Present prices of Renewable Energy

Present prices of Renewable Energy

Introduction

Renewable energy is derived from various natural processes, such as the Sun's electromagnetic radiation, tides or heat generation within the Earth. Here is a list of the main types of practically utilized alternative energy sources: 

• Sunlight: the solar photon flux can be converted to heat, electricity or chemical energy;
• Wind: the motion of air molecules can be harvested in wind turbines that spin the shaft of electric generators or in windmills;
• Biomass: organic materials can be used for cooking and heating, as well as to produce electricity and liquid transportation fuels;
• Earth's internal heat: can be used for heating and electricity production;
• Water: potential and kinetic energy of flowing water can be tapped to produce electricity or mechanical tasks.

Note that there is some controversy about classification of nuclear power. Usually it is excluded from the list of renewables. However, it is known, for example, that rivers eroding the Earth crust replenish Uranium dissolved in seawater. Also, nuclear fission in so-called breeder reactors creates more fissile isotopes than it consumes. So, although technically raw nuclear fuels are finite, because of their enormously large amount and because of the above replenishing processes, they might be considered RE as well. After all, bio-fuels are finite too, but they are treated as RE.

Renewable energy

Renewable energy sources are starting to dominate the power sector, with low-carbon alternatives boasting environmental benefits at low costs.  Technological advances and an increased awareness of the dangers posed by climate change are driving the price of renewable energy sources down.

Solar and wind 

The IRENA “Renewable Power Generation Costs in 2017” report found that solar and onshore wind are the cheapest energy sources, reporting that in 2017 wind turbine prices had an average cost of $0.06 per kWh, though some schemes were $0.04 per kWh. The cost of solar photovoltaic (PV) had fallen to $0.10 per kWh. In comparison, electricity generation based on fossil fuels typically falls in a price range of $0.05 to $0.17 per kWh.

Extensive investment and research into these renewable sources have caused prices to continue declining over the years. Between 2010 and 2017, the price of solar PV modules fell by almost three-quarters, while wind turbine prices dropped by half over the same period. Prices are continuing to decline, and a series of record-low auction prices for solar PV, concentrated solar power, onshore wind and offshore wind power were set in 2016-2017.IRENA predicts that within the next two years, solar and wind projects will be able to deliver electricity for as little as $0.03 per kWh.

The cost of generation ., however, is not a accurate indicator of the economic worth of  an technology, both wind and solar have availability issues , also the transmission and  reactive loads requirement add further cost .

Tidal

On the more costly end of renewable energy is tidal power, currently up to ten times more expensive than more established renewable such as wind and solar.Numerous tidal projects have been scrapped in recent years due to high costs, for example the Swansea Bay tidal lagoon in Wales. The UK Government rejected plans for the £1.3bn project in January this year, deeming it too expensive compared to alternatives such as offshore wind farms and nuclear power.

The expense of tidal projects is predominantly due to the fact that the sector is still in the early stages of development, compared with wind and solar which have received far more investment and research to pull down costs and improve efficacy. So far, government bodies have been the only ones to invest in the budding sector, while solar and wind have received support from individuals and smaller organizations.

 Advocates for tidal power stress that while construction costs are high, tidal power has one of the lowest operation and maintenance costs, with studies showing they are usually less than 0.5% of initial capital costs. As such, some see it as an untapped source with potentially great benefits.

Additional storage costs

Despite the growing dominance of solar and wind in the energy sector, the need to develop affordable storage solutions to balance out intermittency issues continues to grow. Although the energy sources are themselves free and infinite, bar on overcast or calm days, the equipment and materials required to collect, store and transport the energy put an additional price tag on these sources.

Financial firm Lazard found that when the cost of batteries and inverters is added to utility-scale PVs for ten hours of storage, the price rises from $46 per MWh to $82, a higher figure than the $60 per MWh and $68 per MWh for coal and natural gas, respectively.

Lazard’s analysis also found that vanadium flow batteries had a minimum levelised cost of storage (LCOS) of $184 per MWh for distribution network applications and $209 per MWh for peaker replacement. These costs for lithium-ion were $272 and $282, respectively.

