Renewables Are Not the Cheapest Form of Power

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The CEO of TotalEnergies believes that the renewable transition will lead to higher—not lower—energy prices. That’s a very different view from the popular belief that renewable energy prices are falling so fast that electric power will become ever-cheaper.

“We think that fundamentally this energy transition will mean a higher price of energy.

“I know that there is a theory which says renewables are cheaper, so it will be a lower price. We don’t think so because a system where you [have] more renewable intermittency is less efficient . . . so we think it’s an interesting field to invest in.

Patrick Pouyanné

Many energy analysts and renewable promoters see things differently.

“Renewables are by far the cheapest form of power today.”

Francesco La Camera, Director-General of IRENA

La Camera’s statement is based on a 2021 report by IRENA (International Renewable Energy Agency) that evaluated the levelized costs for renewable energy sources. The problem is that IRENA’s study only evaluated generation costs and did not account for electric power backup and storage costs. Since wind and solar are intermittent sources of electricity, the cost of natural gas backup or battery storage must be included in their levelized cost.

Lazard published a report in 2023 that includes backup and storage costs. The data indicates that electric power costs from wind and solar are about 21% more than from combined-cycle natural gas, 44% more expensive than from coal, and 144% more than nuclear power (Figure 1). At first glance, that doesn’t seem like an unreasonable premium to pay for cleaner electric power.

Wind & solar with backup are the most expensive forms of electric power
They are 21% more than expensive from combined-cycle natural gas, 
44% more than from coal and 144% more than nuclear
Figure 1. Wind & solar with backup are the most expensive forms of electric power.
They are 21% more than expensive from combined-cycle natural gas, 44% more than from coal and 144% more than nuclear.
Source: Lazard & Labyrinth Consulting Services, Inc.

On the other hand, Lazard seems to be substantially understating the cost of renewable backup generation shown in Figure 1 (Lazard figure on page 8 and Andy May Petrophysicist) and this will increase wind and solar levelized costs. Battery storage costs will be even more expensive than gas backup based on Lazard’s analysis.

Levelized cost is a snapshot, a static view of renewable energy at a relatively low level of market penetration. As penetration increases so will levelized cost.

Still, the unit costs that emerge from Lazard’s and similar analyses only tell part of the story.

“While it seems paradoxical that electricity prices could be rising while generation costs are falling, this possibility is an artifact of how electricity markets work.

“The retail prices paid by final customers reflect the full cost of delivering electricity. Generation, though the largest component, only accounts for 44 percent of the total cost.”

Brian Murray

Germany provides a case history as the western country that has most aggressively pursued wind and solar capacity. Renewable energy cost for German producers and consumers has steadily increased as electric power market share has expanded (Figure 2). I wonder why IRENA hasn’t calibrated its conclusions to physical reality.

Figure 2. Renewable energy cost for German producers and consumers has steadily inreased as electric power market share has expanded.
Figure 2. Renewable energy cost for German producers and consumers has steadily inreased as electric power market share has expanded. Source: Statistiches Bundesmat, Statista & Labyrinth Consulting Services, Inc.

Some might argue that the price increase in 2022 in Figure 2 was because of the Russian invasion of Ukraine and reduced natural gas supply to Europe as a result. That is true but it’s also the way that energy markets work. Higher marginal costs along the energy supply chain increase prices for the entire system. That also will get worse with greater renewable market penetration.

Nuclear die-hards will now predictably begin their Greek chorus that more atomic energy is the only answer. That’s a reality-blind dream because nuclear plants cannot be scaled fast enough to move the needle.

Total nuclear generation is expected to increase from 2,682 TWh (Terrawatt hours) in 2022 to 4,353 TWh by 2050 (Figure 3). That’s an 8% drop in bucket compared to the 54,000 TWh of projected electric power generation in 2050.

Figure 2. nuclear is expected to decrease from 9% in 2022 to 8% of world electric power generation by 2050. IEA Stated Policies Scenario.
Figure 3. nuclear is expected to decrease from 9% in 2022 to 8% of world electric power generation by 2050. IEA Stated Policies Scenario. Source: IEA & Labyrinth Consulting Services, Inc.

Doubling the number of plants completed in 2022 every year for the next 27 years would increase nuclear to only 16% of total electric power generation. That’s unlikely to happen.

The unavoidable intermittency of electric power supply from wind and solar cannot be overcome without increasing cost. Backup and storage expenses must necessarily grow as renewable market penetration increases.

It seems that Patrick Pouyanné may be right. Renewables are not the cheapest form of electric power. The renewable transition will probably mean higher—not lower—energy prices.

Everything has a price. The idea that we can reverse climate change and planetary overshoot without some trauma for society is just magical thinking.

