Clean Power solar power cheaper than coal

Published on November 23rd, 2011 | by Zachary Shahan


New IEA Report on Renewable Energy Costs & Policy (IEA Nails It!)

November 23rd, 2011 by  

The International Energy Agency (IEA), traditionally a very fossil-fuel-friendly international agency, reported today that renewable energy is becoming cost-competitive (and should receive subsidies to account for its environmental, energy security, and health benefits) — several extended quotes below.

While I’m happy to see the IEA make this announcement (and there are tons of great points made in the report that I highlight below), I can’t help but point out a couple things….

If you look at the full costs of each energy source (that means adding in health costs, energy security costs, and environmental costs) solar, wind, and geothermal are already equal to or cheaper than fossil fuels. What’s the difference between a dollar you spend at the hospital and a dollar you spend on your electricity? Nothing much, except who’s receiving that dollar and what you are going through (i.e. what health predicament you have or don’t have). IEA gets this, but could have done a better job of spelling that out.

Additionally, not even taking those factors into account, if you look at the rising costs of coal and nuclear, the falling costs of solar, and the time it takes to put up a coal or nuclear power plant, solar is already cheaper by many insider estimates.

solar power cheaper than coal

solar power cheaper than nuclear

Similarly, wind and geothermal are excessively cheap, and taking these same points into account, they are the cheapest options for new electricity in many or most regions today.

But, back to the IEA…. Here’s a great summary quote from the agency on renewable energy costs and renewable energy’s importance today:

“Taking the portfolio as a whole, RE technologies should no longer be considered only as high–cost, immature options, but potentially as a valuable component of any secure and sustainable energy economy, providing energy at a low cost with high price stability.”

IEA is for Renewable Energy Support

Again, I’m going to give some big kudos to the IEA for supporting green subsidies for renewable energy to better account for the environmental and energy security savings offered by clean energy. But even without these subsidies, the point is that renewable energy is knocking fossil fuels of their “I’m cheaper.. sort of” pedastool.

A “Key finding” of the IEA’s (highlighted in a nice little box at the top of a page):

“A portfolio of RE technologies is becoming cost-competitive in an increasingly broad range of circumstances, in some cases providing investment opportunities without the need for specific economic support, but economic barriers are still important in many cases. A range of significant non-economic barriers is also delaying progress.”

Hmm, I wonder what those “non-economic barriers are” (looking at you, Boehner, Inhofe, Stearns, and gang).

OK, not quite in the same way, but the IEA spelled it out, too:

“But even where RE technologies could be competitive, deployment can be delayed or prevented by barriers related to, for example, regulatory and policy uncertainty, institutional and administrative arrangements or infrastructure designed with fossil fuels in mind that may be unsuited to more distributed energy supply or the high up-front capital demand of RE technologies. Sustainability and social acceptance can also be critical issues for some technologies. In particular, regulatory and policy uncertainty may play a very significant role, even when economic barriers are removed, as shown by the analysis of the performance of financial support mechanisms in the next section”

Aside from pointing out that subsidies are warranted for the reasons mentioned above, the IEA also mentioned that they should get support to help them transition from nascent or emerging to more mature technologies:

“Support is also justified to allow the newer RE technologies to progress down the learning curve and so provide benefits at lower cost and in larger scale in the near future (Figure E.2).”

iea clean energy policy

The IEA delved into this topic several more times and covered specific policy options in good detail as well.

IEA: More Renewable Energy Cost Drops Coming

As I’ve written more times than I can count, renewable energy costs will continue coming down. But it’s nice to see the IEA put that in print.

“The market expansion of RE technologies, however, has been accompanied by cost reductions in critical technologies, such as wind and solar PV, and such trends are set to continue.”

A 16-page executive summary of the report is now on the IEA website.

Check out our new 93-page EV report, based on over 2,000 surveys collected from EV drivers in 49 of 50 US states, 26 European countries, and 9 Canadian provinces.

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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.

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  • BlueRock

    Lots of great info here, but this one needs repeating over and over again:

    * time to deploy 1 GW nuclear = 13 years

    * time to deploy 1 GW solar = 1 year

    It lays bare the claims that nukes are any kind of solution to climate change.

