L R AS Published on Saturday 2 May 2020 - n° 320 - Categories:evolution-stat
BloombergNEF sees spectacular gains on solar and storage
Recent "dramatic" gains have brought the cost of solar electricity down to less than $30/MWh. New onshore solar and wind power has become the cheapest option for two-thirds of the world's population. RE is becoming a "risk" for fossil fuel-based electricity generators.
The current cost of electricity was established by mixing 25 technologies from 7,000 projects in 47 countries. BloombergNEF has seen "spectacular" progress in solar, wind and storage over the past six months.
Solar power
In ten years, the average discounted cost of solar electricity (LCOE) has dropped from $362/MWh for fixed-support projects to $50 in the first half of 2020. The cost in tracker-equipped solar power plants has dropped from $347 / MWh to $39 / MWh.
The cost of fixed-support projects has fallen in China to $38 (-9% in the 2nd half of 2019) and in India to $33 / MWh, making solar energy a particularly competitive competitor to fossil fuels.
This is a consequence of the ever-increasing size of projects, improved technology and the use of auctions, which are forcing costs to be constantly reduced.
These figures were established before the pandemic. The pandemic is expected to have a significant effect on financing costs in the short and medium term, as well as on component prices. Lower coal and gas prices could protect fossil fuel production for some time by crowding out renewable energy.
The solar industry will return to below US$20/MWh in a decade (from the current US$30), BloombergNEF predicts.
Storage
The halving of costs is an incentive to use battery storage. Its average global OEL has fallen to $150/MWh, half the figure of two years ago. These gains have been made possible by manufacturing expansions and "more energy-dense chemistries". Size is also a factor in the drop in LCOE: an energy storage project today has an average capacity of 30 MWh, more than four times the 7 MWh that was the rule four years ago.
The lowering of the LCOE to US$150/MWh makes batteries the cheapest option for advanced technologies with a discharge time of two hours in Europe, China, Japan and in regions dependent on gas imports.
At $115 / MWh, China currently has the lowest LCOE for storage. This is due to "the proximity of developers to the equipment supply chain, as well as the more widespread use of cheaper LFP [lithium iron phosphate] chemicals".
Bloomberg NEF presentation: https: //about.newenergyfinance.com/blog/scale-up-of-solar-and-wind-puts-existing-coal-gas-at-risk/
https://www.pv-tech.org/news/solar-hits-new-milestones-as-renewables-become-worlds-cheapest-choice
PV Tech of 30 April
