+44 (0)24 7671 8970
More publications     •     Advertise with us     •     Contact us
 
Loading...
News Article

DBRS Publishes Commentary on Cost Competitiveness of Solar and Wind Projects

Thursday 7th February 2019

News

DBRS Limited (DBRS) released a commentary titled “Are We There Yet? Solar and Wind Power Projects Achieve Cost Competitiveness.”
In this commentary, DBRS revisits cost development for solar and wind power over the 18-month period between H1 2017 and H2 2018. Data now show that solar and wind power have on average become more cost competitive on a levellized basis than conventional energy sources. During the past 18 months, the cost of utility-scale solar and wind power projects continued its downward trend with the levellized cost of electricity (LCOE) of intermittent energy sources becoming increasingly competitive. As governments worldwide are reducing direct support for renewable power projects, this has paved the way for subsidy-free projects to become more common.

Over the last 18 months, the cost of solar photovoltaic (PV) without tracking (solar PV) exhibited the sharpest decline, down approximately 30%. For onshore and offshore wind, LCOE decreased by 22% and 7%, respectively, over the same period. Some of the lowest LCOE values for onshore wind and solar PV in H2 2018 were observed in India, where renewable energy project costs have declined on the back of fierce competition. This recent development is of particular interest as coal projects had been more cost competitive than both onshore wind and solar PV until H1 2018 when the playing field changed.

It is safe to say that renewable energy projects no longer require special treatment to take off given the rapid cost declines. DBRS believes that intermittent energy projects are becoming increasingly competitive in the absence of subsidies. In tandem with declining costs, the number of new subsidy-free wind and solar energy projects is increasing. In addition to over a dozen unsubsidized solar projects currently operating or under construction in Europe, several large-scale subsidy-free wind projects were announced in 2018.

In Canada, renewable energy, especially wind and solar power, has historically been supported by provincial governments through subsidies. Recently, however, the decline in wind power costs incentivized some provinces to increase their renewable energy without subsidies. In particular, recent contracts won in Alberta and Saskatchewan are very competitive.

With the rapid cost declines to date driven to a large extent by reductions in operating expenditures and capex, DBRS anticipates that, going forward, the implementation of best practices to enhance efficiencies across the value chain and improved project planning will become increasingly important in further driving down costs.
×
Search the news archive
To close this popup you can press escape or click the close icon.
Logo
×
menu
latest news
latest video
Logo
×
Register - Step 1

You may choose to subscribe to the Power Electronics World Magazine, the Power Electronics World Newsletter, or both. You may also request additional information if required, before submitting your application.


Please subscribe me to:

 

You chose the industry type of "Other"

Please enter the industry that you work in:
Please enter the industry that you work in: