Lazard released its annual report analyzing levelized cost of electricity (LCOE), a critical measure of cost-efficiency of generation sources across technology types. The report found that onshore wind and utility-scale solar have the lowest LCOE by a large margin.
Onshore wind ranked as the lowest source of new-build electricity generation, ranging from $27 to $73 per MWh. Utility-scale solar was a close second, ranging $29 to $92 per MWh.
Utility-scale solar has had the most aggressive cost reduction curve of all technologies, falling about 83% since 2009, when new build solar generation had an LCOE of over $350 per MWh.
Solar at the utility-scale is far lower in cost than the LCOE of coal, the least-expensive source of fossil fuel generation. Coal LCOE ranges $69 to $169 per MWh, making it nearly double the average LCOE of utility-scale solar assets.
Meanwhile, natural gas peaker plants are highly inefficient in LCOE, ranging from $110 to $228 per MWh. Nuclear energy had the highest utility-scale LCOE with an average of $182 per MWh.
Another data point, John Ketchum is CEO of NextEra, a giant energy developer which has a large portfolio that includes coal, gas, nuclear, and renewable projects. He spoke about recent reports of the need to ramp up electricity production in the US.
The CEO said he expects an almost 40% rise in US power demand over the next two decades, compared with just 9% over the previous 20 years. Renewable energy will meet most of the consumption boost because new gas-fired plants are much more expensive, take too long to connect to the grid and have to be supplied by hard-to-build gas pipelines, he said.
He said that adding battery storage to wind and solar farms can make those carbon-free sources almost as reliable in providing around-the-clock power as fossil fuels are.
“If I want to pay double, I can go with a gas-fired plant,” Ketchum said.
NextEra is the world’s largest non-government-backed developer of wind and solar energy, behind only major Chinese state-owned companies. The company has a pipeline of about 300 gigawatts of renewable and storage projects.
LCOE is a powerful measure to compare technology cost efficacy, but it does not tell the whole story. For instance, research from the Lawrence Berkeley National Laboratory found that wind and solar generation provided $249 billion dollars of climate and air quality health benefits from 2019 through 2022, or over $62 billion annually.
Why is roof top so high and not falling – is it the cost of labor (high profit) for the installers.
Lots of institutional barriers in the US, permitting etc, but also lack of regulatory structure that allows for solar owners to get fairly compensated for energy they produce above their needs that deliver to the grid.
Residential rooftop solar is unfairly over compensated! That’s why there was such a big fuss in California. Rooftop solar is anti economies of scale. That makes it hopelessly more expensive than energy from a concentrated power plant.
It has come down. But as you can see, commercial & industrial rooftop solar is separated here, making every household solar job small, unique, & custom. Solar panels are the main part coming down in price; a much higher proportion of costs is other stuff in household solar & while that’s coming down some in blue states, red states are reacting viciously, prodded by Koch, ALEC, & other fossil fuel & corporate money & the far right to pass laws fighting & obstructing renewables & not pass the laws we need helping them.
For a different way, see Australia, especially S. Australia. Saul Griffith has a number of interviews & at least 1 video & 1 podcast with David Roberts mentioning it.
Lazard has been thoroughly discredited for its apples to oranges comparisons. There’s no way they can account for land costs and the decreasing value of incremental additions. I have to wonder if that nuclear bar is based only on FOIK Vogtle.
Nuclear can’t be based on V.C. Summer’s plants 2 and 3 because they were cancelled after delays and overruns and Westinghouse entering bankruptcy.
– Vogtle’s last big delays was the need to redo a large number of critical welds. Not encouraging.
– Hinkley Point C in the UK: construction started early 2017 completion maybe 2029-2031 and with cost overruns
– Reuters quote from 2022 about the Flamanville project in France: “The Flamanville EPR reactor, which is already a decade behind schedule and has been dogged by repeated cost overruns, is now expected to start operations in the first quarter of 2024 and cost 13.2 billion euros, EDF said.”
– Olkiluoto C in Finland – €11 billion based on initial €3 billion estimate. Construction started 2005 for planned 2010 go-live. Operations began in early 2023.
And the NuScale SMR project in Idaho finally fell apart after continued increases in expected cost, and slip of first power into the early 2030s, before the last sponsors pulled out. There are some geothermal bids in the same area for similar amounts of generation.
We’ll have some new nuclear plants built in coming decades, but who knows if any of the dozens of SMR designs that exist will ever reach economy of scale – complex engineering isn’t repeatable after test unit #1 – it takes iterations and skills and money to bring the initial costs down with repetition and experience with a given design and its specific, critical materials. (Part counterfeiting was a scandal that stopped South Korea’s nuclear program for a while a decade ago).
There is no good reason to wait for nukes rather than push forward with the very capable wind, solar, battery systems that are much more amenable to mass production, rapid iterations in designs and materials, and are recyclable. That’s why their costs keep dropping.
