Cheaper wind, solar, batteries pose mounting threat to fossil power - BNEF

Author: Andrew.

March 28 (Renewables Now) - Increasingly cheaper wind, solar and battery technologies are posing an "unprecedented challenge" to fossil fuel power in all three roles it plays in providing bulk generation, dispatchable generation and flexibility, Bloomberg New Energy Finance (BNEF) said today.

According to BNEF's latest report on the levelised costs of electricity (LCOE), the benchmark global LCOE for onshore wind in the first half of 2018 is USD 55 (EUR 45) per MWh, a decline of 18% from the first half of 2017. The LCOE for solar photovoltaic (PV) power without tracking has also fallen by 18% to USD 70 per MWh. For offshore wind it is down 5% to USD 118 per MWh.  

BNEF's lithium-ion battery price index, meanwhile, shows a drop to USD 209 per kWh in 2017 from USD 1,000 per kWh in 2010.

"Some existing coal and gas power stations, with sunk capital costs, will continue to have a role for many years, doing a combination of bulk generation and balancing, as wind and solar penetration increase," said Elena Giannakopoulou, head of energy economics at BNEF. "But the economic case for building new coal and gas capacity is crumbling, as batteries start to encroach on the flexibility and peaking revenues enjoyed by fossil fuel plants," Giannakopoulou added.

BNEF said that onshore wind costs are particularly low in India, Brazil, Sweden and Australia. Examples for very low PV LCOE are seen in Chile, India, Australia and Jordan.

In India, for instance, benchmark the LCOEs for onshore wind and PV stand at USD 39 and USD 41 per MWh, down 46% and 45% on a year ago, respectively. Costs for coal are USD 68 per MWh, and for combined-cycle gas USD 93 per MWh. Wind or solar plus batteries have wide cost ranges but the centre of the ranges is falling fast, BNEF said. For wind-plus-battery in India the range is USD 34-208 per MWh, while for solar-plus-battery it is USD 47-308 per MWh.

(USD 1 = EUR 0.810)

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Plamena has been a UK-focused reporter for many years. As part of the Renewables Now team she is taking a keen interest in policy moves.

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