Lazard LCOE/LCOS 2018 has been released

[neroden]

Levelized Cost of Energy and Levelized Cost of Storage 2018

Thread for discussion.

Points noted on page one:
-- utility-scale solar and wind is cheaper than any new fossil fuel plant, including gas combined cycle
-- utility-scale solar and wind is about the same cost as operating the average existing coal plant (meaning, it's cheaper than operating half of the existing coal plants)
-- the cheapest utility-scale wind is cheaper to operate than the average existing nuclear plants
-- the price declines for solar and wind continue, with solar getting cheaper faster than wind

 

[neroden]

Further notes:
-- drops in coal prices cannot save the economics of coal plants, they're still uncompetitive
-- drops in natgas prices would manage to keep them barely competitive with current solar and wind prices. Barely.
-- absolutely nothing compares on price to subsidized onshore wind; it makes sense right now to close all existing nuclear and coal plants to build subsidized onshore wind instead, and any sensible utility would do so immediately before the PTC & ITC go away.
-- the average price of unsubsidized tility-scale solar is about to cross below the average price of unsubsidized utility-scale wind. Wind has a much higher variance in LCOE, though, with some much cheaper projects and some much more expensive ones.

 

[neroden]

LCOS notes:
-- lithium-ion beats everything else on price.
-- there are still wide variances in pricing.
-- the best levelized costs seem to come from utility-scale PV+storage.
-- the market structures in the UK will provide high profits for the first utility-scale batteries.
-- the market structures in Canada will provided for massive profits for any company facing high demand charges which installs batteries.
-- in NY, the big money in storage currently comes from avoiding upgrades of distribution & transmission lines
-- in Australia, the big money comes basically from arbitraging away the excess profits created by market-manipulating fossil-fuel generators (a long story which has been told elsewhere).

-- Their residential price estimates look higher than Tesla, even after Tesla's recent price increases.

 

[ZachF]

The feedback loop will soon begin.

-Storage is now cheap enough to economically replace peaker plants.
-Solar is now getting cheaper than the production cost (fuel + O&M) of fossil fuel plants.

These two will feed off each other and start to eat from the market, until eventually solar + storage is cheaper than everything, and the fossil industry just dies.

Soon will will live in the future they talked about in the 60s, with electricity almost too cheap to meter. They will have to completely change the utility price model; you will pay a larger fixed price to hook up to the grid, and electricity will be priced by the time of day.... It will probably be so cheap during the day during the summer it'll almost seem free. Many in the southwest may choose to not even hook up to the grid at all.

They will build thousands of square miles of panels in the desert southwest, and pipe it all over the country. You will be able to see all the solar panels from space.

 

[ZachF]

It looks like that study uses $285/Kwh for a Li-ion battery price, and assumes an 8%/year price drop, both numbers which seem very conservative.

Hell, according to Tesla, you should be able to get under $200/Kwh by 2020 with a semi truck attached to the battery...

 

[ZachF]

The money shot:

 

[jhm]

Dang, it looks like solar could become cheaper than wind next year. Wind-Solar-Battery is truly the energy trifecta.

 

[ZachF]

Dang, it looks like solar could become cheaper than wind next year. Wind-Solar-Battery is truly the energy trifecta.

Ten years from now the LCOE of utility solar is probably going to be under 2 cents/KWh... IE dirt.

 

[dw4ngg]

Dang, it looks like solar could become cheaper than wind next year. Wind-Solar-Battery is truly the energy trifecta.

What would’ve thought....... and it’s free! Ish

 

[tmoz]

The money shot:

Awesome graph. Made me look up the original Lazard report.
https://www.lazard.com/media/450784/lazards-levelized-cost-of-energy-version-120-vfinal.pdf

and the website that also has a few more reports.
Levelized Cost of Energy and Levelized Cost of Storage 2018