The latest levelized cost of onshore wind and solar report from Bloomberg New Energy Finance shows the price of renewables continues to decline. It says new solar and onshore wind power plants have now reached parity with average wholesale prices in California and parts of Europe. In China, those levelized costs are now below the average regulated coal power price, the reference price tag in that country. The report covers nearly 8,000 projects across 20 technologies and 46 countries.
BNEF says the global benchmark levelized cost numbers for onshore wind and PV projects financed in the last six months are at $47 and $51/MWh. That’s a decline of 6% for onshore wind and 11% for solar compared to the first half of 2019. Much of the decline in the cost of wind energy is due to a 7% decrease in the price of wind turbines since the end of last year.
China is the world’s largest solar market, but shifting government mandates and incentives have resulted in less solar development this year, leaving developers willing to cut prices to attract new business. In India, Chile, and Australia, BNEF expects the LCOE of new solar projects to be $27 to $36 per megawatt-hour. Brazil, India, Mexico, and Texas should be leaders in onshore wind with levelized costs in the range of $26 to $31 per megawatt-hour.
Offshore wind is where BNEF expects the steepest decline in levelized costs to occur. The LCOE of offshore wind is down a whopping 32% since this time last year and 12% since the first half of 2019 at $78 per megawatt-hour. The latest reports looks for offshore wind to plunge to the $53 to $64 range including transmission in Denmark and the Netherlands soon.
In an e-mail to CleanTechnica, Tifenn Brandily, author of the latest BNEF’s energy economics report, says, “This is a three-stage process. In phase one, new solar and wind get cheaper than new coal and gas plants on a cost-of-energy basis. In phase two, renewables reach parity with power prices. In phase three, they become even cheaper than running existing thermal plants.
“Our analysis shows that phase one has now been reached for two-thirds of the global population. Phase two started with California, China and parts of Europe. We expect phase three to be reached on a global scale by 2030. As this all plays out, thermal power plants will increasingly be relegated to a balancing role, looking for opportunities to generate when the sun doesn’t shine or the wind doesn’t blow.”
This would all be wonderful news if China was not aggressively exporting its coal-fired generating technology throughout southeast Asia in an effort to find work for its state-owned construction companies. Clearly, there is more progress needed in the field of renewable energy.