Lazard Wind and Solar Costs, Part 2

Lazard Wind and Solar Costs, Part 2

Part 1 provided a review of Lazard’s methodology for determining LCOEs for land-based wind turbine and solar installations.

Conclusions—including new information

If an undefined “resource availability” is used to calculate LCOEs, the resulting LCOEs can’t be compared with a traditionally derived levelized cost of electricity (LCOE): It’s like comparing cashews with apples.

In addition, wind and solar are unreliable, and Lazard’s LCOEs do not fully reflect the extra costs associated with having to compensate for their intermittency and unreliability.

The Lazard report and nearly all media articles attempting to compare LCOEs between wind and solar installations and coal-fired and natural gas combined cycle (NGCC) power plants, are inappropriate and meaningless.

Wind and solar cannot replace coal and natural gas on a one for one basis … They are not interchangeable LEGO pieces.

Coal-fired and NGCC power plants continue to be the least costly methods for generating electricity, notwithstanding the Lazard study.

Since this review was published, additional information has been developed.

Need for storage

It’s been shown that the wind doesn’t blow and the sun doesn’t shine for extended periods: 

For example, ISO-NE reported in the winter of 2018, that solar was virtually unavailable for 11 days in New England. 

It has also been shown that the wind has failed to blow for as long as 9 consecutive days in Texas.

In front of the meter solar generation at low levels for 16 days.
 From ISO-New England Cold Weather Operations Presentation, January 2018.

A battery has not yet been developed that can store large quantities of electricity for periods of 11 days, or longer. This means wind and solar will not be available when needed and that blackouts for long periods are a possibility. FREYR Battery is the only known battery to be under development that claims to be able to store electricity for six days, but this is still short of what is needed for a safe and reliable grid.

Former Obama, Energy Secretary, Moniz, said, 

“Batteries should not be relied on for storage.”

Replacement costs

The cost of replacing wind, solar, and storage battery installations has been shown to be trillions of dollars, every 10 to 20 years, the life of the equipment.

This amount of investment required for wind and solar with storage is unsustainable and will bankrupt the country. 

NGCC power plants last for over 40 years. Coal fired power plants can operate for 60 years, while nuclear plants last for 80 years. Consideration is being given to allowing nuclear power plants to operate for 100 years.

In its latest cost analyses, Lazard continues to assume that the life of NGCC power plants is 20 years, and that the life of nuclear power plants is only 40 years.

GE’s first modern NGCC power plants with heat recovery boilers were built in the 1970s, while other types date back to the 1960s.

Storage is measured in MWh or KWh not just KW. This makes it difficult to use a single cost estimate to account for the impact of storage. The cost goes up as the amount of storage hours increases.  For any grid that does away with fossil fuels, long term storage is essential, and can’t be avoided. Storage costs must be added to the cost of wind and solar.

To put things in perspective, here is some raw data. 

  • Building an NGCC power plant costs $1,000 per KW, and lasts for 40 or more years.
  • Building a land based wind turbine power plant costs $1,300 per KW, and lasts for 20 years. To this must be added the cost of storage which lasts for ten years.


Wind and solar only supply small amounts of electricity compared with their nameplate ratings as measured by their capacity factor.

  • The capacity factor (CF) for the newest land-based wind installations is around 40%. As noted in Part 1, existing units have CFs of around 30%.
  • The CF for NGCC, and coal-fired power plants are around 80% when run as baseload plants and not in following mode. 
  • The CF for nuclear is over 90%.

Wind and solar generate electricity intermittently and can’t be relied on to supply electricity when needed. They cannot be used for reserve margins which are essential for preventing blackouts. The book, The Looming Energy Crisis, Are Blackouts Inevitable, describes why this is true.

Final Summary

Electricity from land-based wind and solar cost more than from NGCC, coal-fired, and nuclear power plants, while NGCC, coal-fired, and nuclear power plants are more reliable.

Lazard’s costs for land based wind and solar cannot be compared with LCOEs using long established methods.

. . .




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