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Unsubsidized Renewables Increasingly Rival Fossil Fuels

Both Fraunhofer Institute (2013)and Lazard have presented studies showing that electricity from unsubsidized renewable sources is beginning to rival traditional fossil fuel sources. The graph above shows the situation in Germany, concentrating on PV-solar, wind and biomass and compare these with brown coal, coal and gas. The conclusions are rosy, to say the least. A few highlights from the report:

By 2030 the LCOE of PV power plants will sink to the range of 5-9 Eurocent/kWh.

PV utility-scale power plants in Southern Germany will drop considerably below the average LCOE for all fossil fuel power plants by 2030.

Onshore wind power will however continue to improve and the LCOE at locations with favorable wind conditions will reach parity with that of brown coal power plants 2020 at the latest.

Offshore wind power still has (Compared with onshore wind power) great potential for reducing costs. Through 2030, the generation costs depending on location and wind conditions will drop to values between 0.096 and 0.151 Euro/kWh.

LCOE = “common levelized cost of energy” –> The cost of electricity (typically cents/kWh, euro/kWh, euro or $/MWh) generated by different sources is a calculation of the cost of generating electricity at the point of connection to a load or electricity grid. It includes the initial capital, discount rate, as well as the costs of continuous operation, fuel, and maintenance. This type of calculation assists policy makers, researchers and others to guide discussions and decision making. [wikipedia]

[] – Levelized Cost of Electricity Renewable Energy Technologies (Nov 2013)

Lazard has carried out similar research related to the US and came to similar conclusions: renewable energy sources can begin to substitute conventional fossil fuel. In a matter of five years to cost of photovoltaics has come down dramatically.

[] – New Cost Analysis Shows Unsubsidized Renewables Increasingly Rival Fossil Fuels


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