Renewable Energy Beats Fossil Fuels On Speed-To-Power (Shocker!)
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For all the love showered upon fossil fuels by US President Donald Trump, they just can’t keep up with the renewable energy technology of the 21st century. In particular, wind and solar offer more abundant, economical, and accessible solutions to the energy challenges of today. But, don’t just take our word for it. The leading US-based, global-facing asset manager Lazard has just run the numbers.
Renewable Energy Wins, Again
By now, everyone knows — or should know — that the Commander-in-Chief routinely makes stuff up to suit his own interests. Still, facts are facts, and the new Lazar analysis is a case in point. Earlier today the firm posted its 19th “Levelized Cost of Energy+” report, with LCOE referring to an agreed-upon system for comparing the cost of power generation between widely disparate energy resources.
The headline of the announcement sums up the state of affairs, with “renewables” referring to wind, solar, and storage:
Renewables Remain the Lowest-Cost New-Build Generation Despite Rising Cost Pressures, Lazard’s 2026 Levelized Cost of Energy+ Report Finds
The report itself takes note of an interesting situation. “Wind, solar and storage are expected to continue to account for the majority of near-term U.S. capacity additions given their relatively short deployment timeline,” Lazard summarizes. All else being equal, that leaves room for other new-build power generation resources to start eating up a larger share of new capacity additions, if and when they start producing a substantial amount of electricity. In addition to fossil energy, that includes nuclear as well as biomass, geothermal and hydropower.
Nevertheless, Lazard indicates that wind, solar, and storage will continue to maintain an edge on costs over the years, despite upward pressure. Lazard lists “higher capital costs, sustained interest rates, tariff pass-through and supply chain repricing” among the factors raising the cost of wind and solar, but the firm also emphasizes that wind and solar will continue to cost less than the alternatives.
“Renewables therefore maintain their relative cost advantage despite facing the same cost pressures affecting the rest of the generation stack,” Lazard concludes.
Gas Has A Problem
Lazard also has a warning for energy planners depending on gas power plants. The firm points out that new-build gas generation has already reached its highest LCOE in 15 years, and there is strong evidence that further increases are on the horizon. Based on a review of price quotes for new gas combined cycle power plants, Lazard indicates that “higher-cost projects may still be in the planning and development phases.”
“New gas combined cycle plants (“CCGT”) offer the lowest-cost dispatchable power in high-demand and low-cost-gas environments; however, gas turbine supply is constrained, extending development timelines well beyond historical norms,” Lazard notes.
The Reliability Factor: Wind And Solar Still Win
In comparing renewable energy to CCGT, Lazard also takes the cost of firming into account, referring to energy storage systems that smooth out power generation fluctuations for wind and solar systems due to the weather or time of day.
“Even after incorporating these firming costs, renewables remain broadly cost-competitive with the LCOE of CCGTs, and this comparison is drawn without any regional adjustment or offsetting firming charge applied to the CCGTs themselves,” Lazard summarizes.
If you caught that thing about not offsetting firming charge for CCGTs, that’s a significant point. After all, conventional power plants are not as perfectly reliable as Energy Secretary Chris Wright makes them out to be. Lazard lists fuel supply, pipeline deliverability and outage risk among the factors that prevent conventional power plants from achieving the perfect standard of reliability set forth by the “American Energy Dominance” policy of today.
“Rising power demand and intensifying reliability considerations—as evidenced by the increasingly broad application of sophisticated capacity accreditation methodologies across the generation stack, including for fossil resources—are compounding the pressures already confronting the Industry, from pipeline capacity constraints to rising and inflationary cost pressures,” Lazard elaborates.
What About Coal And Nuclear?
Other analysts have also noted that the nation’s rail freight capacity, modernization issues, and workforce shortcomings are among the many factors monkey-wrenching Trump’s plans for a coal power plant revival.
So far much of the Trump effort has focused on continuing to operate existing coal power plants long past their scheduled retirement dates, and Lazard casts doubt upon the strategy. While extending the useful life of existing assets can result in cost benefits compared to new construction, Lazard takes note of risks for power plants that depend on the vagaries of the commodities markets, particularly in the case of both natural gas and coal, according to Lazard. The firm cites “weather, geopolitical events and broader commodity market conditions” among the factors capable of pushing gas and coal prices up.
That’s…interesting! In contrast, upgrades that extend the life of existing wind and solar farms involve no such risks. In the case of wind energy, the US already hosts a large stockpile of aging wind turbines that can be replaced with new, more efficient technology. According to one estimate, the amount of underused wind farm capacity in the US adds up to 161 gigawatts. In some cases, repowering can reduce the number of turbines needed to produce the same — or more — power on the same land, freeing up space for other uses, land conservation programs, or both.
Solar power plants offer similar opportunities. In addition to replacing old solar modules, improvements in tracking systems can help squeeze more clean kilowatts out of the same footprint. Keep an eye on the global-facing US firm Kinematics, which launched its new “Kinematics Go!” solar tracking system at the Intersolar Europe show in Germany on June 23.
Diversity, Diversity, And More Diversity
Circling back around to the Lazard report, the firm does emphasize that the need for speed is paramount, and that leaves room for other energy resources to grow.
“We’ve entered a speed-to-power era—demand is outpacing supply, costs are climbing across every technology, and value is shifting to whoever can deliver capacity the fastest,” explains Samuel Scroggins, who holds the post of Managing Director and Head of Renewables & Sustainable Infrastructure at Lazard.
“Renewables remain the lowest-cost and quickest to deploy resource, but meeting this moment will require a diverse generation fleet,” Scroggins emphasizes.
Be that as it may, US energy policy is unlikely to do another abrupt about-face, at least not until a more fact-friendly President occupies the White House. However, the upcoming midterm elections provide an opportunity for the US electorate to steer the national ship in the direction of wind and solar energy. If you have any thoughts about that, drop a note in the discussion thread.
Image: The 19th “Levelized Cost of Energy+” from the leading asset manager Lazard makes a strong case for renewable energy, particularly wind and solar (screenshot, cropped courtesy of Lazard).
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