What is Lazard?
The calculation model many opinion leaders refer to when they claim that nuclear power is extremely expensive compared to wind and solar power comes from the American investment bank Lazard [1]. They have large wind and solar energy investments and are not a peer-reviewed scientific body.
Lazard’s assumptions strongly skew the comparison in favor of wind/solar and nuclear power without an empirical basis for it. Therefore, they find completely different price estimates than the energy experts at the International Energy Agency (IEA).
Biased investment rate
Lazard assumes a very high investment rate of 10% for nuclear power but 0% for wind and solar, which makes the comparison deeply unfair.
Biased longevity
Lazard assumes a lifetime of nuclear power of 40 years, although many nuclear power plants are licensed to operate for a minimum of 60 years. According to the UN, no technical limitation on service life exists [2].
Biased capacity factors
Lazard assumes unrealistically high capacity factors for wind and solar, which means their estimated price of these energy sources is lower than otherwise.
The capacity factor tells how much an energy source produces on average compared to its capability.
The problem, however, is that the assumptions are highly objectionable and not rooted in reality.
In Germany, wind energy had an average capacity factor of around 25% in 2015-2021, while Lazard assumes 38-55% – even for onshore wind [3]. For solar, the capacity factor in Germany was about 10%, while Lazard assumes between 14 and as much as 36%.
Sources
- https://www.lazard.com/media/451905/lazards-levelized-cost-of-energy-version-150-vf.pdf
- https://unece.org/sites/default/files/2021-08/Nuclear%20power%20brief_EN_0.pdf
- https://preview.redd.it/dr4liqo9xec81.gif?format=mp4&s=7d23ec4de1d27e6299872b73bcaf96fe563f8370
