Spectacular falls in the cost of wind, solar and battery technology mean that clean energy is increasingly pushing coal and gas out of the world’s electricity generation mix in a “chilling” development for the future of fossil fuel power generation.
Research group Bloomberg New Energy Finance (BNEF) has released its latest report on the levelized cost of electricity (LCOE) and it suggests that President Donald Trump’s attempts to revive the U.S. coal industry is doomed to failure. That’s because the price of battery storage has tumbled by 79% since 2010, from $1,000/kWh to $209/kWh while both wind and solar power have fallen by 18% in just a year.
BNEF says that fossil fuel power, which is responsible for the bulk of the world’s greenhouse gas (GHG) emissions, which cause climate change, “is facing an unprecedented challenge in all three roles it performs in the energy mix – the supply of ‘bulk generation,’ the supply of ‘dispatchable generation,’ and the provision of ‘flexibility.’”
Wind and solar PV costs have continued to fall over the last year thanks to falling capital costs, higher efficiency and the spread of competitive tenders for clean power around the world, increasing their viability in bulk generation.
Dispatchable power is the ability to respond to requests from the power network to increase or decrease generation and here, it is the pairing of battery storage with wind and solar to enable these intermittent sources of generation to tackle fluctuations in demand by smoothing output or diverting power into batteries to be used at a later date.
Flexibility is the ability to respond to supply shortages and surpluses over a period of hours, and here batteries on their own are now increasingly competitive not just with open-cycle gas plants but also other options such as pumped hydro.
Elena Giannakopoulou, head of energy economics at BNEF, said: “Our team has looked closely at the impact of the 79% decrease seen in lithium-ion battery costs since 2010 on the economics of this storage technology in different parts of the electricity system. The conclusions are chilling for the fossil fuel sector.
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