More impressive falls in solar and battery storage costs put fossil fuels on the alert


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More speculators are burdening the costs of photovoltaic and photovoltaic storage technologies, ensuring that renewable energy is not only much cheaper than coal and gas plants in generation costs, but also competitive in generating fossil fuels.

The latest technology cost analysis released by BloombergNEF research shows that battery storage costs have fallen more than a third since the first half of 2018, and even wind and solar have also dropped another 10%, respectively, during this time. period. The wind at sea has dropped 24% in the past year.

The big booster, and most significant for the unfolding low-carbon energy transition, has been the cost of storing lithium-ion batteries, which BNEF says has dropped 35 percent to $ 187 / MWh. This means that it is competing and, in some cases, easily surpassing gas generation for bids from peak mills, including in the US, where gas should be cheaper than elsewhere.

"Photovoltaic solar energy and onshore wind power have won the race to be the cheapest sources of new generation in bulk & # 39; in most countries, "said Tifenn Brandily, an energy-saving analyst at BNEF. "But the invasion of clean technologies is now going well beyond that, threatening the balancing role that gas-fueled plant operators in particular have been hoping to play."

BNEF describes the declines in wind, solar and storage costs – all considered immature and costly technologies just a few years ago – as "surprising" due mainly to technological innovation, economies of scale, strong price competition and manufacturing experience .

"Our analysis shows that LCOE per megawatt-hour for offshore wind, solar photovoltaic and offshore wind has dropped 49%, 84% and 56% respectively since 2010," says Elena Giannakopoulou, head of energy savings at BNEF.

"This for the storage of lithium-ion batteries has dropped by 76% since 2012, based on recent project costs and historic battery prices."

These declines in battery costs are opening up new opportunities to balance a mix of renewable energy generation, according to BNEF.

Co-located batteries with solar or wind power projects are beginning to compete, in many markets and without subsidy, with coal and gas generation for the supply of "dispatchable energy" that can be provided whenever the grid needs.

"The demand for electricity is subject to pronounced ups and downs between days. Reaching the peaks previously was the preservation of technologies such as open-cycle gas turbines and alternative gas engines, but are now facing the competition of batteries with anything between one and four hours of energy storage, "according to the report.

This is in line with the findings made in Australia by CSIRO and the Australian Power Market Operator in a major report last year that pointed to wind and solar and storage as the cheapest option for dispatchable generation in the country.

However, another US report suggested that wind and solar energy along with storage are now so cheap that it would be cheaper to close 75% of US coal generation and replace them with renewable and storage.

The trajectories of falling costs are now being surpassed by the newer, offshore wind, which has often been seen as a relatively expensive generation option compared to onshore wind or solar photovoltaic energy.

However, BNEF says that the new capacity auction programs, combined with much larger turbines, produced sharp reductions in capital costs to less than $ 100 per MWh, compared to more than $ 220 just five years ago .

Giannakopoulou said: "The low prices promised by wind auctions across Europe are materializing, with several high-profile projects reaching the financial end in recent months," Giannakopoulou said.

"Its decline in costs over the last six months is the sharpest we've ever seen for any technology."

The vast majority of the decline in photovoltaic solar energy in the last year occurred in the third quarter of 2018, when a change in Chinese policy led to a huge global supply of modules, rather than in recent months.


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