Wednesday, November 15, 2017

Wind, solar & gas cheapest

From Lazard's latest LCOE estimates.  To maintain comparability, Lazard hasn't changed the cost of capital used in these calculations.  But if you were to use the interest rates that are currently available for industrial scale wind and solar plants they would be even cheaper, but gas would only be a little cheaper because so much of its cost is fuel.  Note: these are the unsubsidised costs, but the hidden costs of coal, gas and nuclear are not included.

Since 2008, the cost of solar has dropped by 72%, wind by 48%.  Gas is cheaper too, as fracking has grown,  but whereas gas was the cheapest in 2009, now it's clearly wind and solar.  Gas produces half the CO2 emissions of coal per MW.  But methane is 86 times as potent a greenhouse gas as carbon dioxide over 20 years, and 34 times as potent over 100 years, and fracking causes serious environmental damage.  My guess is that while wind and solar will continue to gain market share, gas's share will peak as soon as battery costs fall far enough, which may only be 5 years away.


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