out their assumptions. But the two issues that I have identified would be about right in their effects to explain the differences between the costs produced by Lazard, and the costs that I estimated, where the difference is about one to two orders of magnitude (that is, a factor of between 10 and 100).<\/p>\n\n\n\n

    Now, consider the question of whether cost figures in the Lazard Report are the result of rank incompetence versus intentional deception. Could the people at Lazard who produce all these fancy and complex charts and graphs really not know that 4 hour duration batteries cycling once per day are not going to come close to solving the intermittency problems of wind and solar generation? <\/p>\n\n\n\n

    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?<\/em><\/strong><\/p>\n\n\n\n

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

    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?<\/p>\n","protected":false},"author":121246920,"featured_media":292016,"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":"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?","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":[691822786,691825508,691825505,691825507,691818299,691824290],"class_list":{"0":"post-292010","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-cost-of-energy","9":"tag-incompetence","10":"tag-lazard-report","11":"tag-spanish-el-hierro-island","12":"tag-subsidies","13":"tag-wind-and-solar-energy","15":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/OIG-2023-08-23T133243.948.jpeg?fit=1024%2C1024&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1dXQ","jetpack-related-posts":[{"id":290960,"url":"https:\/\/climatescience.press\/?p=290960","url_meta":{"origin":292010,"position":0},"title":"Lazard\u2019s LCOE","author":"uwe.roland.gross","date":"12\/12\/2023","format":false,"excerpt":"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","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\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/12\/0lcoeplusherobanner-1.jpg?fit=1200%2C450&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":283294,"url":"https:\/\/climatescience.press\/?p=283294","url_meta":{"origin":292010,"position":1},"title":"Extraordinary Costs Of Green Energy Creeping Slowly Into Public Awareness","author":"uwe.roland.gross","date":"14\/10\/2023","format":false,"excerpt":"Skyrocketing electricity bills and power prices are the result of green energy policies. 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":[]},{"id":260510,"url":"https:\/\/climatescience.press\/?p=260510","url_meta":{"origin":292010,"position":2},"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":258751,"url":"https:\/\/climatescience.press\/?p=258751","url_meta":{"origin":292010,"position":3},"title":"The IEA\u2019s comedy data","author":"uwe.roland.gross","date":"23\/05\/2023","format":false,"excerpt":"From time to time, I take a look at other people\u2019s estimates of the levelised costs of renewable power, particularly offshore wind. The merchant bank Lazard has been\u00a0a source of particular amusement, their figures being so far divorced from reality as to be entirely laughable.","rel":"","context":"In \"IEA\"","block_context":{"text":"IEA","link":"https:\/\/climatescience.press\/?tag=iea"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/05\/0WhatsApp-Image-2023-05-23-at-09.59.20.jpg?fit=1200%2C632&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/05\/0WhatsApp-Image-2023-05-23-at-09.59.20.jpg?fit=1200%2C632&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/05\/0WhatsApp-Image-2023-05-23-at-09.59.20.jpg?fit=1200%2C632&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/05\/0WhatsApp-Image-2023-05-23-at-09.59.20.jpg?fit=1200%2C632&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/05\/0WhatsApp-Image-2023-05-23-at-09.59.20.jpg?fit=1200%2C632&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":252678,"url":"https:\/\/climatescience.press\/?p=252678","url_meta":{"origin":292010,"position":4},"title":"Lazard: still unreliable","author":"uwe.roland.gross","date":"13\/04\/2023","format":false,"excerpt":"The most egregious problem last time round was capex, and so it\u2019s good to see that Lazard have bumped up costs for the new edition, by 20% for their optimistic assumptions and by 40% for the pessimistic.","rel":"","context":"In \"Lazard\"","block_context":{"text":"Lazard","link":"https:\/\/climatescience.press\/?tag=lazard"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/08MW-offshore-wind-turbine.jpg?fit=1200%2C818&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/08MW-offshore-wind-turbine.jpg?fit=1200%2C818&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/08MW-offshore-wind-turbine.jpg?fit=1200%2C818&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/08MW-offshore-wind-turbine.jpg?fit=1200%2C818&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/04\/08MW-offshore-wind-turbine.jpg?fit=1200%2C818&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":423961,"url":"https:\/\/climatescience.press\/?p=423961","url_meta":{"origin":292010,"position":5},"title":"The Cost of Wind and Solar Power Backup","author":"uwe.roland.gross","date":"30\/01\/2026","format":false,"excerpt":"Another excellent discussion of the topic is in this\u00a0TPPF report\u00a0by Michael Reed and Brent Bennet. Reed and Bennett estimate that modifying the Texas grid to handle wind and solar output variability cost Texas electricity consumers $2.3 billion in 2023.","rel":"","context":"In \"coal\"","block_context":{"text":"coal","link":"https:\/\/climatescience.press\/?tag=coal"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0Screenshot-2026-01-30-191943.png?fit=1200%2C589&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0Screenshot-2026-01-30-191943.png?fit=1200%2C589&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0Screenshot-2026-01-30-191943.png?fit=1200%2C589&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0Screenshot-2026-01-30-191943.png?fit=1200%2C589&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0Screenshot-2026-01-30-191943.png?fit=1200%2C589&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/292010","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=292010"}],"version-history":[{"count":4,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/292010\/revisions"}],"predecessor-version":[{"id":292017,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/292010\/revisions\/292017"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/292016"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=292010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=292010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=292010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}