The firm expressed its belief that the high price of batteries would prevent renewable from completely overtaking traditional power generation sources, saying: “Although alternative energy is increasingly cost-competitive and storage technology holds great promise, alternative energy systems alone will not be capable of meeting the base load generation needs of a developed economy for the foreseeable future.”

Advantages and disadvantages

Not surprisingly, each method of power generation has its pros and cons. RE of course is inexhaustible and environmentally friendly. It has another important advantage. Small individual power generators that are integrated into the grid reduce the impact of blackouts caused by a failure of centralized equipment or distribution lines. The distributed power technologies in general improve the overall system security.
Notwithstanding their clear benefits, all forms of RE have their disadvantages too. Renewable resources are not always available where and when they are needed. For example, hydropower resources are limited by geography and are often located in remote areas. They require installation of expensive electric lines to the cities. Solar and wind power are intermittent by nature. Which brings us to another major technical issue with RE: the storage. One of the problems of electricity is that it cannot be efficiently stored in large quantities for later use. It is unpractical for example to have a battery backup in a gigawatt-scale power plant. Also, while RE systems generally do not produce as much air pollution as fossil fuels, they too have a certain negative impact on the environment. Finally, RE is still more expensive that traditional one. All the above factors are limiting the growth of RE. Currently, the share of renewable energy sources in net energy production is only about 10% worldwide and 8% in the United States. 

Power Plant Type	Cost $/kW-hr
Coal	$0.11-0.12
Natural Gas	$0.053-0.11
Nuclear	$0.096
Wind	$0.044-0.20
Solar PV	$0.058
Solar Thermal	$0.184
Geothermal	$0.05
Biomass	$0.098
Hydro	$0.064

DOE

While raw forms of energy are both free and practically infinite, the equipment and materials needed to collect, process, and transport the energy to the users are neither one. Currently, the RE costs are generally higher than that of fossil-based and nuclear energy. In addition to this, unlike well-established conventional designs, the advancement in different RE technologies still requires substantial investments. The economists often use so-called levelized energy costs (LEC) when comparing different technologies. 
The LEC represents the total cost to build and operate a new power plant over its life divided to equal annual payments and amortized over expected annual electricity generation. It reflects all the costs including initial capital, return on investment, continuous operation, fuel, and maintenance, as well as the time required to build a plant and its expected lifetime. This table compares the US average levelized electricity cost in dollars per kilowatt-hour for both non-renewable and alternative fuels in new power plants, based on US EIA statistics and analysis from Annual Energy Outlook 2017. Note, that the numbers for each source are given for a different capacity factor, which complicates direct comparison. Notwithstanding, I believe these figures are useful in comparing different power generation methods. 

Also note that the values shown in the table do not include any government or state incentives. In other words, they represent the actual cost to the society. We can see that at present natural gas, geothermal and coals are the most economic fuels. However, in future the price of coal-based electricity can nearly double due to government imposed cost on CO₂emissions. Photovoltaic systems are still more expensive than fossil-based ones. The values in the chart represent just the cost of electricity production- the retail prices of course are always higher. 

In conclusion, it is our responsibility to advance alternative power. However, we should remember that low-cost electricity generation is crucial to the economy. It increases income and employment in all sectors, the purchasing power of the consumer, and makes U.S. exports more competitive. RE certainly can supplement conventional power, and its use will likely continue to steadily grow. Nevertheless, realistically speaking, it can't entirely replace non-renewable fuels anytime soon. 

Renewable have costs below fossil fuels

For the first time in history, the production cost of renewables is lower than that of fossil fuels, an industry asset manager has claimed, fossil fuels generated energy costs in the range of $49 and $174 per MWh (Megawatt hours) in G20 energy markets in 2017. Over a comparable period, renewable energy production came in between $35 and $54 per MWh.  the international average cost for hydroelectric projects were more than $50 per MWh, wind power was $51 per MWh, and photovoltaic solar energy was $54 per MWh on average.

