Unsubsidized wind and solar are new the cheapest source of new grid-scale power in all the world’s major economies except Japan, according to the latest electricity cost competitiveness report from Bloomberg New Energy Finance.
The cost assessment “includes China and India, where not long ago coal was king,” reports Windpower Engineering & Development, in a post republished by the Institute for Energy Economics and Financial Analysis. “In India, best-in-class solar and wind plants are now half the cost of new coal plants.”
BNEF puts the benchmark cost of onshore wind at $52 per megawatt-hour (5.2¢ per kilowatt-hour), down 6% in six months. “Onshore wind is now as cheap as $27/MWh in India and Texas, without subsidy,” the analysis notes.
“In most locations in the U.S. today, wind outcompetes combined-cycle gas plants (CCGT) supplied by cheap shale gas as a source of new bulk generation,” BNEF adds. “If the gas price rises above $3/MMBtu, our analysis suggests that new and existing CCGT are going to run the risk of becoming rapidly undercut by new solar and wind. This means fewer run-hours and a stronger case for flexible technologies such as gas peaker plants and batteries that do well at lower utilization (capacity factor).”
Yesterday’s price range for natural gas was between $4.22 and $4.27 per million BTUs.
BNEF states that “short-duration batteries are today the cheapest source of new fast-response and peaking capacity in all major economies except the U.S., where cheap gas gives peaker gas plants an edge.” And “as electric vehicle manufacturing ramps-up, battery costs are set to drop another 66% by 2030.”
As a result, “batteries co-located with PV or wind are becoming more common. Our analysis suggests that new-build solar and wind paired with four-hour battery storage systems can already be cost competitive, without subsidy, as a source of dispatchable generation compared with new coal and new gas plants in Australia and India.”