Wind and solar power cheapest energy

New nuclear, new coal and new gas are far more expensive than wind and solar, according to financial advisor and asset management firm Lazard. Renewables can even beat existing fossil and nuclear power under some circumstances.

Lazard, a financial advisory and asset management company in New York, Paris and London presents data for the cost of electricity from different sources every year. The results for late 2021 come from version 15.0, and can be seen in a table below.

Wind power (onshore) is the cheapest energy, at $26-50MWh, followed by large-scale photovoltaics at $28–41. This is far, far lower than nuclear at 131–204, and new coal from 65 upwards.

If governments and power companies follow advice from Lazard they should not build any new conventional power. CCS is also an absolutely hopeless proposition.

That advice is pretty much followed in America and Europe – not in rhetoric but in actual investment.

As for the competition with existing coal, gas and nuclear power stations, the situation is not as clear-cut. Gas and nuclear for base load, i.e. when plants are run at full capacity most of the year, costs about as much as wind and solar. Coal loses out again.
In the real world, of course, things are more complex, in two senses.

Just because wind and solar are cheaper you can’t switch overnight. Licensing and permitting can take years, though the construction time is not so long for solar and wind.

Energy that can deliver when needed is more valuable than energy that can’t. Gas peakers produce expensive electricity, but can be very worthwhile for the few hours they are online to avoid blackouts or brownouts. So can batteries, an emerging alternative, which can make room for even more wind and solar. Lazard also follows the cost development for batteries.

Even through the difficult Covid years 2020–2021 when there was severe supply chain disruption, wind and solar costs continued to drop, from $28–54 for wind in 2019 to $26–50 in 2021, and for solar from $36–44 to $26–50.

Fredrik Lundberg

Table: The levelized costs of electricity  in USD per MWh, for various sources, according to Lazard.