Furthermore, it also claimed that renewable energy presents the best alternative to the high cost of nuclear power as well, as governments attempt the decarbonization challenge. The latest photovoltaic energy auctions in Dubai, Mexico, Chile, Abu Dhabi or Saudi Arabia, and onshore wind energy in Brazil, Canada, India or Morocco in 2017 suggested that the standard cost of energy can be reduced to $30 per MWh from 2018 . However, onshore wind energy has already achieved similar costs in projects across Brazil, Canada, Germany, India, Mexico and Morocco, already reaching $30 MWh."

 Renewable energy is already less expensive than conventional energy. From now on, the digital platforms that use the Internet of Things (IoT) and Smart Data will be the next key factor to achieve the objectives of the Paris Climate Agreement and attract more investors. "

The decrease in the cost of renewable energy, which is around 80% lower since 2010, for instance, in the photovoltaic solar sector, has occurred for several reasons. These include technological improvements and the competitive simplicity of renewables, through a broad base of project developers, especially investment funds and banks, optimistic about the unstoppable future of a market whose profitability continues to skyrocket even once the subsidies have ceased, backed by a great social and political support."

 An assessment by ratings agency Moody's that global green bond issuance is set to eclipse $250 billion in 2018, with this year's growth exceeding the record $155 billion of green bonds issued in 2017.

Indigenous sources of energy

Analysis presented above does not consider the impact of the source of energy, in so far as if it is imported or is indigenous. Imported energy imposes a cost and in developing countries this results in balance of payment issues. The impacts of this are felt on the value of currency , financial stability and export competitiveness. If precious resources are diverted to import energy this will crowd out out investments meant to  increase rate of development . All renewable sources of energy are domestic and therefore command a premium when compared to imported fossil fuel options.

Barriers that impede addition of renewable energy

In March 2017, wind and solar accounted for10 percent of all US electricity generation  , it reflected a major achievement for both technologies, which have overcome numerous barriers to become competitive with coal, natural gas, and nuclear power.

But renewables still face major obstacles. Some are inherent with all new technologies; others are the result of a skewed regulatory framework and marketplace. This page explores the barriers to renewable energy in detail, with a focus on wind and solar.

Capital costs

Renewables are cheap to operate, but can be expensive to build. The most obvious and widely publicized barrier to renewable energy is cost—specifically,capital costs, or the upfront expense of building and installing solar and wind farms. Like most renewables, solar and wind are exceedingly cheap to operate—their “fuel” is free, and maintenance is minimal—so the bulk of the expense comes from building the technology. The average cost in 2017 to install solar systems ranged from a little over $2,000 per kilowatt (kilowatts are a measure of power capacity) for large-scale systems to almost $3,700 for residential systems. A new natural gas plant might have costs around $1,000/kW. Wind comes in around $1,200 to $1,700/kw.

Higher construction costs might make financial institutions more likely to perceive renewables as risky, lending money at higher rates and making it harder for utilities or developers to justify the investment. For natural gas and other fossil fuel power plants, the cost of fuel may be passed onto the consumer, lowering the risk associated with the initial investment (though increasing the risk of erratic electric bills).

However, if costs over the lifespan of energy projects are taken into account, wind and utility-scale solar can be the least expensive energy generating sources . As of 2017, the cost (before tax credits that would further drop the costs) of wind power was $30-60 per megawatt-hour (a measure of energy), and large-scale solar cost $43-53/MWh. For comparison: energy from the most efficient type of natural gas plants cost $42-78/MWh; coal power cost at least $60/MWh.

Even more encouragingly, renewable energy capital costs have fallen dramatically since the early 2000s, and will likely continue to do so. For example: between 2006 and 2016, the average value of photovoltaic modules themselves plummeted from $3.50/watt $0.72/watt—an 80 percent decrease in only 10 years.

