The cost of clean energy is rapidly closing in on fossil fuels
The cost of renewable energy is closing in on fossil fuels, as wind and solar power are become increasingly competitive with gas and coal costs. According to Clean Technica and a new report from Bloomberg New Energy Finance, onshore wind is fully competitive with gas and coal in some parts of the world, while the gap is closing for the rest of wind and solar power worldwide.
“Our report shows wind and solar power continuing to get cheaper in 2015, helped by cheaper technology but also by lower finance costs,” Seb Henbest, head of Europe, Middle East and Africa at Bloomberg New Energy Finance told Clean Technica “Meanwhile, coal and gas have got more expensive on the back of lower utilization rates, and in Europe, higher carbon price assumptions following passage of the Market Stability Reserve reform.”
According to Bloomberg’s Levelised Cost of Electricity Update for the second half of 2015, the price per megawatt-hour of wind power dropped from $85 to $83 and solar dipped down from $129 to $122. The cost of coal power went up from $66 to $75 per MWh in the Americas, and also increased in the Asia-Pacific region and Europe. Gas turbine generations also increased during the period.
“Generating costs continue to vary greatly from region to region, reflecting influences such as the shale gas boom in the US, changing utilization rates in areas of high renewables penetration, the shortage of local gas production in East Asia, carbon prices in Europe, differing regulations on nuclear power across the world, and contrasting resources for solar generation,” said Luke Mills, analyst, energy economics at Bloomberg New Energy Finance.
“But onshore wind and solar PV are both now much more competitive against the established generation technologies than would have seemed possible only five or 10 years ago.”