Regarding “cost of land” that’s leasing and as Greenman reminds – it’s putting money in rural areas that can use the revenue stream. The land is also still usable for other purposes – and as thin-film develops consider the sides of buildings will become cheap extra collection area.
There’s also siting in a changing world – TEPCO was experienced with reactors and with Japan’s geology yet Fukushima’s design flaws became very apparent and now it’s a 40-year cleanup plan with who knows what cost.
Renewables and storage are also just a much better bet if you look at the big picture – the entire world needs to decarbonize, climate change will be destabilizing, making distributed power generation and storage a benefit, and does it really make sense to plan to go from the ~400 reactors currently to the thousands and thousands needed in the developing world?
Give me power with no dirty bomb risk (or shelling like around Ukraine’s Zaporizhzhia group of reactors)
There is a good reason to build nukes. It is called NEED for for Dispatchable non GHG emitting power.
Virtual power plants will increase as the grid continues to add grid (short and long term storage) and distributed storage as well as EVs (and aftermarket use of those batteries, too). Grid-connected battery systems also can provide faster response for power quality issues than spinning reserve can, and as grid-forming inverters increase in number, more and more of the functions that used to be thought depended on big thermal plants and their inertia can be replaced with non-thermal systems.
“Two ‘virtual power plants’ (VPPs) are now qualified and able to provide dispatchable power to the Texas electric grid, which is operated by the Electric Reliability Council of Texas (ERCOT). This marks a first for the state’s electricity market and is part of the Aggregate Distributed Energy Resource (ADER) pilot project the Public Utility Commission of Texas (PUCT) directed ERCOT to begin developing in June 2022. ”
https://www.oncor.com/content/oncorwww/wire/en/home/newsroom/-virtual-power-plants–to-provide-power-to-ercot-grid-for-the-fi.html
“The Pathway to: Virtual Power Plant Commercial Liftoff
Deploying 80-160 GW of virtual power plants (VPPs) by 2030 could expand the US grid’s capacity to reliably support rapid electrification while redirecting grid spending from peaker plants to participants and reducing overall grid costs.”
https://liftoff.energy.gov/vpp/
“Virtual power plant adoption could save California ratepayers $550M annually: Brattle report
The report called for the state to facilitate virtual power plant growth in California, noting that “more can be achieved” to scale VPP adoption by 2035. Published April 15, 2024”
https://www.utilitydive.com/news/virtual-power-plant-adoption-could-save-california-ratepayers-550m-annuall/713185/
“Tackling 3 key issues can help scale virtual power plants and spur a wave of benefits, analysts say
Utilities and VPP providers want smarter operations, better planning and strong interoperability standards to scale VPPs. Published April 17, 2024”
https://www.utilitydive.com/news/virtual-power-plants-vpp-der-distributed-energy-resources-derms/713282/
Keep the good nukes running as we decarbonize, and keep an open mind towards the new stuff but don’t depend on it being a viable long-term option. But prior to the increasing good economics of batteries, the big issue with wind and solar was not having an ability to time-shift from times of oversupply to other times. We’re getting there rapidly and nuclear will have a very different competitive environment when any new plants finally come online. And maybe I missed it, but I never hear the promoters of new nuclear drumming for a price on carbon emissions – which would help their economics while still aiding our main goal – decarbonizing.
That’s a reason to build geothermal (with lithium extraction), CSP, solar PV with storage, offshore wind in a distributed generation grid, & to combine solar, wind, geothermal, hydro, tidal, batteries. There is no rational reason to build nukes.
They can account for land costs and the decreasing value of incremental additions…by doing math. They can save lands we value by not allowing the insane right wing & its Wetiko-symptom addiction to domination, nihilism, & sadism, & its psychopathic capitalist values, anywhere near the conversation.
“NREL: How Much Land for Renewables?”
This Is Not Cool, March 1, 2023 https://climatecrocks.com/2023/03/01/nrel-how-much-land-for-renewables/
(RE land amount figures should be cut in ½ to reflect the energy savings renewable energy will provide, in ½ again to reflect ongoing rapid advances in renewable technology, ½ again because the US could do it all with offshore wind & rooftop solar.)
“Solar Much More Efficient Use of Land vs Ethanol”
This Is Not Cool, January 22, 2022
https://climatecrocks.com/2022/01/22/solar-much-more-efficient-use-of-land-vs-ethanol/
Josh Pierce video, 1 min.
“Rooftop solar and home batteries make a clean grid vastly more affordable:
Distributed energy is not an alternative to big power plants, but a complement.”
David Roberts, Volts, May 28, 2021
Externalities make every kind of fuel unacceptable.
Rooftop solar isn’t compensated nearly enough & the reason there was a typical far right wing lunatic blow up was because the far right wing lunatics blew up to slow renewable energy.
“Seeing Wetiko: on Capitalism, Mind Viruses, and Antidotes for a World in Transition”
Alnoor Ladha, Martin Kirk.