Solar, wind and batteries see dramatic gains in competitiveness over the last six months compared to longer-established energy options
London and New York, April 28, 2020 – Solar PV and onshore wind are now the cheapest sources of new-build generation for at least two-thirds of the global population. Those two-thirds live in locations that comprise 71% of gross domestic product and 85% of energy generation. Battery storage is now the cheapest new-build technology for peaking purposes (up to two-hours of discharge duration) in gas-importing regions, like Europe, China or Japan.
The latest analysis by research company BloombergNEF (BNEF) shows that the global benchmark levelized cost of electricity,[1] or LCOE, for onshore wind and utility-scale PV,[2] has fallen 9% and 4% since the second half of 2019 – to $44 and $50/MWh, respectively. Meanwhile, the benchmark LCOE for battery storage has tumbled to $150/MWh, about half of what it was two years ago.
Onshore wind has seen its most significant drop in cost since 2015. This is mainly due to a scale-up in turbine size, now averaging 4.1 megawatts, and priced at about $0.7 million per megawatt for recently financed projects. In Brazil for instance, where wind resources are ample, the economic crisis of 2016 onwards saw the cost of capital for wind projects increase by up to 13%. BNEF’s analysis suggest that lending rates more recently have fallen back to levels seen before that crisis. And this means that best-in-class onshore wind projects can achieve an LCOE of $24 per megawatt-hour, the lowest globally. Meanwhile top projects in the U.S., India and Spain follow at $26, $29 and $29 per megawatt-hour respectively, excluding subsidies such as tax-credits.
Read the full article at BloombergNEF.