Wind And Solar Costs Down – Coal, Gas And Nuclear Up

The global average LCOE cost for onshore wind dropped from $85 per MWh in the first half of the year to $83 per MWh in the second half, while the cost of solar PV fell from $129 per MWh to $122 per MWh during the same period.

The report chimes with another recent study carried out by the global Energy Agency (IEA), which found that the cost of generating electricity from renewable resources such as solar and wind has more than halved in the last five years as they closed in on competitive fuel prices. According to a Bloomberg New Energy Finance, onshore wind and solar photovoltaics – the most widespread renewable technologies – have both become significantly cheaper this year, and in a few regions, are now actually cheaper than gas-fired and coal-fired generation.

Historically, fossil fuel plants have had higher and more predictable capacity factors than solar and wind. In the Americas, it increased from $66 per Mwh to $75, from $68 to $73 in Asia-Pacific, and from $82 to $105 in Europe.

The numbers drawn up by Bloomberg are a “levelised cost of energy” (LCOE) which takes into account financing, intermittency and other issues, so that different technologies can be fairly compared. And gas-fired electricity costs $82 in the Americas, on average (up from $76 per megawatt hour), and $118 in Europe. Wind power therefore generated the equivalent of 28% of Scotland’s entire electricity needs for the month.

In the USA, coal and gas are still cheaper, at US$65 per MWh, against onshore wind at US$80 and PV at US$107.

This creates a cycle that pushes up the cost of coal and gas power, leading to more renewable energy being generated.

The SNP have today welcomed new statistics highlighting the strength of the country’s renewable energy sector for the month of September, despite the lack of support from the United Kingdom government. That’s because renewable installations don’t require any fuel to operate, and thus don’t have that recurring cost that fossil fuel-fired generation has.

The impact of the wind and solar power revolution has taken many by surprise, including Bloomberg New Energy Finance it seems. “We do expect costs to come down”, Henbest says.

“Clean energy solutions like wind and solar are getting more affordable and more accessible by the day, meaning they are increasingly the smartest long-term financial investments for utilities and other electricity producers across America”, Michael Brune, the executive director of US-based environmental organisation, the Sierra Club, said in a statement. The plan could be announced before the climate talks in Paris in December.

Renewable energy is becoming more cost-competitive – and less risky – in the USA, too.