US natural gas power costs reach 17-year high on data center demand, Lazard says

Investing.com -- The cost of electricity from natural gas power plants in the United States reached its highest point in at least 17 years, according to data released Monday by Lazard Inc.

The levelized cost of energy for combined cycle gas plants rose to $90 per megawatt-hour in 2026, up from $78 the previous year. The figure represents the highest level since 2009, when the cost stood at $83 per megawatt-hour. Lazard tracks the long-term electricity price a power plant needs to break even.

George Bilicic, global head of power, energy and infrastructure at Lazard Inc., said the costs are expected to continue rising as demand increases from new data centers.

Renewable energy sources also saw price increases. Solar power costs climbed to $69 per megawatt-hour, while onshore wind rose to $68 per megawatt-hour. Both figures represent increases of more than 10% from the prior year and mark the highest levels since at least 2014.

The rising costs explain why utility bills are increasing in parts of the United States. High electricity costs have become a key issue for voters ahead of the midterm elections scheduled for November.

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