Renewable Energy cost reductions of 50% since 2008

by Silvio Marcacci

That renewable energy is becoming more cost-competitive with fossil fuels isn’t news — as technology improves and more clean power generation comes online, electricity without emissions gets cheaper.

But one new analysis reveals just how shockingly cheap it’s gotten.

The levelized cost of electricity (LCOE) from wind and solar sources in America has fallen by more than 50% over the past four years, according to Lazard’s Levelized Cost of Energy Analysis 7.0, recently released by global financial advisor and asset manager firm Lazard Freres & Co.

Lazard’s analysis compared the LCOE for various renewable energy technologies to fossil fuels on a cost per megawatt hour (MWh) basis, including factors like US federal tax subsidies, fuel costs, geography, and capital costs.

Unsubsidized LCOE for US energy
Unsubsidized LCOE for US energy graph via Lazard

Utility-Scale Solar, Wind Lead LCOE Charge

The LCOE analysis shows that even during one of the most turbulent times in recent memory for renewables, the environmental and economic benefits of clean energy continue to spur technological innovations and utility-scale deployments across the globe.

According to the analysis, utility-scale solar photovoltaics (PV) and leading types of wind energy are leading the surge — the LCOE of both power sources has fallen by more than 50% since 2008. Lazard estimates that utility-scale solar PV is now a competitive source of peak energy compared to fossil fuel power in many parts of the world without subsidies.

In fact, Lazard finds certain forms of renewable energy generation are now cost-competitive with many fossil fuel generation sources at an unsubsidized LCOE, even before factoring in externalities like pollution or transmission costs.

Specifically, solar PV and wind energy both fall within the range of $68-$104 per MWh, making them extremely competitive with baseload power from coal ($65-$145 per MWh), nuclear ($86-$122 per MWh), and integrated gasification combined cycle ($95-$154 per MWh).

Financial Incentives, Energy Storage Could Boost Fortunes

The LCOE of electricity from those renewable energy sources falls even further when US federal tax subsidies are included in the equation. Lazard realistically admits incentives are key to pushing renewables toward grid parity without subsidies, but finds wind ($23-$85 per MWh) and thin-film utility scale solar PV ($51-$78 per MWh) especially competitive.

LCOE for US energy with tax subsidies
LCOE for US energy with tax subsidies chart via Lazard

While wind is progressing quite well — generally speaking — against fossil fuel generation in Lazard’s analysis, it could get much cheaper much faster in the near future when combined with energy storage. The report cites numerous examples of existing battery storage combining with off-peak wind production to demonstrate value in load shifting and peak power applications.

And while utility-scale solar PV leads the LCOE charge, rooftop solar PV remains expensive by comparison — a trend evident in recent summaries of the US market. Ironically, Lazard says this may be attributable to the generous combination of multiple levels of tax incentives, which distort resource planning by excluding externalities in long-term outlooks.

Power generation rates for US metro areas
Power generation rates for US metro areas chart via Lazard

Interestingly enough, solar is becoming an economically viable peaking generation source in many geographic regions of the US. This trend is especially apparent in transmission-constrained metropolitan areas like New York City, Los Angeles, Washington DC, Chicago, and Philadelphia. Lazard estimates solar could become even more competitive as prices continues to fall, but the observation is somewhat muddled by factors like system reliability, stranded costs of distributed generation for existing systems, and social costs/externalities of rate increases.

“Increasingly Prevalent” Renewable Energy Use

But the most promising potential for the future of renewable energy sources may be their value as distributed small-scale generation. Lazard estimates that the expensive capital construction costs of fossil fuel generation boost their LCOE when utilities consider future resource planning across an integrated system, and make them less cost-competitive — without even considering externalities.

US energy capital cost comparison
US energy capital cost comparison chart via Lazard

Lazard concedes that the future of renewable energy is far from set though, and still faces significant challenges like establishing long-term financing structures in the face of falling subsidy levels, excess manufacturing capacity, and the globalization of markets.

However, renewable energy’s role in America’s energy mix is likely to continue growing despite these challenges, concludes the analysis.

