A brief decade held considerable cost-efficiency gains in wind and solar. These sustainable technologies are now more cost-effective than any other power generation technologies in general, according to Lazard. Solar and wind technologies simply make more sense.
Further, this analysis excludes subsidies. Solar and wind aren’t just cost-effective when subsidized — they’re cost-effective when not subsidized despite more than a century of fossil fuel subsidies.
— Lazard (@Lazard) November 18, 2019
These findings back up recent findings from Berkeley Lab’s Tracking the Sun report. Lazard’s full Levelized Cost of Energy 13.0 report and Levelized Cost of Storage Analysis 5.0 show dramatically different solar, wind, and battery storage costs in 2019 compared to 2009. Here’s one chart highlighting the trend:
Lazard’s #LCOE analysis indicates significant historical cost declines for utility-scale #RenewableEnergy generation technologies. View the full study now: https://t.co/cqboEjyMBF #LazardPerspective #Sustainability pic.twitter.com/gC6Og44s5u
— Lazard (@Lazard) November 19, 2019
Solar and wind became cheaper than competing new-build power plants years ago. What the latest report shows is that they have actually gotten so cheap that they are now competing with existing coal and nuclear power plants. In other words, new wind and solar farms can be cheaper than continuing to get power from existing coal and nuclear power plants. Here are some LCOE ranges for different technologies:
- Utility-scale thin-film solar: $32–42/MWh
- Wind: $28–54/MWh
- Existing nuclear (midpoint of marginal cost): $29/MWh
- Existing coal (midpoint of marginal cost): $33/MWh
- New coal: $66–152/MWh
- New nuclear: $118–192/MWh
- New gas combined cycle: $44–68/MWh
“While the reductions in costs continue, their rate of decline has slowed, especially for onshore wind. Costs for utility-scale solar have been falling more rapidly (about 13 percent per year) compared to the onshore wind (about 7 percent per year) over the past five years.”
Rolling in subsidies for renewable energy that are granted to make up with pollution externalities from other sources, solar and wind get even more competitive. “When US government subsidies are included, the cost of building new onshore wind and utility-scale solar (with values averaging $28/MWh and $36/MWh, respectively) is competitive with the marginal cost of coal and nuclear generation (with values averaging $34/MWh and $29/MWh, respectively).”
The report also includes comparisons for specific countries — USA, Australia, Brazil, India, South Africa, Japan, and Europe.
The storage report also shows a rapid drop in the costs of batteries, which leads to wind + storage or solar + storage getting increasingly competitive (and putting natural gas peaker plants out of business).
Lazard writes: “Lithium-ion, particularly for shorter duration applications, remains the least expensive of energy storage technologies analyzed and continues to decrease in cost, thanks to improving efficiencies and a maturing supply chain.
“Solar PV + storage systems are economically attractive for short-duration wholesale and commercial use cases, though they remain challenged for residential and longer-duration wholesale use cases.”
Top photo by Cynthia Shahan, CleanTechnica