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It's a cost of selling a kwh on an existing market with relatively low renewables penetration and supported by fossils. It's not a true aggregate cost of an ene

It's a cost of selling a kwh on an existing market with relatively low renewables penetration and supported by fossils. It's not a true aggregate cost of an energy system dominated by, say, solar. Imagine we turn of all fossil generators tomorrow, forever. Solar panels will still be cheap, but instantaneous energy price in California will tend towards infinity every night, making solar-based generation an extremely expensive solution. That expense is not captured in Lazard's numbers. Neither do they capture the cost of transmission lines and storage necessary to eliminate blackouts in that scenario. People talk a lot about the time it takes to build nuclear, but transmission lines aren't much faster, and unlike reactors they don't generate on their own.

ZeroGravitas 3y ago
Lazard has been tracking the cost of storage for a while now (and cost of hydrogen production). They have a whole section when they compare renewables with battery storage against other "near firm" options.
- dgroshev 3y ago
  It's still LCOE, which is by definition focused on generating assets. It doesn't track societal costs or costs offloaded to other entities, like grids or households, that can be attributed to a particular generating technology becoming dominant. Things like sky high electricity prices during that blackout in Texas a few years ago don't really reflect in LCOE. That particular firming calculation on page 8 (if that's the one you have in mind) is a bit misleading, they use average capacity instead of historical capacity factors [1], which doesn't make any sense in places with seasonal variability. You need waaay less storage to "firm" an energy source that is active 25% of every day vs one active only during the summer. Time distribution matters, and they do acknowledge it in small print in a footnote, suggesting that they only mean firming the "duck's head" in the duck curve [2]. Which only captures a tiny part of a system that would need to store a whole night (or season's) worth of energy. [1]: "ELCC is an indicator of the reliability contribution of different resources to the electricity grid. The ELCC of a generation resource is based on its contribution to meeting peak electricity demand. For example, a 1 MW wind resource with a 15% ELCC provides 0.15 MW of capacity contribution and would need to be supplemented with 0.85 MW of additional firm capacity in order to represent the addition of 1 MW of firm system capacity." [2] "For PV + Storage cases, the effective ELCC value is represented. CAISO and PJM assess ELCC values separately for the PV and storage components of a system. Storage ELCC value is provided only for the capacity that can be charged directly by the accompanying resource up to the energy required for a 4 hour discharge during peak load. Any capacity available in excess of the 4 hour maximum discharge is attributed to the system at the solar ELCC."

ZeroGravitas 3y ago

Lazard has been tracking the cost of storage for a while now (and cost of hydrogen production). They have a whole section when they compare renewables with battery storage against other "near firm" options.

dgroshev 3y ago
It's still LCOE, which is by definition focused on generating assets. It doesn't track societal costs or costs offloaded to other entities, like grids or households, that can be attributed to a particular generating technology becoming dominant. Things like sky high electricity prices during that blackout in Texas a few years ago don't really reflect in LCOE. That particular firming calculation on page 8 (if that's the one you have in mind) is a bit misleading, they use average capacity instead of historical capacity factors [1], which doesn't make any sense in places with seasonal variability. You need waaay less storage to "firm" an energy source that is active 25% of every day vs one active only during the summer. Time distribution matters, and they do acknowledge it in small print in a footnote, suggesting that they only mean firming the "duck's head" in the duck curve [2]. Which only captures a tiny part of a system that would need to store a whole night (or season's) worth of energy. [1]: "ELCC is an indicator of the reliability contribution of different resources to the electricity grid. The ELCC of a generation resource is based on its contribution to meeting peak electricity demand. For example, a 1 MW wind resource with a 15% ELCC provides 0.15 MW of capacity contribution and would need to be supplemented with 0.85 MW of additional firm capacity in order to represent the addition of 1 MW of firm system capacity." [2] "For PV + Storage cases, the effective ELCC value is represented. CAISO and PJM assess ELCC values separately for the PV and storage components of a system. Storage ELCC value is provided only for the capacity that can be charged directly by the accompanying resource up to the energy required for a 4 hour discharge during peak load. Any capacity available in excess of the 4 hour maximum discharge is attributed to the system at the solar ELCC."