Deloitte’s Global Renewable Energy Trends is unequivocal: "From a price perspective, onshore wind has become the world’s lowest-cost energy source for power generation, with an unsubsidised levelised cost of energy range of $30-60/MWh ... below the range of the cheapest fossil fuel, natural gas ($42-78/MWh)."
The report concludes that "solar and wind power recently crossed a new threshold, moving from mainstream to preferred energy sources across much of the globe".
Deloitte looks at what it terms the top markets for wind and solar, concluding that both technologies are well-placed in North America, the eastern side of South America, Europe, India and China.
The best markets for solar include most of the African continent, parts of the Middle East, and Japan.
Australia has the lowest costs for solar PV and Africa has the highest, despite high levels of solar insolation.
The Deloitte report suggests that the intermittency challenges of wind and solar may be overstated, particularly in regions where penetration levels are modest.
Where they are high, cost-effective integration is possible by adapting existing practices. The report concludes that, "solar and wind have much further to go...as costs are continuing to fall".
Distributed wind
Lawrence Berkeley Laboratory’s Wind Technologies Market Report was briefly cited here last month, and was reviewed in more detail elsewhere in the magazine.
This focused on large wind turbines, but there is also a thriving small machine market, and progress in the US has been explored in the Department of Energy’s 2017 Distributed Wind Market Report.
This covers small wind turbines, rated below 100kW, mid-size turbines of 101kW-1MW, and large wind turbines exceeding 1MW, but primarily used for local generation, either off- or on-grid.
There are 81,000 such turbines, with a total capacity of 1,076 MW, across all 50 states.
The installed costs and capacity factors for these machines vary widely. In the small-wind category, the average project cost was just over $10,000/kW, while the mid-sized machines averaged $3,006/kW.
Average capacity factors ranged from 16% for the small machines to 20% for the mid-size models and 32% for the larger units.
Disregarding incentives, costs of energy for the small machines were in the $110-1,030/MWh range, compared with $28-510/MWh for turbines greater than 100kW.
Small wind is not in competition with the large-scale generating sources, and its target energy cost depends on the purpose for which it is to be used.
The average residential price for electricity in the US is around $130/MWh, and the average price for commercial customers is around $108/MWh.
American residential prices are higher than those in Russia, China and elsewhere, but lower than those in France, the UK and Germany.
This suggests that there are likely to be several markets for small wind, both in the industrialised world and in "off-grid" markets, where the costs of electricity from other sources, such as diesel generators, are likely to be high.
Solar PV
Another report from Berkeley Laboratories reviews progress in the solar PV market. Here, recent trends suggest a slowing down in the rate at which prices are falling, after they roughly halved between 2000 and 2010.
Residential systems in 2017 averaged $3,700/kW, although there are wide variations across the states and with installation size.
This report does not quote costs of energy, but reference to the Annual Energy Outlook from the US Department of Energy suggests the range is $42-119/MWh, with an average of $63/MWh.
The minimum figure and the weighted average for wind are slightly higher than the corresponding values in the Deloitte study.
With a slowdown in solar price decline, wind and PV are likely to compete on equal terms in the near future, although each will have geographical markets to which they are best suited.
At a glance – This month’s report conclusions
Global Renewable Energy Trends, Deloitte Insights, 2018: Concludes that renewable energy, particularly solar and wind, are now established as mainstream and becoming preferred sources
Tracking the sun. Berkeley Laboratory, 2018: Comprehensive review of prices and trends in grid-connected solar photovoltaic systems across the globe
2017 Distributed Wind Market Report, US Department of Energy, 2018: Detailed review of progress and costs of sub-megawatt systems in the US
