The rapidly dropping cost of renewable energy has upended energy economics in recent years, with new solar and wind plants now significantly cheaper than coal power.
But new research shows another major change is afoot: The cost of batteries has been declining so unexpectedly rapidly that renewables plus battery storage are now cheaper than even natural gas plants in many applications, according to a report released this week by Bloomberg New Energy Finance (BNEF).
BNEF analyzed pricing data from almost 7,000 power projects in 46 countries that span 20 energy technologies, including coal, gas, nuclear, battery storage, solar photovoltaics (PV), and wind.
They report that electricity prices “for onshore wind, solar PV and offshore wind have fallen by 49 percent, 84 percent and 56 percent respectively since 2010.” Costs for lithium-ion battery storage have dropped 76 percent since 2012 — and plunged 35 percent in the past year alone.
These price drops have been global game changers.
“Solar PV and onshore wind have won the race to be the cheapest sources” of bulk or primary power generation in most countries, explained a BNEF energy analyst.
But, as BNEF reports, batteries plus solar and wind “are starting to compete, in many markets and without subsidy,” with natural gas plants used for “dispatchable power” that can be delivered on demand when the grid needs it rather than only when the sun shines or wind blows….