Assessment suggests renewables costs will plummet by 2020
Renewable energy is now cheaper than some fossil fuels, according to a financial thinktank. The firm also suggests running costs for wind farms may be less than half that of gas or coal-powered plants by 2020.
Last year, there was an upsurge in renewable energy capacity, with around 147GW added to the grid globally – the largest single increase in one year. The Carbon Tracker Initiative, a non-profit thinktank, has now calculated the average power generation costs for solar, wind, coal and gas using levelised cost of electricity (LCOE). This value represents the lifetime cost of building and running a plant per the total amount of electricity produced. The firm admits in its analysis, however, that a LCOE figure should only be taken as a guide.
As of 2016, gas-powered plants have a LCOE of nearly $80/MWh (£61/MWh), with solar and coal costing about $70/MWh. But wind power’s costs are lower at just over $60/MWh.
Carbon Tracker has also estimated the costs of power generation in 2020. It predicts that with governments introducing new decarbonisation targets, coal and gas plant costs are set to rise, with coal reaching over $100/MWh. It appears the reverse will be true for solar and wind, with costs projected to dip below $50/MWh.