Breakthrough In The Cost Of Solar And Wind Energy

solar and wind energy

One of the fastest and the most amazing turns in the history of energy occurred: in many areas the construction and operation of the new renewable energy became now cheaper than simply operating the existing coal and nuclear power plants. Actually, it is quite possible to survive without coal power – the recent experience of the Uk has proved that fact.

There is a conclusion from the whole-used yearly benchmarking study – the Levelized Cost of Energy Analysis (LCOE) from the financial firm Lazard Ltd.: the operating price of generation technologies (coal or nuclear) bear more costs than the full life-cycle costs of construction and operation projects that are based on the use of renewable energy sources.

Lazard is one of the leading financial consulting companies, as well as asset management companies in the world for many years. It was interested in the cost of energy from the plant in North America. It also focused on the following: how the growing economic advantage of renewable energy in the US “will contribute to an even deeper penetration of the sun and wind here”.

Expanding the Boundaries

But Lazard also wonders if it is more expensive to exploit conventional energy sources in the developing world than in the United States. Thus, in India and China, the number of electricity markets is growing rapidly and because of it the advantage of renewable energy sources compared to traditional sources is even larger there.

Let’s understand why the cost of new renewable energy sources for the whole lifetime is much cheaper than the new coal and nuclear energy. This happens because the capacity of new renewable energy sources is cheaper than electricity from existing coal and nuclear fuel. And this gap continues to grow.

In North America, the cost of solar energy and wind power fell by 6 percent last year,” – Lazard emphasizes. This was due to the fact that the price of coal remained at the same level and the cost of nuclear increased. The analysis suggests the following: compared with previous estimates estimated settlement cost of energy for nuclear generation increased by 35% and this reflects an increase in capital expenditures for the various nuclear facilities, which are under development.

In this remarkable diagram, which Lazard demonstrated to us, nuclear energy simply rated itself out of the market for a new power. But at that time, solar and wind energy fell sharply in price since 2009 and solar power is becoming less expensive than natural gas!

The Cost Issue

Comparing the cost of the life cycle of electricity in new nuclear power plants and solar power and wind, we arrive at powered by solarthe following data: the first value is now in the US $ 148. per megawatt-hour or 14.8 cents per kilowatt-hour, whereas 5 to / kWh for solar energy, and 4.5 c / kWh for wind. To compare, in the US there is the average price for electricity 11 cents per kWh.

Therefore, there is no great shock that in the United States only one new nuclear power plant is still under construction. It is also not surprising that even existing power plants are struggling to remain competitive.

The Bloomberg New Energy Finance report, which was published this summer, made the following conclusions: more than half of all existing US nuclear power plants are “bleeding money”. For Secretary Rick Perry was made a draft report from the staff of the US Department of Energy, which agreed that coal and nuclear resources are not economic anymore.

According to the diagram, new gas plants are more expensive than new solar panels and wind. The fact that solar energy and wind are changing still gives new opportunities for gas in some markets.  Since the price of electricity storage, including lithium-ion batteries, fell abruptly the future of renewable energy is more promising than before.