Utilities that need to build new power generation facilities or replace old ones are going to have a hard time justifying anything but renewable energy in 2017 and beyond. Investment bank Lazard recently released its 11th analysis of the cost of new electricity generation, titled Lazard’s Levelized Cost Of Energy Analysis–Version 11.0, and showed that wind and solar energy are now cheaper than diesel, nuclear, coal, and in most cases natural gas.
Utilities and regulators are going to be hard-pressed to justify anything but renewable energy generation in the future. From Maine to Hawaii, the U.S.’s energy future is renewable.
The table below shows Lazard’s analysis of the cost, on a per kWh basis, to build new power plants with different fuel sources and technologies. You can see that the lowest cost option is wind at 3 cents per kWh, followed by gas combined cycle that’s as cheap as 4.2 cents per kWh, and solar, which costs between 4.3 cents and 5.3 cents per kWh.
|Energy source||Low-End Estimate||High-End Estimate|
|Crystalline Utility-Scale Solar PV||4.6 cents per kWh||5.3 cents per kWh|
|Thin-Film Utility-Scale Solar PV||4.3 cents per kWh||4.8 cents per kWh|
|Wind||3 cents per kWh||6 cents per kWh|
|Coal||6 cents per kWh||14.3 cents per kWh|
|Natural Gas Combined Cycle||4.2 cents per kWh||7.8 cents per kWh|
|Nuclear||12.2 cents per kWh||18.3 cents per kWh|
|Diesel||19.7 cents per kWh||28.1 cents per kWh|
What you’ll also notice is that the range of costs is much wider for fossil fuels like natural gas. That’s because construction costs can be different depending on the state, fuel prices, and how often the plant is being used. Renewable energy, on the other hand, gets to cut to the front of the line on the grid, meaning nearly 100% of its electricity production is used, allowing for predictable electricity pricing.
What’s clear is that diesel, nuclear, and coal are all higher cost than both wind and solar energy on a per kWh basis. No matter how you slice it, renewable energy is winning versus fossil fuels on economics.
I’ll also point out that there’s no fuel cost risk for renewable energy. The wind and sun are zero-cost fuel sources, unlike extracted fuels, which could conceivably spike from current levels.
It wasn’t long ago that Lazard’s analysis wasn’t so favorable to renewable energy. In 2010, version 4.0 of Lazard’s levelized cost of energy study had wind costs at 6.5-11.0 cents per kWh and solar at 13.4-19.4 cents per kWh. Natural gas, coal, and nuclear all beat solar on a cost basis, and in some cases beat wind.
|Energy source||Low-End Estimate||High-End Estimate|
|Crystalline Utility-Scale Solar PV||13.4 cents per kWh||15.4 cents per kWh|
|Thin-Film Utility-Scale Solar PV||13.4 cents per kWh||18.8 cents per kWh|
|Wind||6.5 cents per kWh||11.0 cents per kWh|
|Coal||6.9 cents per kWh||15.2 cents per kWh|
|Natural Gas Combined Cycle||6.7 cents per kWh||9.6 cents per kWh|
|Nuclear||7.7 cents per kWh||11.4 cents per kWh|
Clearly, the tides have shifted in the energy industry. Fossil fuels is at best flat and in some cases getting more expensive, while renewable energy costs are coming down every year. There’s no indication these trends will reverse course, and investors need to consider whether they’re using renewable energy’s growth as a tailwind for their portfolio or fighting the clear trends in energy. If these charts are any indication, fossil fuels’ days may be numbered.
The Public Service Company of New Mexico is asking for project proposals, including renewables and battery storage, designed to help reach its coal-free goal by 2031.
A joint study by Finland’s Lappeenranta University of Technology and Energy Watch Group presented on the sidelines of the COP23 talks in Bonn demonstrates that a global transition to 100% renewable electricity could be achieved by 2050, and would be more cost effective than the current electricity system.
The study, ‘Global Energy System Based on 100% Renewable Energy – Power Sector’ was presented during the Global Renewable Energy Solutions Showcase event, a sideline to the United Nations Climate Change Conference COP23 currently underway in Bonn.
The study’s key overall finding is that a global shift to 100% renewable electricity is feasible with current technology, and would be more cost effective than the current system led by fossil fuels and nuclear generation.
The study found that in a projected scenario for energy demand in 2050, 100% could be met by current renewable technologies, at a global average LCOE of €52/MWh, compared with 2015’s average LCOE of €70.
In EWG’s 2050 scenario, solar PV covers 69% of electricity demand, wind 18%, hydro 8% and bioenergy 2%. The study predicts that wind will briefly overtake solar in the 2020s, before further price drops put solar back in the lead.
