Lazard Releases Annual Levelized Cost of Energy and Levelized Cost of Storage Analyses
November 07 2019 - 9:00AM
Business Wire
Lazard Ltd (NYSE: LAZ) has released its annual in-depth studies
comparing the costs of energy from various generation technologies
and of energy storage technologies for different applications.
Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE
13.0) shows that as the cost of renewable energy continues to
decline, certain technologies (e.g., onshore wind and utility-scale
solar), which became cost-competitive with conventional generation
several years ago on a new-build basis, continue to maintain
competitiveness with the marginal cost of existing conventional
generation technologies.
Lazard’s latest annual Levelized Cost of Storage Analysis (LCOS
5.0) shows that storage costs, particularly for lithium-ion
technology, have continued to decline faster than for alternate
storage technologies.
LCOE 13.0
- The cost of generating energy from onshore wind and
utility-scale solar projects fell by 3.5% and 7.0%, respectively,
over the past year.
- While the reductions in costs continue, their rate of decline
has slowed, especially for onshore wind. Costs for utility-scale
solar have been falling more rapidly (about 13 percent per year)
compared to onshore wind (about 7 percent per year) over the past
five years.
- When US government subsidies are included, the cost of building
new onshore wind and utility-scale solar (with values averaging
$28/MWh and $36/MWh, respectively) is competitive with the marginal
cost of coal and nuclear generation (with values averaging $34/MWh
and $29/MWh, respectively).
- Regional differences in resource availability and fuel costs
can drive meaningful variance in the LCOE of certain technologies,
although some of this variance can be mitigated by adjustments to a
project’s capital structure, reflecting the availability, and cost,
of debt and equity.
LCOS 5.0
- Lithium-ion, particularly for shorter duration applications,
remains the least expensive of energy storage technologies analyzed
and continues to decrease in cost, thanks to improving efficiencies
and a maturing supply chain.
- Solar PV + storage systems are economically attractive for
short-duration wholesale and commercial use cases, though they
remain challenged for residential and longer-duration wholesale use
cases.
LCOE 13.0 and LCOS 5.0 reflect Lazard’s approach to long-term
thought leadership, commitment to the sectors in which we
participate and focus on intellectual differentiation. The two
studies are posted at www.lazard.com/perspective/LCOE2019.
Lazard’s Global Power, Energy & Infrastructure Group serves
private and public sector clients with advisory services regarding
M&A, financing and other strategic matters. The group is active
in all areas of the traditional and alternative energy industries,
including regulated utilities, independent power producers,
alternative energy and infrastructure.
About Lazard
Lazard, one of the world's preeminent financial advisory and
asset management firms, operates from 42 cities across 27 countries
in North America, Europe, Asia, Australia, Central and South
America. With origins dating to 1848, the firm provides advice on
mergers and acquisitions, strategic matters, restructuring and
capital structure, capital raising and corporate finance, as well
as asset management services to corporations, partnerships,
institutions, governments and individuals. For more information on
Lazard, please visit www.lazard.com.
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Media: Clare Pickett +1 212 632
6963 clare.pickett@lazard.com
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