    • Anonymous

      I’m on your side, Blue. But I think we need to be careful to not overstate.
      One gig of solar is not equivalent to one gig of nuclear. In the sun belt we’re going to get power out of that gig of solar a bit more than 20% of the day whereas the nuclear plant will probably produce 90% of the time.
      We can install four or five gigs of solar in a year. It is physically possible. And if what the local grid needs is a lot of peak power, which is the case for most new generation needs, solar will work just fine.

      And five gigs of solar will likely be cheaper than one gig of nuclear. The price of new solar power in a sunny climate is now less than the price of new nuclear power.

      The fact that in an open/free market condition nuclear will not be able to sell its power at cost during many of the hours it operates means that nuclear is totally priced off the table by wind and solar. To make up for off-peak losses nuclear would have to sell at a price much higher than solar during the sunny hours.

      • BlueRock

        True, 1 GW of solar is not the same as 1 GW nuclear – i.e. capacity factor, which the nuke fan club love to cite endlessly. But it doesn’t all work to favour nukes – e.g. the advantage of generating electricity at point of consumption, thereby increasing security of supply, reducing grid losses and reducing need for big grid connections.

        For sure, solar PV doesn’t produce much in the middle of the night – but not much is being consumed then! 🙂

        Also, depending on location, wind often blows more strongly at night. That’s true for over here in the UK – as well as blowing stronger in winter… so a combination of solar / wind are perfect for us Brits (with hydro, biomass, etc. backup and grid connections to Europe).

        Good point re. selling nuke power during off-peak. The French know all about that as they sell to neighbouring countries in the middle of the night often at less than cost, but need to import during periods of high demand when they pay top dollar (or Euro!).

        I’m pretty convinced we’re on the cusp of a major energy revolution… it’s just a question of how long the fossil / nuke lobby can hold it off by buying politicians and misinforming the public. I’d love to be a fly on the wall of those boardrooms!

        • Anonymous

          I hadn’t heard about the French losing money on nuclear. Do you have any numbers?

          • BlueRock

            I didn’t say they’d “lost money on nuclear”. At least not in total. I’ve no idea what deals they’ve done in selling to other countries. Nor does anyone else. Nukes are so embedded in the French government and military it’s impossible to know. Although I do know they’ve sucked billions of £££s out of the British economy.

            But they certainly lose money on the European grid because they are forced to sell electricity low during periods of low demand and buy high at periods of high demand. Here’s a couple of starters:

            * The French Nuclear Myth.

            * The reality of France’s aggressive nuclear power push. Even the French no longer want it.

            It’s (partly) why the majority of French people want a full exit from the toxic nuke Ponzi Scheme.

            P.S. That 90% you claim for nuke capacity factor is not realistic – that’s what the nuke lobby try to push. It’s less than 80% globally and falling as old nukes fail more often and stay offline for longer.

            And citing 20% for solar is going to mislead people given the fact it provides *peak* generation. It’s a benefit, not a flaw. We don’t consume electricity at a constant rate so constant, 24-hour generation is more of a liability than a benefit. It’s another nail in the nuke coffin.

          • Anonymous

            Loosing in the sense of having to sell low and then buy back power at a higher cost. Not net loss.

            90% isn’t out of line if we are talking about a new reactor. The decision to build nuclear vs. other forms of generation should be based on the cost and performance of a new reactor.

            One of the problems renewables have now is that some people use the price of old, paid off reactors to argue that nuclear is cheap. I’m all for getting the numbers as honest as possible. (Do that and nuclear loses. ;o)
            The fact that nuclear has to sell 24/7 and there is no market for new power during off-peak hours makes nuclear a non-starter for most utility companies. The only companies in the US still pursuing nuclear are ones where they have the ability to push the cost of power off on their customers, regardless of the cost.