Storage is outlined as the key supporting technology for solar, with around 31% of total demand covered by storage technologies. 95% of this is projected to come from short term storage provided by batteries, with power to gas conversion providing seasonal storage.
“There is no reason to invest one more dollar in fossil or nuclear power production,” exclaims EWG President Hans Josef. “All plans for a further expansion of coal, nuclear, gas and oil have to be ceased. More investments need to be channeled in renewable energies and the necessary infrastructure for storage and grids. Everything else will lead to unnecessary costs and increasing global warming.”
The report is based on an original model developed by Lappeenranta University of Technology, which calculates the most cost-effective mix of technologies based on available resources in 145 regions for a full reference year. The full study is published here.
Only time will tell whether this study’s recommendation will translate into reality. As lead author Christian Breyer sums up: “Energy transition is no longer a question of technical feasibility or economic viability, but of political will.”
BRIDGETOWN, Barbados (CMC) — The Barbados government says independent power producers interested in supplying electricity to the national grid will be able to apply for licences by early next year. Energy Minister Darcy Boyce said that recommendations on licensing systems for these producers should be in hand by the end of the year and that proposals for pricing of renewable energy would also go before the Fair Trading Commission early next year.
“We can give certainty to investors of what they will earn,” he said, adding that the recommendations on pricing will be made after stakeholder consultations.
Boyce was speaking at a signing ceremony between the Division of Energy and Enermax Limited to facilitate the installation of solar photovoltaic systems at 28 community centres and nine polyclinics.
The project, which will be implemented over the next three months, forms part of the Disaster Risk and Energy Access Management (DREAM) Project funded by the Global Environmental Facility (GEF) with project support from the United Nations Development Programme (UNDP).
Its primary objectives are to reduce greenhouse gas emissions through the use of renewable energy and to strengthen Barbados’ disaster risk response by promoting decentralised photovoltaic electricity generation with battery back-up.
Boyce said that eventually he would like to see all community centres, polyclinics, the Queen Elizabeth Hospital and all schools with renewable energy systems.
He said this would result in a reduction in electricity costs, provide critical battery support when there were outages and ensure that communities and schools were not impacted in carrying out their programmes because of high electricity bills.
Prime Minister Andrew Holness says Jamaica must capitalise on the availability of renewable energy. He explained that the country would be in a far better position if it could convert naturally occurring forces into energy.
“It is possible for Jamaica to go to approximately 50 per cent of its energy needs provided by alternatives,” Holness declared during a tour of BMR Jamaica Wind Limited in Potsdam, St Elizabeth, on Wednesday.
BMR Jamaica Wind Limited is the builder, owner and operator of Jamaica’s largest privately funded renewable energy project. The 36.3MW wind-generating facility has been in operation since July 1, 2016. At a cost of US$89.9 million, this represents a major investment in the parish of St Elizabeth.
“From a policy perspective, we would much prefer to have more of our energy locally generated, and from that perspective, renewables are very important to us,” said Holness.
He pointed out that there is great potential between the parishes of Manchester and St Elizabeth for an expansion in wind-generating plants and that the significant investment made by BMR Limited is an indication that there can be even greater investment in wind energy in Jamaica.
Meanwhile, the Prime Minister said that the Government is doing an integrated resource plan which will project what are the country’s future needs. In addition, the plan will incorporate how the country can supply those future needs integrating renewables, in particular wind and solar.
“Of course, the problem with renewables is the intermittency of the supply, and even that can be overcome with battery technology, which has increased and improved, and so I hold a very optimistic view of the future of energy supply in Jamaica. We are now looking at expansion in solar,” added the Prime Minister.
According to Holness, another solar plant will be opened very soon and the Government is also examining waste energy as a solution.
The BMR Jamaica Wind project holds the distinction of being the first project funded in Jamaica by the Overseas Private Investment Company (OPIC). US$62.7 million was provided by OPIC and US$20 million from the International Finance Company (IFC).
The project is the recipient of the OPIC impact award 2016, as well as, the CREF Wind Project of the Year 2017.
A federal trade panel is recommending that Trump impose tariffs as high as 35 percent on solar power technology.
These range from an immediate 30 percent tariff on all imported solar modules to a four-year quota system that allows the import of up to 8.9 gigawatts of solar cells and modules in the first year.
The ITC made a preliminary finding in September that domestic solar manufacturers had been harmed by cheap imports after a complaint brought by bankrupt Georgia-based producer Suniva Inc in April, says another Reuters article.
