“Staggering”: Progress in Batteries, Wind, Solar Threatens Gas

March 27, 2019

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Bloomberg New Energy Finance:

London and New York, March 26, 2019 – Two technologies that were immature and expensive only a few years ago but are now at the center of the unfolding low-carbon energy transition have seen spectacular gains in cost-competitiveness in the last year.

The latest analysis by research company BloombergNEF (BNEF) shows that the benchmark levelized cost of electricity,[1] or LCOE, for lithium-ion batteries has fallen 35% to $187 per megawatt-hour since the first half of 2018. Meanwhile, the benchmark LCOE for offshore wind has tumbled by 24%.

Onshore wind and photovoltaic solar have also gotten cheaper, their respective benchmark LCOE reaching $50 and $57 per megawatt-hour for projects starting construction in early 2019, down 10% and 18% on the equivalent figures of a year ago.

Elena Giannakopoulou, head of energy economics at BNEF, commented: “Looking back over this decade, there have been staggering improvements in the cost-competitiveness of these low-carbon options, thanks to technology innovation, economies of scale, stiff price competition and manufacturing experience.

“Our analysis shows that the LCOE per megawatt-hour for onshore wind, solar PV and offshore wind have fallen by 49%, 84% and 56% respectively since 2010. That for lithium-ion battery storage has dropped by 76% since 2012, based on recent project costs and historical battery pack prices.”

The most striking finding in this LCOE Update, for the first-half of 2019, is on the cost improvements in lithium-ion batteries. These are opening up new opportunities for them to balance a renewables-heavy generation mix.

Batteries co-located with solar or wind projects are starting to compete, in many markets and without subsidy, with coal- and gas-fired generation for the provision of ‘dispatchable power’ that can be delivered whenever the grid needs it (as opposed to only when the wind is blowing, or the sun is shining).

Electricity demand is subject to pronounced peaks and lows inter-day. Meeting the peaks has previously been the preserve of technologies such as open-cycle gas turbines and gas reciprocating engines, but these are now facing competition from batteries with anything from one to four hours of energy storage, according to the report.

Tifenn Brandily, energy economics analyst at BNEF, said: “Solar PV and onshore wind have won the race to be the cheapest sources of new ‘bulk generation’ in most countries, but the encroachment of clean technologies is now going well beyond that, threatening the balancing role that gas-fired plant operators, in particular, have been hoping to play.”

Offshore wind has often been seen as a relatively expensive generation option compared to onshore wind or solar PV. However, auction programs for new capacity, combined with much larger turbines, have produced sharp reductions in capital costs, taking BNEF’s global benchmark for this technology below $100 per MWh, compared to more than $220 just five years ago.

Giannakopoulou said: “The low prices promised by offshore wind tenders throughout Europe are now materializing, with several high-profile projects reaching financial close in recent months. Its cost decline in the last six months is the sharpest we have seen for any technology.”

Although the LCOE of solar PV has fallen 18% in the last year, the great majority of that decline happened in the third quarter of 2018, when a shift in Chinese policy caused there to be a huge global supply glut of modules, rather than over the most recent months.

8 Responses to ““Staggering”: Progress in Batteries, Wind, Solar Threatens Gas”

  1. Sir Charles Says:

    Let’s hope so. Natural gas is lethal for the climate.

  2. dumboldguy Says:

    What’s “staggering” is that COAL use continues to climb. Until we deal with that, it doesn’t matter how cheap RE is getting

    • MorinMoss Says:

      I’d like to see China go all in on big storage batteries; the benefits to their grid would be huge and would be better for their environment than an equivalent amount of EVs.
      In fact they should sharply curtail sales of all passenger cars and scale up electric buses and grid storage as quickly as possible.

    • redskylite Says:

      What is also staggering is the supposedly enlightened U.K going ahead with a new coal mine, backed by representatives of the major political parties. Pinch me I thought this was the twenty first century.

      Deep coal mine gets go ahead in Cumbria despite protests

      Britain’s first new deep coal mine in 30 years has been given the go-ahead by Cumbria county council, sparking protests from climate change campaigners that the decision would harm the UK’s efforts to reduce CO2 emissions.

      The £165m Woodhouse colliery was backed by Labour, Conservative and Liberal Democrat councillors, who said it would bring vital jobs to the area. Copeland’s Conservative MP Trudy Harrison has “wholeheartedly” endorsed the proposed undersea mine, saying the investment it would bring to the area was crucial.

      https://www.theguardian.com/environment/2019/mar/19/deep-coal-mine-gets-go-ahead-in-cumbria-despite-protests

      Kind of like grandma and grandpa going on vacation using theirgranddaughter’s college savings account . . .

      https://www.forbes.com/sites/erikkobayashisolomon/2019/03/27/climate-change-investing-discounting-the-future/#ea767e866bda

      • dumboldguy Says:

        Good article from Forbes—-proves why Economists are not considered scientists. Mother Nature has her own “math”, and it goes more negative for the survival of the biosphere every time “economic growth” and “value” (in $$$) are put before science and common sense. That’s why it’s proving so hard to kill COAL.

        • redskylite Says:

          PT2 . .

          Perched at this time in human civilization, you – gentle reader – have the choice of how best to act to build and preserve intergenerational wealth in the 21st century. Facing a 93% chance of catastrophic climate change, are you going to continue betting on the status quo?

          It is time to invest in a new paradigm. Intelligent investors take note.

          https://www.forbes.com/sites/erikkobayashisolomon/2019/03/28/climate-change-investing-you-cant-discount-the-future/#79610eb3e55e

          • dumboldguy Says:

            Now it’s getting silly—yet another “economist” with a different view—–(How many economists does it take to change a light bulb? Five, plus or minus seven). The best part of this article is the link to the bass pond and the concept of “critical slowing down”.

            I’ll say it again—-talking about the “economics” of climate change is a sure sign of people who don’t care about the planet but only about how they can get rich, and most of them are so greedy and stingy that they will wait far too long before they put their money “in”.

            Remember too that Forbes calls itself “Rhe Capitalist Tool” , and its mission statement is:

            “Forbes Media is a global media, branding and technology company, with a focus on news and information about business, investing, technology, entrepreneurship, leadership and AFFLUENT LIFESTYLES” (EMPHASIS ADDED)


  3. […] “Staggering”: Progress in Batteries, Wind, Solar Threatens Gas […]


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