Solar, Sourcing Renewables, Wind - March 28, 2018
Decline in cost of renewables hits fossil fuels
The deep decline in the cost of renewables has led to deteriorating economics for generating electricity from fossil fuels, with wind and solar expected to be cheaper than coal by 2023.
In a report from Bloomberg New Energy Finance on the levelized cost of energy, Elena Giannakopoulou, head of energy economics said, "Some existing coal and gas power stations, with sunk capital costs, will continue to have a role for many years, doing a combination of bulk generation and balancing. But the economic case for building new coal and gas capacity is crumbling."
Despite sharp drops in the cost of wind and solar power, coal and gas, which currently generate more than a third of the world’s electricity, remain the cheapest sources of power. However, several factors are expected to change this dominance in the coming years.
Lithium-ion batteries, which have posted a 79% decline in costs since 2010, are making the idea of storing energy a possibility the coming years. BNEF reported that the price per megawatt-hour for generating from wind farms built on land fell 18 percent in the first half of 2018 to $55 while photovoltaics dropped 18 percent to $70.
Additionally, the declining costs of batteries are expected to change the playing field as cheaper batteries could allow utilities to store wind- and solar-generated energy.
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