“The US solar industry let out a collective sigh of relief” as the ITC’s recommendations were less than half what Suniva Inc requested, says Bloomberg.
Other US solar companies had been bracing for higher duties, which they said would have disrupted the $29bn industry, stifling installations and triggering job cuts.
Trump will make a final decision on the restrictions later this year.
Minister without portfolio with responsibility for water, works and housing Dr Horace Chang says the housing sector must be governed by regulations and practices that are sustainable, climate-resilient and will ensure the safety and security of Jamaicans.
He made the comments ahead of the regional housing conference to be hosted by the Ministry of Economic Growth and Job Creation, October 18-20 at the Iberostar Rose Hall Suites Hotel, Montego Bay.
The inaugural conference, themed ‘Providing Safe, Legal and Affordable Housing for All: From Policy to Implementation’, is expected to expose some of the issues and, where possible, bring solutions to the housing market. It will also identify best practices that can be used to improve service delivery and innovative approaches to housing.
Areas to be discussed include housing costs and financing, building technology within a changing environment, housing and land tenure, and housing sector management.
“The conference comes at an opportune time given the need to ensure that our houses are built with the best quality materials, which are environmentally friendly, structurally sound and climate-resilient,” stated Minister Chang.
He said these considerations are even more important considering recent devastating hurricanes which have impacted several islands in the Caribbean.
“This need is even more urgent in the face of climate change as our construction industry must adapt to the new realities, and must ensure that our buildings are robust and can withstand the more intense impacts of climate change, with its extreme weather events,” he explained.
In the meantime, Chief Technical Director at the MEGJC with responsibility for water, works and housing Doreen Prendergast said the regional conference has received overwhelming local and international support.
She indicated that representatives from St Lucia, Barbados, Guyana, World Bank, IDB, Cities Alliance, Habitat for Humanity and a representative from the US Department of Housing and Urban Development are scheduled to attend, and in some instances make presentations.
“There is a great need for this type of forum because of the challenges within the housing sector,” said Prendergast. “Challenges pertaining to governance, security of tenure, and housing need and demand that are not being satisfied.”
The ministry has received 26 abstracts from academia for the conference, which are intended to provide an avenue for academia to help chart the policy and planning of the sector.
Petroleum Corporation of Jamaica (PCJ) has got foreign backing for a prefeasibility study on the prospect of setting up another wind farm, but one that would be anchored out at sea.
An American outfit called Keystone Engineering Inc has been invited to do the study, which PCJ Group General Manager Winston Watson indicated should be finalised by around December 2018.
The study for the offshore wind farm is being financed by a grant from the US Trade and Development Agency (USTDA).
“Preliminary work should begin during the final quarter of 2017 and the study is scheduled to last for 12 months,” said Watson. “The results of the study will give an indication of the cost and viability of developing an offshore wind farm for Jamaica,” he told Gleaner Business.
The study is expected to evaluate the viability of installing the wind farm, which would represent one of the first offshore wind installations in Jamaica and the greater Caribbean region.
USTDA links US businesses to export opportunities by funding project-planning activities, pilot projects, and reverse trade missions. The US agency said in a release on the project that the development of the wind farm offers potential export opportunities for a range of American equipment and services related to the design, development, and operation of offshore wind power generation and transmission infrastructure.
Keystone is a Louisiana-based energy firm specialising in the engineering, design, procurement, project management and construction support for offshore wind and oil and gas platforms. The company was the foundation design-engineer for the first offshore wind farm installed in the United States, the 30 MW Block Island Wind Farm off the coast of Rhode Island, USTDA noted.
Watson told Gleaner Business that it was the US agency that approached the PCJ about overseeing the implementation of a grant-funded feasibility study on the prospective offshore wind farm.
He did not indicate the size of the grant, who would develop the facility, nor what the plans were beyond the study.
“At this point it is still too early to comment on the ownership or operational arrangements for any future projects that might be implemented as a result of the study,” the PCJ boss said.
The PCJ currently owns and operates the Wigton wind farm, based at Rose Hill in Manchester. The facility, first established in 2004 and expanded over time, now has generating capacity of nearly 63 MW. Wigton’s total output is now 164,775 MWh per year. It accounts for 6.2 per cent of installed capacity on the national power grid, and 3.7 per cent of Jamaica’s electricity generation
Wigton sells the electricity it generates to the Jamaica Public Service Company, operator of the national grid.
As for the offshore farm, Watson said it was possible the facility could feed both local energy needs and exports.
“It is anticipated that any facilities that may result will provide energy for domestic usage,” he added.
