STOCK MARKET WATCH - Wednesday, 11 February 2015

[Demeter]

2. 6 charts that show renewable energy is getting cheaper By David Roberts

http://grist.org/climate-energy/renewable-energy-is-getting-cheaper-and-cheaper-in-6-charts/


Things are changing very quickly in the world of renewable energy. The conventional wisdom — that renewables are expensive, that they depend on subsidies, that it’s too costly to integrate them into the grid — is rapidly being rendered anachronistic, though no one seems to have told U.S. policymakers and pundits. So let’s check in on the real cost of renewables. The International Renewable Energy Agency (IRENA), an intergovernmental research organization, recently released its latest report, “Renewable Power Generation Costs in 2014,” and it’s chock full of current info.The news is mostly good...

But first, a quick note. To understand these charts you need to understand the “levelized cost of energy.” LCOE is often used as a kind of summary measure of the overall competitiveness of a particular technology or power plant. It includes capital and fuel costs, operating and maintenance costs, and financing costs, as well as the assumed rate of utilization. It does not include externalized costs, either positive (subsidies) or negative (health or environmental damages). It’s pure apples to apples. IRENA maintains a comprehensive database of LCOE costs for power projects around the world and uses those as its basis of comparison. Here’s the LCOE for different kinds of utility-scale renewable energy projects, in 2010 and 2014:



The tan horizontal band across the chart is the range of LCOEs for fossil-fueled power. As you can see, biomass for power, geothermal, hydro, and onshore wind are now squarely in that range, or even lower. And solar PV, though it ranges widely in costs, is, on average, declining quickly — increasingly it’s also in the fossil-fuel range. (It should be noted that all of these LCOE estimates exclude financial supports. This is straight-up, unsubsidized costs.) Onshore wind, in fact, is now the most competitive form of electricity generation, not just among renewables, but period. Offshore wind and concentrated solar power (CSP) are still taking baby steps. As of 2014, their total global installed capacity is still comparatively tiny — 5 GW and 8 GW, respectively — but their costs are falling and should continue falling as the industries mature. And of course the rapidly falling cost of solar PV is the clean-energy story to beat all clean-energy stories!

Here’s the same LCOE-based comparison, with a twist; in this next chart, IRENA added two key “external” costs. First it added the costs of integrating variable renewable energy into the grid (costs like spinning reserves, improving the grid, etc.), which turn out to be fairly modest, even modeled at 40 percent penetration. And it added the costs of fossil fuel’s health and environmental impacts, using a social cost of carbon ranging from $20 to $80 (which is too low). The net effect of these changes is to make renewables considerably more competitive, mainly by raising the cost of fossil fuel power, as this before-and-after chart shows:








Finally, here’s what IRENA projects will happen to renewable energy costs between now and 2025: