JOE ROMM JUN 18, 2019
A new study reveals just how stunningly rapid the clean energy transition is.
Bloomberg New Energy Finance (BNEF) reported on Tuesday that renewables are now the cheapest form of new electricity generation across two thirds of the world — cheaper than both new coal and new natural gas power.
Yet just five years ago, renewables were the cheapest source of new power in only 1% of the world, explains BNEF in its New Energy Outlook 2019.
Equally remarkable, BNEF projects that by 2030, wind and solar will “undercut existing coal and gas almost everywhere.”
In other words, within a decade it will be cheaper to build and operate new renewable power plants than it will be to just keep operating existing fossil fuel plants — even in the United States.New analysis of solar and wind should put the natural gas industry on notice
The reason for this transformation is the remarkable drop in both solar and wind power prices this decade: Since 2010, wind power has dropped 49% in cost and solar plummeted 85%.
BNEF projects prices will continue to fall for the next decade and beyond, with the cost of solar panels and wind power dropping by another third by 2030. Overall, by 2050, the cost of solar electricity is expected to drop 63% compared to today, and the cost of wind will likely drop 48%.
Because of these ongoing price drops, the world is projected to invest a whopping $4.2 trillion in solar power generation in the next three decades. The result is that solar will jump from a mere 2% of global power generation today to a remarkable 22% in 2050.
Over the same three decades, global investment in wind power will likely hit $5.3 trillion, and wind is expected to rise from 5% of global electricity today to 26% in 2050.
The result is that we are shifting from a world today where two thirds of power generation is from fossil fuels to one three decades from now where two thirds is zero carbon. As BNEF puts it, we are “ending the era of fossil fuel dominance in the power sector.”
The stunning price drops in wind and solar power have continued. No longer are U.S. solar and wind plants merely cheaper than coal plants — they are also more affordable than new natural gas plants.
And this is without subsidies or a price on carbon. Indeed, according to the financial firm Lazard Ltd, in many areas, building and running new renewables is now cheaper than just running old coal and nuclear plants.
The bad news, however, is that while renewables are projected to capture two-thirds of the $10 trillion the world will invest in new generation through 2040, this will not be enough to avoid catastrophic warming, the International Energy Agency (IEA) reports in its latest annual World Energy Outlook.
But let’s start with the good news.
Lazard’s widely-used yearly benchmarking study on the Levelized Cost of Energy (LCOE) — the cost of power from a plant averaged over its entire lifetime — found that, in the United States, utility-scale solar and onshore wind continue to deliver cheaper and cheaper electricity, as the chart above shows.
The LCOE of onshore wind power has declined 69 percent since 2008 and almost 7 percent since last year. Large-scale solar photovoltaics meanwhile has seen a stunning 88 percent price drop — and 13 percent since 2017.
As a result, both onshore wind farms and big solar projects are both cheaper to build than new natural gas plants.
Significantly, the cost of renewables have dropped so sharply, that building and operating both solar and wind are, in many places, actually cheaper than simply operating an existing coal or nuclear plant.
We have “reached an inflection point” in global power markets, explained George Bilicic, Vice Chair and Global Head of Lazard’s Power, Energy & Infrastructure Group. Moreover, the rapid price drops in storage, especially lithium ion batteries, means “we are beginning to see a clearer path forward for economic viability in storage technologies.”This is how coal dies — super cheap renewables plus battery storage
The bad news, though, is that according to IEA’s latest annual energy report, the sharply declining cost of clean energy, by itself, is not enough to avert catastrophic warming.
We have dawdled for so long ignoring the warnings of top scientists that our current and near-term fossil-based energy infrastructure will, by itself, generate enough carbon pollution to take us to dangerous levels of warming.
So if we are up to avert disaster, we not only need to keep speeding up the use of new clean energy, we also have to speed up the shut down of old dirty energy sources.