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Thanks to falling costs, unsubsidized onshore wind and solar have become the cheapest sources of electricity generation in nearly all major economies in the world, including India and China, according to a new report by Bloomberg NEF.
The comparative costs for power generation—the levelized costs of electricity (LCOE)—showed that onshore wind and solar are the cheapest power generation sources for all major economies except for Japan.
Even in India and China, where “not long ago coal was king”, solar and wind beat coal with cheaper generation, according to BNEF’s latest half-year LCOE analysis.
“In India, best-in-class solar and wind plants are now half the cost of new coal plants,” says the study, as carried by Renewable Energy Magazine.
In China, the utility-scale PV market has shrunk by a third so far in 2018, according to BNEF, because of the Chinese decision not to issue approvals for any new solar power installations this year and to cut the feed-in tariff subsidy. The market contraction in China, however, resulted in cheap equipment in the world, driving the LCOE for new PV down to $60/MWh in the second half this year, down by 13 percent compared to the first half of 2018.
In onshore wind, the comparable cost is now $52/MWh, down by 6 percent from H1 2018, thanks to cheaper turbines and a stronger U.S. dollar, according to BNEF’s analysis, which shows that unsubsidized onshore wind is now as cheap as $27/MWh in India and Texas, for example.
In August, Bloomberg NEF data showed that the world had reached the landmark 1 TW of wind and solar generation capacity installed. According to Bloomberg NEF estimates, the second terawatt of wind and solar capacity combined will be reached by the middle of 2023 and will cost 46 percent less than the first.
Cheap renewable energy and cheaper and cheaper batteries are expected to lead to wind and solar accounting for 50 percent of the world’s electricity generation by 2050, Bloomberg NEF’s New Energy Outlook 2018 says.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.