Renewables Remain Cheapest New Power Source, Lazard Says

Renewable energy remains the lowest-cost option for new power generation despite rising costs across all technologies, financial advisory firm Lazard (LAZ) said in a statement on Monday. In its latest annual Levelized Cost of Energy+ report it said inflation, supply chain constraints, tariffs and higher financing costs have increased the cost of building new generation, while surging electricity demand is accelerating investment in new capacity. Lazard said renewable energy continues to be the most cost-competitive form of unsubsidized new-build generation and is expected to account for most near-term US capacity additions. At the same time, utilities and developers have announced more natural gas projects to meet growing demand, even as the levelized cost of gas-fired generation has reached its highest level in 15 years and faces long development timelines. The report said rising electricity demand and reliability concerns underscore the need for a diverse mix of generation resources and faster permitting and approval processes. Delays in permitting, combined with pipeline constraints and inflationary pressures, are increasing project costs and threatening grid.