Siting and transmission Selecting an appropriate site for renewables can be challenging. Nuclear power, coal, and natural gas are all highly centralized sources of power, meaning they rely on relatively few high output power plants. Wind and solar, on the other hand, offer a decentralized model, in which smaller generating stations, spread across a large area, work together to provide power. Decentralization offers a few key advantages (including, importantly, grid resilience), but it also presents barriers: siting and transmission. Siting is the need to locate things like wind turbines and solar farms on pieces of land. Doing so requires negotiations, contracts, permits, and community relations, all of which can increase costs and delay or kill projects. Transmission refers to the power lines and infrastructure needed to move electricity from where it’s generated to where it’s consumed. Because wind and solar are relative newcomers, most of what exists today was built to serve large fossil fuel and nuclear power plants. But wind and solar farms aren’t all sited near old nuclear or fossil fuel power plants  . To adequately take advantage of these resources, new transmission infrastructure is needed—and transmission costs money, and needs to be sited. Both the financing and the siting can be significant barriers for developers and customers, even when they’re eager for more renewables—though, again, clean energy momentum is making this calculation easier.

Market entry

US electricity sources, 2016. Renewables face stiff competition from more established, higher-carbon sectors. For most of the last century US electricity was dominated by certain major players, including coal, nuclear, and, most recently, natural gas. Utilities across the country have invested heavily in these technologies, which are very mature and well understood, and which hold enormous market power. This situation—the well-established nature of existing technologies—presents a formidable barrier for renewable energy. Solar, wind, and other renewable resources need to compete with wealthier industries that benefit from existing infrastructure, expertise, and policy. It’s a difficult market to enter. New energy technologies—startups—face even larger barriers. They compete with major market players like coal and gas, and with proven, low-cost solar and wind technologies. To prove their worth, they must demonstrate scale: most investors want large quantities of energy, ideally at times when wind and solar aren’t available. That’s difficult to accomplish, and a major reason why new technologies suffer high rates of failure. Increased government investment in clean energy—in the form of subsidies, loan assistance, and research and development—would help.

 Unequal playing field

Oil Change International estimates that the United States spends $37.5 billion on subsidies for fossil fuels every year. Through direct subsidies, tax breaks, and other incentives and loopholes, US taxpayers help fund the industry’s research and development, mining, drilling, and electricity generation.  For decades, the fossil fuel industry has used its influence to spread false or misleading information about climate change—a strong motivation for choosing low-carbon energy sources like wind or solar (in addition to the economic reasons). Industry leaders knew about the risks of global warming as early as the 1970s, but recognized that dealing with global warming meant using fewer fossil fuels. They went on to finance—and continue to fund—climate disinformation campaigns, aimed at sewing doubt about climate change and renewable energy. Their efforts were successful. Despite widespread scientific consensus, climate action is now a partisan issue in the US congress, complicating efforts to move from fossil fuels to clean energy. The disconnect between science and policy means that the price we pay for coal and gas isn’t representative of the true cost of fossil fuels (ie, it doesn’t reflect the enormous costs of global warming and other externalities). This in turn means that renewables aren’t entering an equal playing field: they’re competing with industries that we subsidize both directly (via government incentives) and indirectly (by not punishing polluters). Emission fees or caps on total pollution, potentially with tradable emission permits, are examples of ways we could use to help remove this barrier.

Reliability misconceptions

When done correctly, reliability isn't a concern with wind and solar—it's actually a strength. Renewable energy opponents love to highlight the variability of the sun and wind as a way of bolstering support for coal, gas, and nuclear plants, which can more easily operate on-demand or provide “base load” (continuous) power. The argument is used to undermine large investments in renewable energy, presenting a rhetorical barrier to higher rates of wind and solar adoption. But reality is much more favorable for clean energy. Solar and wind are highly predictable, and when spread across a large enough geographic area—and paired with complementary generation sources—become highly reliable. Modern grid technologies like advanced batteries, real-time pricing, and smart appliances can also help solar and wind be essential elements of a well-performing grid. Tests performed in California, which has some of the highest rates of renewable electricity use in the world, provide real-world validation for the idea that solar and wind can actually enhance grid reliability. A 2017 Department of Energy report confirmed this, citing real-world experience and multiple scientific studies to confirm that the United States can safely and reliably operate the electric grid with high levels of renewables. Many utilities, though, still don’t consider the full value of wind, solar, and other renewable sources. Energy planners often consider narrow cost parameters, and miss the big-picture, long-term opportunities that renewables offer. Increased awareness—and a willingness to move beyond the reliability myth—is sorely needed.

