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Low Solar, Battery Costs Will End Coal as China’s Primary Electricity Source

The plummeting cost of solar power and battery storage could help China meet nearly half of its electricity demand in 2060 with power from the sun, concludes a new study in the Proceedings of the National Academy of Sciences.

A team of researchers from the Harvard University School of Engineering and Applied Sciences and Beijing’s Tsinghua University “predicted that these solar supplies could be provided at a price below US2.5¢ per kilowatt-hour—even after energy storage is accounted for—significantly undercutting China’s existing supplies of coal power,” RenewEconomy reports. That one source of renewable supply would be enough to meet 43.2% of the country’s projected power demand.

“Such cheap supplies of solar energy would likely see coal pushed out as China’s primary source of electricity, with the cost of coal-fired generation currently within the range of 3.6 to 6.5¢/kWh,” the news story states. The research team also concluded that past studies of the country’s future grid “had underestimated the potential cost reductions for solar energy and battery storage technologies,” adds reporter Michael Mazengarb.

“The decline in costs for solar power and storage systems offers an opportunity for solar-plus-storage systems to serve as a cost-competitive source for the future energy system in China” and help drive a carbon-neutral electricity system, the researchers wrote.

The study lands at a moment when China faces record coal prices, ironically forcing the country’s solar producers to cut back production, Mazengarb notes.

But the researchers say the disruptions are just a blip on the march to cheaper renewables.

“Today, subsidy-free solar power has become cheaper than coal power in most parts of China, and this cost-competitive advantage will soon expand to the whole country due to technology advances and cost declines,” said study co-author Xi Lu, associate professor in Tsinghua’s School of Environment. “Our results demonstrate that the economic competitiveness of solar power combined with investments in storage systems could provide extra benefits for grid dispatch, which will be especially important for the operation of future electric systems in China.”

“The findings highlight a crucial energy transition point, not only for China but for other countries, at which combined solar power and storage systems become a cheaper alternative to coal-fired electricity and a more grid-compatible option,” said Harvard environmental studies professor Michael B. McElroy.