This article is taken from a report, Lazard’s Levelized Cost of Energy Analysis – Version 9.0. authored by consulting firm Lazard. The Introduction is a list of illustrations and then this:
Other factors would also have a potentially significant effect on the results contained herein, but have not been examined in the scope of this current analysis. Additional factors could include:
- Capacity value vs. energy value;
- Stranded costs related to distributed generation or otherwise;
- Network upgrade, transmission or congestion costs;
- Integration costs; and
- Costs of complying with various environmental regulations (e.g., carbon emissions offsets, emissions control systems).
The analysis also does not address potential social and environmental externalities, including, for example, the social costs and rate consequences for those who cannot afford distribution generation solutions, as well as the long-term residual and societal consequences of various conventional generation technologies that are difficult to measure (e.g., nuclear waste disposal, environmental impacts, etc.)
While prior versions of this study have presented the LCOE inclusive of the U.S. Federal Investment Tax Credit and Production Tax Credit, Versions 6.0 to 9.0 present the LCOE on an unsubsidized basis, except as noted on the page titled “Levelized Cost of Energy—Sensitivity to U.S. Federal Tax Subsidies” I
Certain Alternative Energy generation technologies are cost-competitive with conventional generation technologies under some scenarios; such observation does not take into account potential social and environmental externalities (e.g., social costs of distributed generation, environmental consequences of certain conventional generation technologies, etc.) or reliability-related considerations (e.g., transmission and back-up generation costs associated with certain Alternative Energy technologies)
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