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.”
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.