[REPORT]: By 2020s, Solar and Wind May Cost the Same as Coal
In a new report out from energy consultant Poyry Oyj, it was predicted that the cost of solar and onshore wind could fall to the same level as generation from fossil fuels.
The report points to solar plants in Spain that could produce electricity that is on a competitive level with coal and gas as soon as 2021. This would be followed shortly after by plants on Portugal in 2022 and in parts of Italy by 2025.
The most impressive fact, though, is that Turkey could reach grid parity with solar and wind as early as 2018.
In the UK, onshore wind is expected to be competitive without subsidies by 2021, though it could be a year earlier in Ireland.
Cost are being driven down by better technology and lower manufacturing costs, though according to the report, breakthroughs in energy storage and plant building costs need to fall before a rapid drop can occur.
According to Anser Shakoor, a senior consultant at Poyry, achieving grid parity doesn’t mean that renewables will instantly take over. There still needs to be a decrease in capital costs for large-scale expansion.
“The revenues of any investment now undertaken with, say, a 30-year economic life will be affected by the build of unsubsidized renewables as typical subsidy regimes are 10 years to 20 years in duration,” he said in an email to Bloomberg.
This news comes on the heels of a report from infrastructure group Lazard that solar and wind are cost competitive during peak energy usage.
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.