Lazard releases its annual in-depth studies

NEW YORK, October 28, 2021 – Lazard Ltd (NYSE: LAZ) has released its annual in-depth studies comparing the costs of energy from various generation technologies, energy storage technologies for different applications and hydrogen production.

Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 15.0) shows the continued cost-competitiveness of certain renewable energy technologies on a subsidized basis and the marginal cost of coal, nuclear and combined cycle gas generation. The costs of renewable energy technologies continue to decline globally, albeit at a slowing pace, reflecting reductions in capital costs, increased competition as the sector continues to mature and continued improvements in scale and technology.

While projects reaching commercial operation in 2021 (and thus included in the scope of this study) continue to reflect declining costs (given that capital costs for such projects are generally negotiated 12 – 18 months in advance of project completion), commodity cost inflation, supply chain disruption and accelerating downstream demand for renewable energy generation capacity is putting upward pressure on project capital costs. While not reflected in this year’s study due to the retrospective nature of capital costs from projects reaching commercial operation this year, rising capital costs will likely lead to higher LCOE costs in future iterations of this report (albeit not necessarily higher relative costs).

Lazard’s latest annual Levelized Cost of Storage Analysis (LCOS 7.0) shows that year-over-year changes in the cost of storage are mixed across use cases and technologies, driven in part by the confluence of emerging supply chain constraints and shifting preferences in battery chemistry.

Lazard’s Levelized Cost of Hydrogen Analysis (LCOH 2.0) shows that the cost of hydrogen is still largely dependent on the cost and availability of the energy resources required to produce it. Hydrogen applications that require minimal additional steps (e.g., conversion, storage, transportation, etc.) to reach the end user will most likely achieve cost competitiveness sooner than those that require greater site or application-specific investments.

“Our three studies together document the continued acceleration of the energy transition,” said George Bilicic, Vice Chairman and Global Head of Lazard’s Power, Energy & Infrastructure Group. “We’re also seeing that the transition will not be dominated by any one solution — rather a new ‘all of the above’ approach, which includes renewable energy, storage, hydrogen and other solutions, will be key to effecting the permanent shift to increased energy efficiency and sustainability.”