This piece from Energy Bad Boys delivers a provocative verdict on one of the energy sector's most entrenched myths: that wind and solar are inherently the cheapest power sources. The article argues that the industry has finally moved past a decade of misleading metrics, shifting the debate from simple generation costs to the true price of reliability.
The Metric That Never Should Have Been
The editors open with a sharp critique of how Levelized Cost of Energy (LCOE) was weaponized by renewable advocates. They note that for years, journalists parroted claims that renewables were cheap "even without subsidies," largely because they didn't understand the metric's limitations. The piece asserts that LCOE was never designed to compare dispatchable fuel-based resources with intermittent weather-dependent ones.
"LCOE ignored several things to simplify cost comparisons... and most importantly, it didn't assess system costs to incorporate new resources, such as transmission requirements," Energy Bad Boys reports. This is a crucial distinction often lost in public discourse. The metric was originally a "cost-of-generating" tool from the 1980s, treating every megawatt-hour as equal regardless of when it was produced.
The article highlights that this flaw became glaring once wind and solar entered the grid. By 2014, even the Energy Information Administration warned against comparing dispatchable and non-dispatchable technologies directly, yet the industry ignored the caveat. "Levelized cost comparisons overvalue intermittent generating technologies compared to dispatchable base load generating technologies," the piece cites economist Paul Joskow as stating back in 2011. This historical context is vital; it shows that the economic debate isn't new, but the political will to address it has been slow to catch up.
The problem was how the metric was (mis)used by wind and solar advocates to peddle the fiction that wind and solar were the cheapest forms of energy.
Critics might argue that ignoring LCOE entirely throws out a useful baseline for technology cost reductions. However, the article's counterpoint is strong: a cheap unit of electricity that cannot be delivered when needed is not economically valuable to the grid.
The Hidden Costs of Intermittency
The commentary shifts to how the industry is finally accounting for "hidden" costs like backup generation and transmission. Energy Bad Boys details their own evolution from standard LCOE analysis to a new framework they call the Always On Levelized Cost of Energy (AO-LCOE). This model incorporates the costs of overbuilding capacity, curtailing excess production, and maintaining reliability during low-wind or night-time periods.
The results are stark. In a report on Minnesota's carbon-free mandate, the editors found that when these system costs were added, the price for wind skyrocketed to $272 per megawatt-hour and solar to $472. "This was the first serious attempt by anyone to fully quantify the system costs of wind and solar," the piece argues. This connects directly to the concept of the "duck curve"—where midday solar overproduction crashes prices, only for demand to spike when the sun sets, requiring expensive peaker plants or storage that traditional LCOE ignores.
The article notes that even former proponents are retreating from pure LCOE arguments. Lazard, a firm famous for its annual reports championing renewables, has begun incorporating "Cost of Firming Intermittency" into its latest editions. Similarly, the International Renewable Energy Agency (IRENA) admitted in a recent report that transforming variable output into a dependable supply is critical for assessing true economics.
"Understanding the cost of this 'firming'... is therefore critical for assessing the full economics of renewables," IRENA stated, an admission the editors call "remarkable." While the article notes these new estimates are still likely too low, the shift in language signals a turning point where reliability is no longer an afterthought.
Bottom Line
Energy Bad Boys makes a compelling case that the era of using LCOE as a standalone argument for renewable dominance is ending. The strongest part of their analysis is the rigorous inclusion of system-level costs like curtailment and backup, which fundamentally alters the economic picture. However, the biggest vulnerability lies in the specific assumptions used to calculate these "firming" costs; different modeling approaches could yield significantly lower figures. Readers should watch whether major institutions fully adopt these comprehensive metrics or if they revert to cherry-picked data when political pressure mounts.
Using LCOE to argue for the 'low cost' of wind and solar has become one of the clearest indications that someone is either disingenuous, misinformed, or relying on an outdated understanding of power systems.