New study looks at cheapest energy sources in US
A study by the University of Texas at Austin’s Energy Institute found that natural gas, wind and solar energy are the cheapest sources of new electricity generation.
Shifting market conditions, a new policy environment, and other factors affecting the cost of electricity generation in counties across the United States have contributed to this trend, according to the Energy Institute’s paper, “New U.S. Power Costs: by County, with Environmental Externalities.”
Wind energy proved to be the option with the lowest cost for a broad swath of the country, from the High Plains, the Midwest and Texas, and even portions of the Northeast. Also, solar power is the cheapest technology in much of the Southwest, as well as parts of the eastern and northern regions of the United States. Natural gas also prevailed as the cheapest for much of the rest of the country.
“The new maps present a more accurate reflection of current market conditions, including revised prices that indicate the cost of various generating technologies,” Joshua Rhodes, a research affiliate at the Energy Institute and lead author of the paper, said.
Researchers used existing studies to create a formula called the Levelized Cost of Electricity (LCOE) to calculate generation costs.
“We think our methodology is sound and hope it encourages constructive dialogue,” Rhodes said. “To enable this dialogue among stakeholders who disagree about the various cost factors, we’ve created tools to allow them to change the factors and observe the outcomes.”
The research team has expertise on a wide range of disciplines including engineering, geosciences, business, public policy and law, Carey King, an assistant director at the Energy Institute and a principal investigator for the study, said.
“The LCOE calculator shows new power plant costs, but that accounts for only half of a customer’s bill,” King noted. “You can choose to include externalities or exclude them. You then add the LCOE – with or without externalities – to the cost of operating the electric grid, plus subsidies that affect practically all energy technologies, to see how they affect the consumer.”
