It reveals the utility-scale PV market in China has contracted by more than a third in 2018 because of policy revisions in that country
New Delhi: Solar and wind are now the cheapest new source of energy generation in all major economies, except Japan. This includes China and India, where not long ago coal was the king. In India, best-in-class solar and wind plants are now half the cost of new coal plants. These are the findings of the latest energy cost analysis by Bloomberg NEF.
Bloomberg NEF runs its Levelized Cost of Electricity (LCOE) analysis every half year, a global assessment of the cost-competitiveness of different power generating and energy storage technologies, excluding subsidies. The analysis covers around 7,000 projects across 20 technologies and 46 countries.
It reveals the utility-scale PV market in China has contracted by more than a third in 2018 because of policy revisions in that country. This, in turn, has created a global wave of cheap equipment that has driven the benchmark global levelized cost of new PV (non-tracking) down to $60 per MWh in 2H 2018, a 13 per cent drop from the first semester of 2018.
“Our benchmark global levelized cost for onshore wind sits at $52 per MWh, down 6 per cent from our 1H 2018 analysis. This is on the back of cheaper turbines and a stronger U.S. dollar. Onshore wind is now as cheap as $27 per MWh in India and Texas, without subsidy,” Blomberg NEF said in a statement.
The analysis, published as part of a report, found that in Asia-Pacific, more expensive gas imports mean that new-build combined-cycle gas plants with a levelized cost of $70-117 per MWh continue to be less competitive than new coal-fired power at $59-81 per MWh. This remains a major hurdle for reducing the carbon intensity of electricity generation in this part of the world, it said.
According to the report, short-duration batteries are today the cheapest source of new fast-response and peaking capacity in all major economies except the U.S., where cheap gas gives peaker gas plants an edge.
As electric vehicle manufacturing ramps-up, battery costs are set to drop another 66 per cent by 2030, according to our analysis. This, in turn, means cheaper battery storage for the power sector, lowering the cost of peak power and flexible capacity to levels never reached before by conventional fossil-fuel peaking plants.
Batteries co-located with PV or wind are becoming more common. The analysis suggests that new-build solar and wind paired with four-hour battery storage systems can already be cost competitive, without subsidy, as a source of dispatchable generation compared with new coal and new gas plants in Australia and India.