New year, same story: Cost of wind and solar fall below cost of coal and gas

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It's that time of the year again: time for asset management company Lazard to release its annual Levelized Cost of Energy (LCOE) study. (We know, you've been waiting all year.) The numbers in the report offer economic insight into how energy choices were made in the previous year and how the energy landscape will likely change in the coming year.

The bottom line? The cost of coal-fired electricity per megawatt-hour hasn't budged a bit from 2017, while wind and solar costs per MWh are still falling. That spells bad news for an American coal revival, especially in places where the cost of building brand-new renewable installations is cheaper than the cost of operating existing coal and gas plants-a situation that Lazard says is happening with increasing frequency (PDF).

Lazard surveys energy buildouts that occurred in the previous year and divides the estimated cost of building and operating the plant, including fuel cost estimates, by the amount of energy a particular plant is expected to produce in its lifetime. This is useful because a nuclear power plant might cost billions to build, but it would have a vastly longer life and higher output than, say, a field of solar panels. By breaking costs down on a per-megawatt-hour basis, it becomes easier to compare sources of electricity.

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