Among other low-carbon energy technologies, offshore wind reduced its global average LCOE from $176 per MWh, to $174, but still remains significantly more expensive than wind, solar PV, coal or gas, while biomass incineration saw its levelised cost stay steady at $134 per MWh. “Thanks to a combination of increased capacity and stronger winds, output from turbines was up more than 80 per cent compared to the same period previous year – supplying power equivalent to the electrical needs of one and a half million homes”.
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According to BNEF, the lifetime cost of implementing new gas and coal initiatives has risen in every major region across the world in the second half of 2015, while the cost of renewables has fallen.
On a global scale, however, coal is still the cheapest form of electricity to produce in both the Americas and the Asia-Pacific region, but the cost of wind and solar power is dropping across the board.
Onshore wind and solar power became cheaper in the second half of this year, boosting their competitiveness with coal and gas-fired energy generation in a few parts of the world, research by Bloomberg New Energy Finance showed.
According to analysis by Bloomberg New Energy Finance (BNEF), wind power is now the cheapest electricity source in Germany and the United Kingdom, even without government subsidies. LCOE estimates factor for upfront capital outlays and development expenses, the cost of equity and debt finance fees, and operations and maintenance costs.
RenewableUK’s Deputy Chief Executive, Maf Smith, said: “This announcement means that wind farm companies can now go ahead and fully invest in local wind farm projects”.
Scotland’s renewable output during September hit a “big jump” according to WWF Scotland, which pointed out the unseasonal weather was a boon for the industry’s electricity generation. Specifically, both wind and solar did a lot of hard work, considering the country’s long track-record of late-year renewable energy generation records. That’s because once renewable plants are built, they have none of the input costs that come with fossil fuels that need to be constantly replenished.
BNEF’s analysis assumes a higher cost on carbon after European leaders agreed to market reforms in 2019 that would remove excess allowances from the world’s largest carbon credit trading program, known as the Emissions Trading System. For the first time in two decades, domestic coal production dropped below 1 billion short tons in 2014, reflecting the power sector’s move to cleaner sources to generate electricity. Meanwhile, coal-fired generation increased from $66 per megawatt hour to $75 in the Americas, to $73 in Asia-Pacific and to $105 in Europe.
In China, onshore wind is cheaper than gas – US$77/MWh versus US$113 – but much more expensive than coal, which is US$44/MWh, while the LCOE of PV in China is US$109 in China. “We’re seeing the utilization rate of fossil fuels wear away”.
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“People are innovating around extracting natural gas at lower and lower prices”, he said.
