Latest BNEF analysis finds solar and wind are cheapest forms of generation

Solar and wind are now the cheapest sources of electricity generation in all major economies except Japan, according to research by BloombergNEF (BNEF).

These findings were contained in BNEF’s latest bi-annual Levelized Cost of Electricity analysis, which assesses the cost competitiveness of different power generating and energy storage technologies, excluding subsidies.

The utility scale solar market has seen the benchmark global levelised cost of new PV (non-tracking) drop by 13% to US$60 per MWh from the first half of 2018, after a contraction in the Chinese market created a global wave of cheap equipment.

Meanwhile, BNEF’s benchmark global levelised cost for onshore wind sits at $52 per MWh, down 6% from its preceding analysis of the first six months of the year. Cheaper turbines and a strong US dollar have been attributed to the falling cost of wind.

Onshore wind is now as cheap as $27 per MWh in India and Texas without subsidy, and now outcompetes combined-cycle gas turbine (CCGT) plants supplied by shale gas in most US locations.

In Asia-Pacific, more expensive gas imports mean that new-build CCGT plants with a levelised 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 decarbonising electricity generation in this region.

However, in China and India best-in-class solar and wind plants are now half the cost of new coal plants, which resembles significant progress considering the dominance of coal in the electricity generation of both nations not long ago.