Published on November 21st, 2018 | by Joshua S Hill0
Solar & Onshore Wind Now Cheapest Source Of New Bulk Power
November 21st, 2018 by Joshua S Hill
New analysis from Bloomberg New Energy Finance has determined that falling technology costs have allowed unsubsidized solar and onshore wind to become the cheapest source of new bulk power in all major economies except Japan.
The findings come from Bloomberg New Energy Finance’s (BNEF) ‘2H 2018 LCOE‘ report, published on Monday, the company’s twice-yearly analysis of the Levelized Cost of Electricity (LCoE), a global assessment of the cost-competitiveness of different power generating and energy storage technologies (excluding subsidies).
The most important finding from the latest report is the news that solar and/or onshore wind are now the cheapest new source of generation in all the major economies, with the exception of Japan, but including China and India where, as BNEF explains, “not long ago coal was king.” More specifically, in India, best-in-class solar and onshore wind plants are now half the cost of new coal plants — showing once and for all the need for countries to trend away from coal-powered generation.
“It is now hard to deny that wind and solar PV are as cheap or cheaper than coal and gas, just about everywhere,” said Tifenn Brandily, an analyst with Bloomberg New Energy Finance, and lead author of the report. “And combined with battery storage they are also now increasingly able to compete with fossil fuel alternatives for hours when the wind isn’t blowing and the sun isn’t shining. Batteries are also today the cheapest source of fast-response flexibility and peaking capacity everywhere except the US where cheap gas still has an edge. As technology costs continue to decline it’s a matter of when, not if, these new energy technologies will disrupt electricity systems all over the world.”
Unsurprisingly, China remains an important indicator of the global energy market, specifically as it regards its impact on the global utility-scale solar PV sector. 2018 has seen a lot of ups and downs for China’s solar sector, due primarily to the government’s decision to cap installations, reduce the solar Feed-in Tariff, and the announcement that it would begin to offer non-monetary support to help solar and wind achieve grid price parity.
According to Bloomberg New Energy Finance, the contraction in China’s solar PV market in 2018 led to a “global wave of cheap equipment” that served to drive the benchmark globalized levelized cost of new (non-tracking) solar PV down to $60/MWh in 2H 2018, a 13% drop from the first semester of 2018. In China specifically, no-tracking solar has the potential to be the cheapest form of new bulk power generation, followed by onshore wind. Coal still remains strong, but what is more promising is the potential low-cost of onshore wind and/or solar plus storage. Looking out to 2030, BNEF expects the cost of new coal and gas plants to remain relatively unchanged, but new utility-scale solar PV (non-tracking) will drop by 41% and onshore wind by a further 25%. More importantly, BNEF also expects the current state of play to extend into 2019, which will have a direct impact on that year’s solar capacity expectations.
Cost of new bulk and dispatchable electricity, China
The benchmark global levelized cost of onshore wind sits even lower than solar, at $52/MWh, down 6% from BNEF’s 1H 2018 analysis, and driven by cheaper turbines and a stronger US dollar. This is, of course, the average cost, and is as cheap as $27/MWh in India and Texas. Further, in most locations across the United States, wind outcompetes combined-cycle gas plants (CCGT) supplied by shale gas, putting the lie to the idea that shale gas is the savior of America’s power reserves. Further, according to BNEF, “If the gas price rises above $3/MMBtu, our analysis suggests that new and existing CCGT are going to run the risk of becoming rapidly undercut by new solar and wind.”
Conversely, in the Asia Pacific region, gas imports are becoming more expensive, meaning that CCGT runs with a levelized cost of between $70 to $117/MWh, less competitive than generation from new coal-fired power plants which sits at between $59-$81/MWh, and causing a major hurdle for reducing the carbon intensity of the region’s electricity generation.
Finally, and highlighting a growing trend in the energy sector, short-duration batteries are now the cheapest source of new fast-response and peaking capacity across the globe — except in the United States, where cheap gas gives peaker gas plants an edge. Further, as electric vehicle manufacturers ramp up, battery costs will only continue to fall and are set to decline by 66% by 2030, resulting in cheaper storage for the power sector. Further, batteries combined with solar PV or wind are becoming more common, and BNEF’s new analysis predicts that new-build solar and wind which are paired with four-hour battery storage systems can already be cost-competitive, without subsidy, as a source of dispatchable generation, when compared with new coal and gas plants in historically fossil fuel-intensive countries such as Australia and India.
Follow CleanTechnica on Google News.
It will make you happy & help you live in peace for the rest of your life.