Lazard's Levelized Cost of Energy and Storage Analysis

This technical report presents Lazard's Levelized Cost of Energy (LCOE) Version 17.0, Levelized Cost of Storage (LCOS) Version 9.0, and Levelized Cost of Hydrogen (LCOH) Version 4.0 analyses. The LCOE analysis indicates that well-capitalized companies are leading the development of renewable energy assets, particularly in a rising cost environment. It highlights that low-end LCOE values have increased for the first time, driven by persistent cost pressures. The report emphasizes the necessity for diverse generation fleets to meet baseload power needs amid growing electricity demand. The LCOS analysis reveals increased variability in costs, with lithium-ion batteries remaining the most cost-competitive storage technology despite challenges. The LCOH analysis points to a maturing hydrogen industry, with observable declines in costs, while uncertainties around the implementation of the Inflation Reduction Act (IRA) tax credits for hydrogen projects persist. Overall, the report underscores the importance of innovation and diverse energy resources in the energy transition.