            Of course, what will kill those companies, if they do build new nuclear, is that a lot of their customers will start installing rooftop solar. It’s looking like we are really close to cheap battery storage and if you live in a reasonably sunny place and your utility company starts charging you

          • BlueRock

            But why cherry pick numbers from new nukes? They all get old eventually. It’s like claiming you own a car that never breaks down because it hasn’t broken down since you bought it 12 months ago.

            No, the decision to build a nuke or anything else should be based on a realistic assessment of lifetime costs and performance. That assessment is what makes nukes such a horrible investment… except maybe when the decommissioning and waste costs, etc. can be offloaded on to taxpayers.

            Yes, the plummeting cost of solar means that starting to build a new nuke now is a ridiculous idea… unless it gets bankrolled by the taxpayer (socialised costs, privatised profits yet again).

          • Anonymous

            Most build decisions tend to be made on levelized cost of energy (LCOE) and 20 years is the standard loan period used for comparison.

            Long term is not a consideration made by many. If it were then wind and solar would really win. After the 20 year loan payoff the price of wind drops to a couple of pennies per kWh. And modern wind turbines should have a good 20-30 years in them post payoff. Solar, after payoff, drops to about a penny per kWh. Panels should last another 30+ years but will lose a bit of performance over time (about 0.5% per year, max).

            Renewables are going to have to win on a 20 year LCOE basis before most people will accept them as the cheapest way to make new power.

            If we went to ‘lifetime’ pricing then renewables would already win. Right now solar is $0.154/kWh, large rooftop installations in the ‘sun belt’. Spread that cost over 50 years, allow $0.01/kWh for maintenance, and the price is $0.075/kWh including panel degradation and maintenance.

          • Anonymous

            love to see two great clean energy communicators sharpening their tools 😀

          • Anonymous

            on the issue of “if we took lifetime costs into account…,” i think that’s another thing worth mentioning more when writing about costs — too many people don’t realize how flawed a cost comparison based on 20 years is.

          • Anonymous

            Wind and solar have zero fuel costs.

            Solar certainly has the lowest maintenance costs. Hydro is probably second from the bottom.

            Wind is probably cheaper to maintain than coal or nuclear. All three have moving parts, but coal and nuclear are also dealing with heat stress on their machinery and cooling costs. And the costs of dealing with waste streams.

            It would be nice to see someone with a good handle on lifetime costs to work up numbers for all our energy options.

          • Anonymous

            i know — been dying for something like that! a delucci/jacobson pair need to tackle that! 😀

          • BlueRock

            If we’re going to drill down in to the nitty gritty, we’ll need to establish some ground rules – e.g. which country we’re talking about. 😉

            I’m really arguing from the perspective of ‘the way things should be’ – which is a holistic analysis… from cradle to grave. And the 800-lb gorilla in the room is nuclear waste – how much is that going to cost to store and manage for the next 100,000+ years?!

            I don’t think the 20-year LCOE is the key to widespread public support – solar PV on your roof has massive advantages over anything a grid-scale utility can do… not to mention the ‘feel good, cool and trendy’ factor that often drives the emotional part of buying things.

            Friendly neighbour rivalry is also a force: “Hey Bob, how much was your energy bill this month? Mine was ZERO!!” 🙂

            Similarly, a community can buy a wind turbine that would provide most or all of their power at a cost that a large utility could not compete with. It’s just a matter of time before more and more people realise this.. provided they can work around the protectionism that the big energy utilities have stamped in to legislation in many countries.

            Solar is already a no-brainer in many (most?) parts of the world – we just need to wait for most people’s brains to catch up! 😀

          • Anonymous

            Seriously, nuclear enthusiasts can be in the debate with everything else, they can at least try, but when you get to the lifespan of nuclear waste, it’s game over. i don’t know how anyone in their right mind thinks it’s ok to create harmful waste that last longer than humanity has existed for

          • BlueRock

            Yup. I have no understanding how some people basically sneer at this issue.

            “Hey, future generations – we left you this glowing pile of highly toxic sh|t to keep an eye on! Make sure you keep testing your drinking water! Pass the message on. LOL!!”

