In India, best-in-class solar and wind plants are now half the cost of new coal plants. Photo: Flickr.com / Ashwin Kumar CC BY-SA
Renewable energy now cheapest energy source
“Solar and/or wind are now the cheapest new source of generation in all major economies except Japan, ” according to a new Bloomberg study reported by the Institute for Energy Economics and Financial Analysis (IEEFA) in the USA. “This includes China and India, where not so long ago coal was king. In India, best-in-class solar and wind plants are now half the cost of new coal plants. The benchmark global levelised cost for onshore wind sits at $52/MWh, down 6 per cent from the 2018 analysis. This is on the back of cheaper turbines and a stronger US dollar. Onshore wind is now as cheap as $27/MWh in India and Texas, without subsidies. In most locations in the US today, wind outcompetes combined-cycle gas plants (CCGT) supplied by cheap shale gas as a source of new bulk generation. If the gas price rises above $3/MMBtu, IEEFA analysis suggests that new and existing CCGTs are going to run the risk of becoming rapidly undercut by new solar and wind. This means fewer run-hours and a stronger case for flexible technologies such as gas peaker plants and batteries that do well at lower utilisation (capacity factor).
Short-duration batteries are today the cheapest source of new fast-response and peaking capacity in all major economies except the US, where cheap gas gives peaker gas plants an edge. As electric vehicle manufacturing ramps up, battery costs are set to drop another 66 per cent by 2030, according to IEEFA. This, in turn, means cheaper battery storage for the power sector, lowering the cost of peak power and flexible capacity to levels never reached before by conventional fossil-fuel peaking plants.
Batteries co-located with PV or wind are becoming more common. IEEFA suggests that new-build solar and wind paired with four-hour battery storage systems can already be cost competitive, without subsidies, as a source of dispatchable generation compared with new coal and new gas plants in Australia and India.”
Institute for Energy Economics and and Financial Analysis, 20 November 2018, http://ieefa.org/bnef-unsubsidized-wind-solar-are-now-the-cheapest-bulk-...