Lazard's Levelized Cost of Energy Analysis 2025

This technical report presents Lazard's Levelized Cost of Energy (LCOE) Analysis for 2025, focusing on three primary areas: Energy Generation, Energy Storage, and the Energy System. The report outlines that renewable energy remains the most cost-competitive generation source on an unsubsidized basis, highlighting its significance in the U.S. power generation landscape. It details the increasing competitiveness of existing gas generation and anticipates significant shifts in costs due to various market dynamics. The analysis also covers the Levelized Cost of Storage (LCOS), noting declines in storage costs driven by market conditions and technological advancements. Additionally, it discusses the rising costs associated with firming intermittency as renewable penetration increases, and the evolving methodologies of independent system operators regarding capacity accreditation. The report emphasizes the need for a diverse mix of energy resources to meet long-term power demands, incorporating emerging technologies such as long-duration energy storage and carbon capture.