10 December 2018    

Plunging Prices Mean Building New Renewable Energy Is Cheaper Than Running Existing Coal

Original/Full Article to be found here

Written by

Megan Mahajan

Megan is a Policy Analyst at Energy Innovation, focused on its Energy Policy Solutions program and communications outreach.

new report reveals 42% of global coal capacity is currently unprofitable, and the United States could save $78 billion by closing coal-fired power plants in line with the Paris Climate Accord’s climate goals.  This industry-disrupting trend comes down to dollars and cents, as the cost of renewable energy dips below fossil fuel generation.

Across the U.S., renewable energy is beating coal on cost: The price to build new wind and solar has fallen below the cost of running existing coal-fired power plants in Red and Blue states.  For example, Colorado’s Xcel will retire 660 megawatts (MW) of coal capacity ahead of schedule in favor of renewable sources and battery storage, and reduce costs in the process.  Midwestern utility MidAmerican will be the first utility to reach 100% renewable energy by 2020 without increasing customer rates, and Indiana’s NIPSCO will replace 1.8 gigawatts (GW) of coal with wind and solar.

Lazard’s annual Levelized Cost of Energy (LCOE) analysis reports solar photovoltaic (PV) and wind costs have dropped an extraordinary 88% and 69% since 2009, respectively.  Meanwhile, coal and nuclear costs have increased by 9% and 23%, respectively.  Even without accounting for current subsidies, renewable energy costs can be considerably lower than the marginal cost of conventional energy technologies.

In other words, customers save money when utilities replace existing coal with wind or solar .

And clean energy generation costs will only continue to fall.  The National Renewable Energy Laboratory projects utility solar PV costs will decline 60% by 2050 under mid-level forecasts assuming continued industry growth, and technological breakthroughs could cut costs up to 80% by 2050.  Similarly, its onshore wind analysis forecasts a 30% cost decline by 2050, which could be up to 58%-64% with breakthroughs.
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