An analysis conducted by the energy consultancy PÖYRY has found that unsubsidized renewables may be possible fairly soon in Europe. Wholesale grid parity could materialize following initial retail grid parity (aka socket parity) in several countries, but wholesale prices are lower than retail grid prices, so renewable costs need to drop further to meet them.
The PÖYRY report says that Turkey could experience solar and wind parity by as early as 2018. Spain might be able to achieve wholesale solar power parity by 2021, with Portugal’s coming a year later. Italy might be able to get there by 2025, according to the report. Romania, Croatia, Bulgaria and Greece could also get to wholesale grid parity in the 2020s.
Of course, this report does not consider the health costs, climate costs, and other environmental costs of conventional electricity sources. An EU report we highlighted yesterday found that, if you take such matters into account, onshore wind power is already the cheapest power option across all of Europe. Though logical, it’s not typical to take those costs into account, and the PÖYRY follows the trend and doesn’t do so.
PÖYRY’s BID3 modeling found that solar PV could get to wholesale grid parity ahead of onshore wind in Europe. Once grid parity has been reached, another 220 GW of solar capacity could be added in Europe.
Another factor that might contribute to renewable energy expansion is the growth of matching storage systems, a “breakthrough in the cost and efficiency of storing energy and a rapid drop in the expense of building clean-power plants would expedite a trend that would see renewables compete, subsidy-free, with conventional generation technologies.”
Such research reports are helpful in getting a better picture of important trends, but none are definitive. A different source, as mentioned in a recent guest post on CleanTechnica, contended that wholesale solar PV grid parity might be closer. “A new European study has found that large-scale solar PV with single axis tracking is already at grid parity with wholesale prices in one country, and soon will be with others. The study by research firm Eclareon find that Chile – with high electricity prices and excellent solar resources – is already at grid parity, which explains why it is one of the hottest markets for large-scale solar at the moment.” (Some say it is the hottest renewable energy market.) Morocco, Italy, and Mexico recently gotten close to grid parity as well, according to the same study.
Another point to consider is that the mention of unsubsidized renewables is a little odd when making comparisons to fossil-based energy, because fossil fuels are generally supported by substantial subsidies themselves. “Energy subsidies in the EU-15 have been estimated to amount to over EUR 29 billion in 2001 with almost three-quarters oriented towards the support of fossil fuels, despite the pressures and threats that these fuels place on the environment.” Here’s a chart on 2012 European energy subsidies from the first EU study mentioned above:
It’s sort of hilarious that some critics talk about the subsidies necessary for renewable energy, but never mention subsidies for fossil fuels such as coal, oil, and natural gas. They also never discuss a time when fossil fuels will be unsubsidized.
If you are interested in playing around with some of the variables that are part of levelized cost estimations, NREL has a fun calculator you can use to do that.
Image Credit: SunPower
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