In the USTDA release, Watson was quoted as saying the study would “help the PCJ to get valuable data that can attract overseas investment for the development of our offshore wind resources”.
During remarks delivered to a climate change conference at Yale University, Academy-Award-winning actor and activist Leonardo DiCaprio announced his foundation’s largest-ever portfolio of environmental grants, which includes $120,000 for U.S.-based solar nonprofit RE-volv.
At the Tuesday event, hosted by former Secretary of State John Kerry’s Kerry Initiative, DiCaprio announced that the Leonardo DiCaprio Foundation (LDF) awarded $20 million in new grants to more than 100 organizations. According to an LDF press release, the grants have been awarded to help wildlife and habitat conservation, to aid in the defense of indigenous rights, and to support innovative grass-roots efforts aimed at combating climate change and solving complex environmental issues.
During his address at the conference, DiCaprio – LDF founder and chairman and a U.N. Messenger of Peace for Climate Change – said, “We are proud to support the work of over 100 organizations at home and abroad. These grantees are active on the ground, protecting our oceans, forests and endangered species for future generations – and tackling the urgent, existential challenges of climate change.”
DiCaprio went on to push for urgent action to drive a large-scale, global shift from a reliance on fossil fuels to a world powered by renewable energy, saying, “There exist today many proven technologies in renewable energy, clean transportation, and sustainable agriculture, that we can begin to build a brighter future for all of us.”
As part of its major new round of grants, LDF will provide a $120,000 award to the solar nonprofit RE-volv in an effort to expand access to affordable solar energy for nonprofit organizations around the U.S. In a separate press release, RE-volv says the partnership will provide match funding for RE-volv’s unique crowdfunding platform, allowing donors the opportunity to double their contributions with the support of DiCaprio’s foundation.
This is the largest grant to date for RE-volv, a two-time awardee of the U.S. Department of Energy’s SunShot Initiative. RE-volv supports solar energy projects for nonprofits that lack access to financing options. According to the group, an estimated 1.5 million nonprofits in the U.S. face financial barriers to obtaining solar power, as they do not qualify for solar tax credits or are too small to attract traditional investors. RE-volv works to help bridge this funding gap for organizations that provide valuable public services to vulnerable communities, including homeless shelters, schools, community centers, and houses of worship.
“RE-volv is working to make sure that the benefits of solar can reach everyone, including nonprofit organizations and the people they serve,” says Andreas Karelas, executive director of RE-volv. “Thanks to this generous grant from the Leonardo DiCaprio Foundation, RE-volv will be able to scale its impact and bring solar to even more nonprofits around the country.”
As the group explains, RE-volv’s crowdfunding platform employs a revolving fund. Donors select a specific nonprofit to support, and as the project pays back dividends through a solar lease agreement, the user can then reinvest in new solar projects through the RE-volv platform. RE-volv says this pay-it-forward model helps to accelerate solar energy deployment in local communities while keeping donors engaged in solar projects.
“The Leonardo DiCaprio Foundation is excited to support RE-volv,” says Gregory Lopez, LDF’s Climate Program Director. “Not only is their work important in deploying solar energy and reducing greenhouse gasses, [but also] their unique model provides an introduction of accessible, renewable energy to new communities.”
To date, RE-volv says it has raised over $300,000 from over 1,000 people in 22 countries. It has crowdfunded 10 solar projects (150 kW of capacity) in four states, include Harbor House in Oakland, which serves refugee, immigrant, and low-income families with after-school programs and ESL classes; and Morris Chapel Baptist Church, the oldest African American Church in Philadelphia. Thanks to the solar projects, grantees are expected to save between 15% and 40% on their electric bills. In total, these 10 nonprofits will save more than $1.5 million over the life of their solar energy systems. RE-volv says its solar revolving fund, the Solar Seed Fund, is now worth $650,000 in future lease payments from these 10 projects – payments which will be used to finance at least 20 more solar energy projects.
In addition to financing projects, RE-volv trains college students and community volunteers to become Solar Ambassadors, who in turn lead the on-the-ground efforts to deploy solar. RE-volv claims it has also educated 10,000 people about solar energy through training, outreach, and more than 100 events.
Among many other LDF-highlighted grantees are the Solutions Project, whose Fighter Fund and Leadership Fund provide direct grants to community organizations across the U.S. that are fighting for 100% renewable energy, and SunFunder, whose Beyond the Grid Solar Fund vehicle provides affordable access to solar in developing countries in Africa and South Asia. More information on LDF’s $20 million round of new grants is available here.