Update 

The International Renewable Energy Agency (IRENA) believes wind and solar will be equal or cheaper than fossil fuels by 2020.

Prices could be as low as three cents per kilowatt-hour for onshore wind and solar photo voltaic projects over the next two years. The average by 2020 is expected to be around five cents for onshore wind and six cents for solar photovoltaic auctions.

Hydro power was the cheapest at five cents per kilowatt-hour, onshore wind at six cents, and bio energy and geothermal sources at seven cents. Solar projects are still high in comparison at 10 cents per kWh

Wind takes a beating from solar   

Sixteen solar projects have been selected at an average price of €54.94/MWh (6.3 c/kWh). They were "more competitive" than any of the wind power projects the tender was launched as an experiment to test the advantages and disadvantages of technology-neutral tenders as promoted by the European Union.   A similar technology-neutral tender in Germany in April yielded the same result, with solar projects winning all of the available capacity.  Wind and solar are in fact not competitors and complement each other, the latest trends are to have hybrid solar and wind power plants.

 :Indigitization : June,30,2019: India has placed special emphasis on harnessing the abundant Solar energy the country receives and producing power through it. With the government of India’s focused efforts in democratising the use of Solar energy, the International Renewable Energy Agency (IRENA) survey in its research found out that India is the world’s cheapest producer of Solar power.

Owing to low-cost panel imports from China, abundant land and low wage labour, the cost of building large-scale solar installations in India fell by 27 per cent in 2018, Year-on-Year. The cost of large-scale installations in Canada is highest amongst the countries involved in producing power using Solar energy, almost thrice that of India’s cost.

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Status of renewable: July, 18, 2019: In recent years, the world has marched towards renewable energy. According to a new report by the International Renewable Energy Agency (IRENA), unsubsidized renewable energy is now most frequently the cheapest source of energy generation. The report finds that the cost of installation and maintenance of renewables, which was an important stumbling block to mass adoption, continues on a downward trajectory.

Adding to existing efforts made by governments and businesses, these lower costs are expected to propel the mass adoption of renewables even further. The report further touches on the importance of renewables in sustainable development and the need for governments to help achieve the climate goals of the Paris Agreement, coming just months before the United Nations’ Climate Action Summit being held in Abu Dhabi in September this year.

Among other findings the IRENA report highlights that:

• Onshore wind and solar PV power are now, frequently, less expensive than any fossil-fuel option, without financial assistance.
• New solar and wind installations will increasingly undercut even the operating-only costs of existing coal-fired plants.
• Low and falling technology costs make renewables the competitive backbone of energy decarbonization – a crucial climate goal.
• Cost forecasts for solar PV and onshore wind continue to be revised as new data emerges, with renewables consistently beating earlier expectations.

Further data from REN21’s Renewable Global Status Report show that over one fifth of global electrical power production is  now generated from renewables.

Renewables can’t yet provide all of our energy or even most of it, but that’s mostly due to a lack of effort by governments. And we will still need some sort of baseline load input to back it up, but that need not be generated using fossil fuels (nuclear power provides a safer alternative for a minimum baseline load). But like nearly all technology, the more it’s adopted and used, the cheaper it becomes. And we can use it without the emission of greenhouse gases that cause global warming and the innumerable other forms of environmental damage that comes from fracking for natural gas, leaching tar sands oil, coal ash ponds and a thousand other things.

What we need is a massive infrastructure program to speed up the adoption and use of solar and wind technology, even bigger than the Tennessee Valley Authority project. It will lead to a huge number of new, good paying jobs and the first serious effort to transition to a 21st century power generation revolution.