SOLAR IS THE CHEAPEST ELECTRICITY IN HISTORY
A story in the renew economy
The International Energy Agency has conceded that solar power is low cost, in fact it is now “THE CHEAPEST ELECTRICITY IN HISTORY.” The WORLD ENERGY OUTLOOK 2020 sets out an agenda where we need to try and cap average global warming to a maximum 1.5°C rather than the 2.0°C previously suggested. This means hitting zero emissions by 2050, not 2070. Emmissions reduction is proposed by a huge increase in wind and solar, a surge in electric vehicle useage and our need to drastically change our behaviour. The IEA has given this a thumbs up because after recalculating their costings from 2 years ago, they have revalued the cost of solar power at half of their previous estimates. Yes. Half. 50%. A lot cheaper. How so... It’s called the ‘cost of capital” and that basically means ‘the cost to produce a MWh of electricity. Solar can now be delivered at less than $20 per MWh... a recent auction in Portugal delivered it at only 13c per MWh.
Is it because the sun is getting hotter or the parts are getting cheaper? Ramez Naam backs this up on his blog with a post SOLAR’S FUTURE IS INSANELY CHEAP. A great article if you like a graph... he shows that one reason for the price drop is through learning. Wright’s Law - ‘learning by doing’ leading to reduction of labour, time and energy costs. He predicts we will routinely start to see a base rate of 4-5c kwh. For reference, it’s hard to find any verifiable facts but one blog (advanced energy economy) agrees (using Lazard’s ‘Levelized Cost of Energy Comparison’ figures) showing thet large scale solar came down in price 13% from last year and a whopping 88% since 2009. Since we are posting this on Melbourne cup day.. 2009 was the year that the Melbourne cup was won by SHOCKING.
Lazard prices solar at $36 per MW/h and coal fired energy reaching up to $143 per MW/h. With subsidies they set wind and solar at around $14 per MWh while the very best that coal can do is $36 per MWh. You get the picture... SOLAR IS THE CHEAPEST whilst also being the best behaved! How can this be? It follows if we think about anything relatively new. The cost to begin with is high but as its use is more prevalent the costs reduce. I found a story by Investopedia called 7 Products That Are Getting Cheaper cheaper . They list these as Televisions, Smartphones, Laptops and tablets, Car rentals, Hotels and motels, E readers, and clothing. Sadly the bottom line (petrol, food and gold) is increasing but let’s add SOLAR to the the list of Products That Are Getting Cheaper!
Naam finishes up his post with some reality... “the sun doesn’t always shine. To power evenings and night times, we’ll need to continue progress on cheap energy storage.” His big takeaway is very positive, “SOLAR IS AMAZING. IT ISN’T A PANACEA The future solar costs we’ve just projected have massive implications. They give us hope for cleaning up our electricity system and providing clean power for the electric vehicles that will dominate ground mobility in the future. They give us hope for being able to use ultra- cheap clean electricity to decarbonize electricity or produce energy carriers like hydrogen at a cost low enough to help us do so.”