“We find that alternative energy technologies are complementary to conventional generation technologies, and believe that their use will be increasingly prevalent for a variety of reasons.”

This article, Analysis: 50% Reduction In Cost Of Renewable Energy Since 2008, is syndicated from Clean Technica and is posted here with permission.

About the Author

is Principal at Marcacci Communications, a full-service clean energy and climate-focused public relations company based in Washington, D.C.

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Over 50% Of Electric Cars Sold In US Are In 5 Cities

by Nicholas Brown — Special to JBS News

You have probably heard of certain cities which have particularly high electric car ownership rates, often due to their generous incentives. Can you name which five cities have over 50% of the electric cars sold in the US?

los angeles

Image Credit: Los Angeles via Shutterstock

Here’s the list:

  1. Los Angeles, California
  2. San Francisco, California
  3. New York City
  4. Seattle, Washington
  5. Atlanta, Georgia

Georgia offers a tax credit for electric vehicles that is equal to 20% of the vehicle’s cost, up to a maximum amount of $5,000. California has many charging stations, which might have contributed to its presence in the list above, but it also offers a $2,500 incentive for electric vehicles. (The charging stations may just be in place due to the high electric car ownership in the state… it’s that whole chicken & egg question again.)

New York City has its own EV policies that surely helped stimulate EV adoption a bit, but the fact that it is the largest city in the US (by far) is also surely a factor.

Image Credits: San FranciscoLos Angeles via Shutterstock

How to Buy a Car and get Free Fuel

by John Brian Shannon

What if you could buy a car and (except for the normal taxes, insurance, maintenance and parking stall fees, etc.) you could drive it around for free? What I’m talking about is fuel, which for most people is a major cost these days.

Steve: In Los Angeles, the gas price is hovering around $4.00 per gallon. At that price, ‘Steve’ uses about $21.00 of gas (5.3 gallons) to travel 96 miles every weekday. He is likely to spend $106. per week in mixed driving, totalling about $425. per month.

The question is; What would ‘Steve’ rather do with $5100. per year?

If you want an easy way to calculate vehicle fuel costs, miles per dollar (MPD) works as good as anything – and for this hypothetical SUV it costs about $0.22 per mile to drive in mixed traffic. (Maintenance, taxes, registration, parking, etc.… not included in these figures.)

Suzy: HerHybrid Prius also does a lot of stop and go city driving. Her EPA sticker says she should get 48 MPG city driving and 45 MPG highway driving. At $4.00 per gallon for gas, she uses $8.00 of gas (2 gallons) to travel 96 miles. Her cost per mile? Suzy’s Prius costs about $0.08 per mile to drive in mixed traffic. (Maintenance, taxes, registration, parking, etc.… not included in these figures.)

Ken: He drives a Nissan LEAF, which doesn’t even have a gas tank — because it is an electric vehicle, but the EPA sticker on the car when it was new advertised an equivalent of 95 MPG, which is expressed as 95 MPG-e.

Scenario A) If Ken charges his car’s battery pack at home, he pays for the electricity to charge it resulting in an electricity cost of $0.04 per mile. Depending on how Ken drives and his electricity rate, each $1.00 of stored electricity could get him up to 25 miles.

Scenario B) If Ken uses the many available and free fast-chargers placed around the city to recharge his EV battery pack, he doesn’t pay anything per mile — as most 30 minute fast-chargers for electric vehicles are free to use in the U.S.A. In which case, his cost is $0.00 per mile. Buy the car, drive it for free! (Maintenance, taxes, registration, parking, etc.… not included in these figures.)

It may interest you to know that there are over 11,500 EV chargers in the U.S.A. as of Jan 2013, with more are being added every month. They are easily located via smartphone app and are conveniently located in almost every U.S. city.

Now, what to do with that extra $5100. each and every year?

These numbers are hypothetical examples, your costs and/or savings will be determined by your city’s gas prices and your vehicle mileage. Your electricity rate only matters if you choose to charge your EV at home — instead of at a 30 minute fast-charging station, where you can fully charge it for free!

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