Solar Could Beat Coal to Become the Cheapest Power on Earth In Less Than a Decade (bloomberg.com)

Solar power is now cheaper than coal in some parts of the world. In less than a decade, it's likely to be the lowest-cost option almost everywhere, reports Bloomberg. From the article: In 2016, countries from Chile to the United Arab Emirates broke records with deals to generate electricity from sunshine for less than 3 cents a kilowatt-hour, half the average global cost of coal power. Now, Saudi Arabia, Jordan and Mexico are planning auctions and tenders for this year, aiming to drop prices even further. Taking advantage: Companies such as Italy's Enel SpA and Dublin's Mainstream Renewable Power, who gained experienced in Europe and now seek new markets abroad as subsidies dry up at home. Since 2009, solar prices are down 62 percent, with every part of the supply chain trimming costs. That's help cut risk premiums on bank loans, and pushed manufacturing capacity to record levels. By 2025, solar may be cheaper than using coal on average globally, according to Bloomberg New Energy Finance. The solar supply chain is experiencing "a Wal-Mart effect" from higher volumes and lower margins, according to Sami Khoreibi, founder and chief executive officer of Enviromena Power Systems. The speed at which the price of solar will drop below coal varies in each country. Places that import coal or tax polluters with a carbon price, such as Europe and Brazil, will see a crossover in the 2020s, if not before. Countries with large domestic coal reserves such as India and China will probably take longer.

Comments

Re:What about at night?

[Rei]

No. But it's not prohibitively expensive, generally adding a couple cents per kWh to your total costs**. The amount of peaking/storage required depends on a lot of factors, including climate, diversity of generation (e.g. wind + solar has much higher statistical reliability than just wind or solar, as they tend to run counter to each other), and the amount of long distance transmission (HVDC/HVAC), for 1) geographic diversity of weather, 2) sharing common peaking resources, and 3) timeshifting of loads/generation. A recent study in nature estimates that a nationwide US HVDC network would cost 0,3 cents per kWh but save 1,1 cents per kWh in generation/peaking hardware costs. The cost of peaking (and type) depends on location. Hydroelectric turbine house uprating makes for very cheap peaking where available (transforming baseload hydro into peaking hydro). Pumped hydro can be affordable, but only in limited areas. Batteries are marginal at present, but are likely to become highly competitive over the next decade. In the US, where natural gas is cheap and plentiful, the vast majority of new peaking capacity is NG. In countries where natural gas is expensive, other fossil fuels are used.

Also note that up to a certain level of penetration, solar actually does more to help remove variable generation (load following plants) than it imposes (peaking), as daytime loads are higher than night, and are higher on sunny days than cloudy days.

** - A peaker that's used only several hours a year may charge $2/kWh or so... but you're not buying a lot of kWh from it. A load following plant that's used a bunch every day may only charge $0,1/kWh... but you're buying a lot of kWh from it. It all depends on what sort of power you're needing to buy.