Prices for solar, wind, and battery storage are dropping so rapidly that renewables are increasingly squeezing out all forms of fossil fuel power, including natural gas.
The cost of new solar plants dropped 20 percent over the past 12 months, while onshore wind prices dropped 12 percent, according to the latest Bloomberg New Energy Finance (BNEF) report. Since 2010, the prices for lithium-ion batteries — crucial to energy storage — have plummeted a stunning 79 percent (see chart).
“The economic case for building new coal and gas capacity is crumbling,” as BNEF’s chief of energy economics, Elena Giannakopoulou, told Bloomberg.
At the same time, solar and wind plants — which are increasingly being built with battery storage — are eating into the utilization of existing coal and gas plants, making them far less profitable. For instance, the super-efficient combined-cycle gas turbine (CCGT) plants that have been popular in recent decades, were designed to be used at full power between 60 percent and 90 percent of the time.
But their actual utilization rate (also called the “capacity factor”) has been plummeting in recent years, and is now close to a mere 20 percent in countries as diverse as China, Germany, and India (see chart).
Arizona regulators “recently refused to endorse plans by three power companies that included more natural-gas facilities,” the New York Times reportedWednesday. “Commissioners directed them to make greater use of energy storage and plants that produce zero emissions.”
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