Art Berman is anything but your run-of-the-mill energy consultant. With a résumé boasting over 40 years as a petroleum geologist, he’s here to annihilate your preconceived notions and rearm you with unfiltered, data-backed takes on energy and its colossal role in the world's economic pulse. Learn more about Art here.

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  1. Jeremy Bowden on March 6, 2024 at 7:56 am

    Hi Art, nice piece. The truth about solar/wind costs is somewhere in between the cost of generation and the cost of generation plus backup/connections – this is because there is an increasing amount of demand management. If you can use the solar or wind in situ when it is produced, then backup, etc, is not needed. For example, I charge my car (EV) up during the day when it’s sunny from my home solar panels. There are no storage or connections involved here – and that will be replicated in many ways across the system. The market will encourage this behavior by pricing – grid power during low renewables periods will be higher than otherwise, encouraging users to switch to cheaper periods, local storage or install decentralized power. As you say, there will be a need for some backup to renewables, but it is not the same capacity required as the installed capacity of the renewables. Plus, the cost of storage is likely to come down sharply and storage technology is likely to develop (air liquefaction may be the cheapest long term option). Another possibility is hydrogen mining for backup power – the US GS says there is enough naturally occurring hydrogen for clean energy use for hundreds of years – oil and gas companies have just got to start drilling for it.
    All the best, Jeremy

    • Art Berman on March 7, 2024 at 5:20 pm


      Read the post again and others like it. Your belief that renewable energy needs no backup is patently incorrect. A system that operates 7 hours per day–the average for the U.S.–is simply not ready for prime time. It’s an amusement park ride.

      Renewable energy is fully capable of powering a civilization–just not this one.

      All the best,


  2. Michael King on February 25, 2024 at 10:58 am

    Hi Art,

    Thanks for your work. The energy minister in the current Australian government made this quote in print media yesterday:

    “And if you don’t like University College London’s research, ask the merchant bank Lazard, which shows levelised cost of nuclear to be four times higher than utility-scale solar and wind.”

    I am writing a response to his essay and have followed your Lazard link, but cannot find your chart on “Levelised Cost” on this site. Page 8 is about sensitivity to carbon pricing. Is your quoted chart from a different document? Thanks in anticipation.

    • Art Berman on February 25, 2024 at 11:47 pm


      I made the chart using the midpoint data from Lazard’s report on page 7.

      Lazard page 7

      All the best,


  3. Robin Schaufler on February 19, 2024 at 3:12 am

    Thank you for this valuable information. I especially like your remarks about nuclear as magical thinking.

    The only truly green energy is energy not converted into work.

    If you try to mitigate oil depletion without considering climate, you court catastrophe. If you try to mitigate climate change without considering oil (and other mineral) depletion, you’re running a fool’s errand. Taken together, they dictate a lower energy future. Localizing power generation would decrease energy loss through transmission. Seems like something to incorporate into the strategy. And instead of giant utility scale batteries, put batteries in household appliances, office building utility rooms, and factory facilities.

    • Art Berman on February 22, 2024 at 11:19 am


      Thanks for your comments. As I’ve said in many posts, climate change is a narrow focus. It’s really a consequence of overshooting our planetary boundaries. CO2 is a waste product and form of pollution that is not special in the scheme of the poisoning of rivers, oceans and land. I’m not minimizing climate change as a problem; just putting it in context.

      All the best,


  4. Mark Kelly on February 17, 2024 at 10:38 am

    What will the LCOE trendline be like for gas and coal generated electricity over the next 3 decades? They need to get the fuel to the power plants, that requires oil and we appear to be on the downslope of peak oil. Geopolitics look increasingly like to to play a part in that downslope. According to John Peach, at the current rate of oil consumption, theres only about 20 years worth of oil left (P2). Wind & Solar will likely be less affected going forward by peak oil than coal and gas.

    Then there are the externalities – dumping their waste into the atmosphere – of coal and gas not factored into LCOE.

    Wind & Solar provide a glide path down to a lower energy future.

    • Art Berman on February 22, 2024 at 10:52 am


      There’s probably more than 20 years of oil left but at what price and where will the capital come from for its development? Those are the more important questions than how much is left IMO.

      I don’t see that wind and solar offer a glide path because there’s no way to cover their intermittency. Please see my latest post:

      All the best,


  5. Lee White on February 15, 2024 at 8:45 pm

    In what world is solar and wind clean or green? I am a scientists who can do energy equations and wind and solar absorb so much energy in their creation and disposal that the energy returned on energy invested makes them almost useless.
    Wind farms have energy output that declines from the beginning and are only economically viable for 15 years.

    Both wind and solar have serious waste problems. Being chemical waste it is a forever problem, unlike nuclear waste that is small in volume and decays over time.
    It is just an expensive way of importing coal derived energy from China.
    So in what way is solar and wind clean or green?

    Climate Change is a hoax. CO2 is airborne plant food and a net benefit to the environment.
    Renewables don’t work due to the unreliable and intermittent nature of solar and wind. Big batteries are just a fantasy for the innumerate. Pumped hydro is failing everywhere it is tried. Even worse the embodied energy in renewables is so high they barely produce enough energy return on energy investment to produce any new energy.

    For some real science on Climate Change see:
    and 31,000 scientist say Climate Change is a hoax:

    • Art Berman on February 16, 2024 at 1:36 am


      You say that you’ve done the calculations on wind and solar full-cycle emissions. So have I and you need to check your equations. That doesn’t mean that I believe they are a solution to our energy or ecological problems but they have a much smaller carbon footprint than equivalent fossil fuel sources.

      At the same time, I don’t see why you care since you believe that climate change is a hoax.

      Climate change many not be as apocalyptic as some imagine but it is unequivocally NOT a hoax.

      All the best,


  6. Shane Quimby on February 15, 2024 at 7:00 pm

    Besides not including backup and storage costs, LCOE also fails to include grid connectivity costs. Solar and wind projects are often in remote areas (and in the case of offshore wind, very remote) that require miles of high voltage cables (at roughly 1.2 million dollars per mile on land the last I checked) to get the energy that is produced to the grid. Just one more way that LCOE has proved to be an elaborate fantasy.

    • Art Berman on February 16, 2024 at 1:32 am


      Thanks for your comments.

      All the best,


  7. John L Ryan on February 15, 2024 at 2:55 pm

    I e expect the cost of renewables to decrease
    Do you?
    Do you expect the costs of fossil fuels to increase ?

    • Art Berman on February 15, 2024 at 3:40 pm



      I said clearly in my post that the cost of renewables WILL INCREASE. I also said that the cost of ALL ENERGY WILL INCREASE.

      All the best,


    • Sean on February 17, 2024 at 2:40 pm

      Even if the cost of PV/wind went to zero, the system costs would still be high.

      It’s like claiming cars will be cheaper because the you’re using new tires that are basically free but these tires require an expensive new suspension and differential.

      • Art Berman on February 22, 2024 at 10:52 am

        Good points, Sean.

        All the best,


  8. John L Ryan on February 15, 2024 at 2:51 pm

    Do his figures represent the current costs? In the future can we expect the storage costs to decrease?
    Solar power is only daylight, fortunately wind power is strongest after dark

    • Art Berman on February 15, 2024 at 3:41 pm


      All references were cited, dates were stated and links were provided.

      All the best,


  9. Steve Bull on February 15, 2024 at 2:42 pm

    The ecological costs have been left off the plate here, but this is not surprising given most analyses of our predicament do this as if the ecological systems destruction is somehow unimportant to the final calculus of ‘sustainability’; only the costs in terms of dollars is considered.

    • Art Berman on February 15, 2024 at 4:55 pm


      You are right. Nature is not just unimportant in our civilization–it is the enemy. Read Moby Dick or The Heart of Darkness for a full appreciation of that.

      “All visible objects, man, are but as pasteboard masks. But in each event–in the living act, the undoubted deed–there, some unknown but still reasoning thing puts forth the mouldings of its features from behind the unreasoning mask. If man will strike, strike through the mask! How can the prisoner reach outside except by thrusting through the wall? To me, the white whale is that wall, shoved near to me. Sometimes I think there’s naught beyond. But ’tis enough. He tasks me; he heaps me; I see in him outrageous strength, with an inscrutable malice sinewing it. That inscrutable thing is chiefly what I hate; and be the white whale agent, or be the white whale principal, I will wreak that hate upon him.”
      –Herman Melville

      “Going up that river was like traveling back to the earliest beginnings of the world, when vegetation rioted on the earth and the big trees were kings. The long stretches of the waterway ran on, deserted, into the gloom of overshadowed distances. And this stillness of life did not in the least resemble a peace. It was the stillness of an implacable force brooding over an inscrutable intention. It looked at you with a vengeful aspect.

      “The earth seemed unearthly. We are accustomed to look upon the shackled form of a conquered monster, but there—there you could look at a thing monstrous and free.”
      —Joseph Conrad

      All the best,


  10. Carl Dean on February 15, 2024 at 2:24 pm

    Art – The cost of government subsidies for solar & wind is absorbed by the US taxpayers. When those subsidies end the intermittent power prices will rise significantly. What would the unsubsidized cost be today?

    • Art Berman on February 15, 2024 at 4:48 pm


      Follow the link in my post to the Lazard 2023 report. They show the LCOE effect of subsidies and tax credits.

      All the best,


    • Yevhenii on February 16, 2024 at 6:39 pm

      Thank you, I will also add that in the energy hierarchy, renewable technological types are higher than fossil fuels, and therefore require a huge dispersal of primary fossil reserves, which are already expensive and subsidized.
      It’s all possible, but again, all high-tech infrastructure is a colossus on diesel legs.

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