The International Energy Agency is increasingly clearer about it. The electricity generation costs of the major renewable sources, solar photovoltaic and wind power have fallen so much in the last five years that they confirm that a new installation of these technologies is already more competitive compared to new power plants based on fossil fuels.
This is the main conclusion of the eighth edition of the IEA report, “Costs of Generating Electricity 2015” which highlights the particularly sharp downturn of photovoltaics.
The report also reveals that nuclear power plants also produce cheaper electricity than coal and gas. This report has been developed together with the Nuclear Energy Agency. Compared to the previous edition, published five years ago, it is worth noting that the fall in the cost of renewable generation and stagnation in the price of new nuclear power plants, have helped curb inflation of costs of electricity generation of the last five years.
Renewables get cheaper
The analysis is based on data from 181 plants in 22 countries. The technologies studied are natural gas, coal, nuclear, solar photovoltaic energy, offshore and onshore wind, solar thermal, hydro, geothermal, biomass / biogas and cogeneration.
In the previous edition of the study, in 2010, the price of producing a megawatt hour with photovoltaic plants moved in a wide corridor from 200 to $ 1,000, depending on the facilities (technology, its location, its regulatory framework), with an average around $ 500. Five years later, and based on the data of 38 solar plants, the range of estimates had been reduced to between 100 and 300 dollars per megawatt hour, with an average slightly below with 200.
For onshore wind, with a sample of 21 plants, the spread between the most expensive and the cheapest was shortened but much more moderately, with an average that had also fallen well below 100 euro megawatt hour. With the latest data from 2014 and early 2015, in the best case scenario, producing one megawatt with wind turbines costs from US $ 33 in the U.S.A. (the cheapest country of those studied) to $ 135 in Japan (the most expensive).
Scarcity of fossils
According to the report, in conventional energy sources, costs in five years have increased globally, particularly in coal thermal power plants due to changes in fuel prices, but also due to the change in some variables used for the calculation. The cheapest of all these, in the most favorable financial conditions is nuclear, which is the most capital intensive (for the large amount of investment needed for the construction of the plants and how little its fuel for operation, uranium costs,), and always with the assumption of $ 30 per ton of carbon emitted.
So in the best case, a megawatt hour needs $ 29 at a nuclear plant in South Korea (the cheapest country) and $ 64 in the United Kingdom (the most expensive). In coal plants, always with the most favorable financial conditions the fork goes from $ 66 per megawatt hour in Germany to 95 in Japan. As for natural gas, the band is between $ 61 US and 133 in Japan.