Look Fast: Solar Is Blowing Past Coal … And Gas … And Wind

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

---

Now, here’s a surprise. Wind power has been growing at a rapid clip, but it looks like solar is sneaking up from behind with a Negasonic Teenage Warhead-scale weapon in hand: it’s cheaper. In fact, according to data studied by Bloomberg New Energy Finance, solar power is on its way to becoming “the cheapest form of new electricity” globally, even without subsidies.

The data is drawn from the third annual edition of an online tool called Climatescope, and yes, it shows that solar is becoming cheaper than coal and natural gas, too.

Solar Power Cheaper Than Wind

To be clear, BNEF’s take on the Climatescope data does not show that solar is cheaper in all markets. It’s a trend report that focuses on 58 emerging energy markets, including the gigantic Chinese and Indian markets. Chile, Brazil, Uruguay, and South Africa have also emerged as high-demand markets for low carbon (aka non-coal) energy projects.

Industry observers have been tracking cheap solar, which was once confined to highly specific, individual episodes such as regional auctions where competition pushes prices down.

BNEF teases out how those tiny specks are beginning to enlarge and connect:

…unsubsidized solar is beginning to outcompete coal and natural gas on a larger scale, and notably, new solar projects in emerging markets are costing less to build than wind projects, according to fresh data from Bloomberg New Energy Finance.

According to BNEF, industry observers have been anticipating that solar would outpace wind because costs are dropping more rapidly in the solar field. The surprise is that it happened so quickly.

Aside from being cheaper, solar also surpassed wind in the number of installations. BNEF’s projections for 2016 is that newly completed solar projects will add up to 70 gigawatts, with wind coming in second at 59 gigawatts.

More Bad News For Coal

Wind is still in a competitive position for power generation and it still has plenty of room to grow in terms of technology improvements that lower costs.

Natural gas is also still in a good position for power generation, especially with Exxon Mobil CEO Rex Tillerson set to lead US global energy policy as Secretary of State for the incoming Trump Administration (his position is pending confirmation by the Senate).

That leaves coal the odd man out, and BNEF does not spare the knife:

The world recently passed a turning point and is adding more capacity for clean energy each year than for coal and natural gas combined. Peak fossil-fuel use for electricity may be reached within the next decade.

If 2016 is any indication, peak use could come even sooner than BNEF projects:

This year has seen a remarkable run for solar power. Auctions, where private companies compete for massive contracts to provide electricity, established record after record for cheap solar power. It started with a contract in January to produce electricity for $64 per megawatt-hour in India; then a deal in August pegging $29.10 per megawatt hour in Chile. That’s record-cheap electricity—roughly half the price of competing coal power.

US coal companies have been depending on the export market to prop them up, but the rug is being pulled out from under those markets by global investors in solar and other renewables, notably those based in China.

The trend further undercuts President-elect Donald Trump’s emotional appeals to US coal workers and their communities during the 2016 campaign season. They helped propel him into office but ever since the bad news has been cascading down upon the domestic coal industry.

More $$$ For Cheap Energy

One interesting finding in Climatescope is that renewable energy projects tend to be more expensive in developed economies, where electricity demand has flatlined. That’s reflected in the location of the dollars where investors are staking their claims.

The 58 markets targeted by Bloomberg, despite their lower position on the developed-economy scale, slightly outspent the 35 developed nations that belong to OECD (the Organization for Economic Cooperation & Development).

The numbers add up to $153.7 billion for OECD nations, with the 58 emerging markets clocking in at $154.1 billion.

Right Back At You, Rex

Soon-to-be Secretary of State Tillerson has been traveling the globe to tout low cost natural gas as the only way to lift emerging markets out of “energy poverty.”

That’s true for the here and now. It’s also true that coal will continue to play a role in emerging markets for the foreseeable future.

However, the trend clearly points to shrinkage for both gas and coal in favor of solar and other renewables, and BNEF is not shy about hammering away at it. Here’s the closing argument from BNEF’s press release announcing the new report:

…for populations still relying on expensive kerosene generators, or who have no electricity at all, and for those living in the dangerous smog of thickly populated cities, the shift to renewables and increasingly to solar can’t come soon enough.

If you want a quick rundown on what the solar powered future looks like, check out the latest press release from Climatescope. One of the key trending sectors in emerging markets is a direct challenge to the central power plant model for coal and natural gas:

New players focused on “off-grid” or “mini-grid” solutions are challenging the assumption that only an expanded hub-and-spoke power grid can meet the needs of the world’s 1.2bn with inadequate access to power. A slew of these start-ups are privately-funded and between them had raised over $450m cumulatively through year-2015.

Climatescope, btw, is a free online renewable energy index that enables site visitors to compare progress in solar, wind and other low carbon sources among the 58 emerging markets. It is supported by the UK and the US, but considering President-elect’s disdain for renewable energy, the UK could be looking for a new partner after Inauguration Day.

Follow me on Twitter and Google+.

Image (screenshot): via BNEF.