Wind and solar are now cheaper than fossil fuels
For years, grid parity – the time when solar and wind would be cost-competitive with fossil fuels and nuclear – was the holy grail of renewables energy, a target to reach in a distant future. But the future is now.
Financial firm Lazard’s annual benchmark shows the Levelized Cost of Energy Analysis (LCOE) for the main electricity sources. The numbers for this year’s edition are quite impressive:
Nuclear is the most expensive per MWh: $148 (+20% since 2009). Then comes coal, with $102. Natural gas is at $60. But utility-scale solar PV is at $50 (-72% since 2009) and wind reaches $45 (-47%). Yes, that is right, solar and wind are now three times cheaper than nuclear and more than two times cheaper than coal… Renewables are even beating new natural gas-fired plants. This is a seismic shock for the energy sector and our entire civilization.
Here is the graph from Lazard:
Please bear in mind that these numbers are means: solar photovoltaic can already be found below $20 per MWh. In Mexico, two projects for solar farms got bid at $17.70 per MWh. Similar prices have been reached in Saudi Arabia earlier this year. This is absurdly cheap and this won’t stop there as analysts believe that solar could be $1 cent per kWh in 2019.
Meanwhile, nuclear has lost its way. Since the tragic accident in Fukushima, Japan, costs have been going up and up, +20 percent if you believe the numbers above. Utilities operating existing reactors are “bleeding cash” as Bloomberg reported earlier. It then comes to no surprise that many projects for new reactors have been cancelled.
And coal is no competitive anymore either due to 1. a glut of natural gas, 2. an increased interest in energy efficiency solutions and of course, 3. the renewable energy revolution.
Some utilities (and governments…) will fight to preserve their coal plants and mines. Others, more sensible, will just get on with the times and help their customers (and citizens) save energy and switch to renewables + storage. Anything to delay the inevitable will be counterproductive and a waste of money. Any attempt at cleaning up coal (via Carbon Capture and Storage or CCS) would be even more preposterous and expensive.
In the US, the Beyond Coal campaign has been widely succesful and may reach its goal of no coal in 2030 in the country. Already more than half of all coal-fired plants closed in the country. Banking on its success, efforts are moving to the European Union where the campaign was officially launched during the UN climate conference earlier this month in Bonn, Germany.
Besides being more and more expensive, coal is facing another problem: it pollutes a lot, both locally and globally. Environmental advocates – and myself – have been hammering this for a long time. A new study now shows that ditching the fossil fuel on a global scale would help keep sea rise levels to a minimum.
Not so long ago, coal had for itself that it was (dirt) cheap. But now that it is no longer the case, more and more wealthy nations like Canada, the UK, France and Italy (and even developing ones) are simply ditching this energy source or publishing plans to do so in the next few years. One can expect a speedy transition to clean energy sources.
Good riddance and on to cleaner and more decentralized energy sources !
Image credits: Flickr, Luca Temporelli.
(Granadilla III wind farm in Spain.)