November 22, 2011
Friday Factoids: The Clean Energy Price Gap
Here's the latest in our irregular Friday Factoids series, provided as usual without comment...
According to the U.S. Energy Information Administration, the statistics and forecasting agency of the U.S. Department of Energy, a substantial price gap remains between the levelized cost of new renewable electricity sources and conventional fossil fuel power plants. Their cost estimates are for new power generation equipment constructed in 2016 and reported in 2008 constant dollars (see graphic below).
Electricity from new onshore wind power, for example, is 49% more expensive than electricity from new conventional coal-fired power plants, and 80% more expensive than electricity from a conventional natural gas-fired combined cycle power plant, according to EIA estimates. Wind power built offshore is 28% more costly than onshore wind, says the EIA.
Electricity from new utility-scale solar photovoltaic (PV) power plants and solar thermal power plants are roughly 5x and 3x more expensive, respectively, than natural-gas fired combined cycle power plants, and roughly 3x and 2x more expensive, respectively, than conventional gas-fired combustion turbines, according to EIA figures.
Here is the original levelized cost table from the EIA with cost assumptions broken out...
Click either image to enlarge.
Update: a commenter notes via email that EIA cost forecasts often lag (and thus diverge from) real market conditions. Prices for solar PV in particular have been falling steadily. Meanwhile, natural gas prices are notoriously volatile, and greatly influence the levelized cost of electricity from natural gas-fired units. Fluctuations in the global market prices of key commodities (steel, cement, copper, etc.) further impact the capital costs of all generating sources. Any forecasts should therefore be taken with a grain of salt, including the numbers above.