Solar, Wind Are Cheapest New Power Sources for Two-Thirds of World Population
Solar and wind are now the cheapest source of new electricity for at least two-thirds of the world’s population, with prices coming in at just 4.4¢ per kilowatt-hour for wind and 5¢ for solar, BloombergNEF (formerly Bloomberg New Energy Finance) reported this week.
“The prices are even lower in countries including the U.S., China, and Brazil,” the Bloomberg news agency reports, in a story republished by Canadian fossil newsletter JWN Energy. “Equipment costs have come down, technologies have improved, and governments across the world have boosted clean power targets as they seek to combat climate change. That could squeeze out coal and natural gas when utilities develop new power plants.”
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Costs are down 9% for wind and 4% for solar since the second half of last year. And while BloombergNEF Chief Economist Seb Henbest says the price crash brought about by the coronavirus pandemic could help non-renewables compete in the short term, the researchers see further cuts on the horizon.
“Best-in-class solar and wind projects will be pushing below $20 per megawatt-hour this side of 2030,” said BNEF analyst Tifenn Brandily. “There are plenty of innovations in the pipeline that will drive down costs further.”
The news report contains a stark comparison: Just a decade ago, solar cost more than US$300 per megawatt-hour (30¢ per kilowatt-hour), and wind came in above $100/MWh. Today, onshore wind costs $37 in the United States and $30 in Brazil, while China is paying $38 for solar, making the two renewables “the cheapest sources of new electricity in those countries”.
The cost of battery storage, meanwhile, is down by about half in the last two years, to $150/MWh. “That’s made it the cheapest new peaking power technology in places that import gas, including Europe, China, and Japan,” Bloomberg writes.
Last month, a feasibility study published in the journal Energy Strategy Reviews found that countries in the Middle East and North Africa (MENA) could cut costs by 55 to 69% by “relinquishing fossil fuels in favour of generation based mainly on solar and wind,” en route to electricity systems powered 100% by renewable energy, Greentech Media reports. Last week, the African Union Commission and the International Renewable Energy Agency announced a joint effort to help the continent cope with the pandemic using renewables.
“The cooperation aims to bolster Africa’s response to the pandemic by improving the ability of rural health centres and communities to deal with the health challenges using renewable energy to power critical services, such as medical equipment and water pumping for improving hygiene,” IRENA said.