            Before Monbiot went AWOL on energy, he offered this:

            > “If, as a result of slow leakage into the groundwater, radioactive materials from a burial site kill an average of only one person a year for one million years, those who made the decision to bury them will – through their infinitesimal and unrecorded impacts – be responsible for the deaths of a million people.”

            But what do we know? We’re just fear-mongering eco-fascist hippies. 😉

            If you’ve not seen it you must watch – beautifully filmed, devastatingly simple and to the point. The reactions of the nuke executives who are interviewed and asked what happens in thousands of years time is priceless.



          • Anonymous

            Yeah, WTF happened to Monbiot! 😀

            But that is an awesome quote — hadn’t seen it.

            I’ve posted on Into Eternity, and watched several trailers, but haven’t watched the film yet.

          • BlueRock

            Tell me about it. 🙁 I was a big admirer of Monbiot until Fukushima went BANG and he lost the plot. I vented here:

            I suspect this is what happened to Monbiot: – that’s his old school chemistry teacher who he has kept in touch with and recently partnered in nuke / climate debates – + … Monbiot’s output is now chock full with nuke lobby talking points. Puzzling and disappointing in equal measure. :/

          • Anonymous

            I didn’t know you had a blog! Subscribed 😀

            This helps to connect the dots.. still baffling, tho

          • BlueRock

            Don’t expect too much – I’m averaging about one post every 6 months! I do plan to improve on that once I get some Real Life stuff tidied up in the near future.

            Yeah, it is baffling. Hey ho. Progress marches on regardless….

            All the best, mate.

          • Anonymous

            Yeah, I see that 😀

          • Anonymous

            the cool factor is a definite BIG ONE — or the peer pressure factor — that’s what’s going to explode solar.

    • Anonymous

      Thanks. Will do so.

      & yeah, think i need to drill that one more (and using the numbers)

  • BlueRock

    Excellent analysis of some excellent news. Thanks, Zach. 🙂

    > If you look at the full costs of each energy source (that means adding in health costs, energy security costs, and environmental costs) solar, wind, and geothermal are already equal to or cheaper than fossil fuels.

    I think this has been apparent for quite a long time – to those of us who have been paying attention and employed a little joined-up thinking.

    Whether it’s Chernobyl, Fukushima, Gulf oil spill, mountain top removal, they all make the case for harvesting free, clean, safe energy a total no-brainer.

    For example, the latest estimate I read for Fukushima is $250 billion – which obviously does not include the human cost of people forced from their homes forever. $250 billion buys quite a few solar panels.

    • Legacylife

      And it doesn’t factor in the cost of the cancers and so forth to come…in Japan, and in other countries as the contamination spreads. And it will be decades before we know the true ecological costs of killing off so much of our wildlife.

      • Anonymous

        Yep, many things we will never be able to “scientifically” link, even though they are linked.

        Or the cost of nearly infinite storage, something we can’t adequately calculate.

    • Anonymous

      Yep, I try to mention that every time I mention costs — it’s something too many people gloss over or forget about.

  • Akbweb2

    How can you put a dollar value on good health, fresh air, clean water, biodiversity and nature’s bounty?

    It’s ludicrous, really, to try, but that’s the values and ways human societies have come to be run….

    It’s upon these things all life depends in the first place…If they were truly lacking…without them we wouldn’t have the luxury of worrying about the dollar cost of this versus that energy cost…

    • Anonymous

      You can calculate the price of bad health and you can calculate the value of natural resources lost.

      That’s been done and that’s why we know that burning coal is our most expensive way to create electricity.

      • Anonymous

        You can put a number on them, but I think Andrew’s point is that you can’t really put a value on life, whether it be your own, another person’s, or even another being’s. And that you can’t really put a value on living a high-quality life versus a life of suffering.

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  • Great piece, Zach! Love your costs comparison for clean versus dirty energy energy: “What’s the difference between a dollar you spend at the hospital and a dollar you spend on your electricity? Nothing much, except who’s receiving that dollar and what you are going through”

    • Anonymous

      Thanks! Appreciate it coming from you 😀

      & Writing that line, I realized how much a need to better spell that out with such an analogy (rather than using terms like “externalities” and “true cost”). 😀

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