Renewable Energy Costs Fall to Less than 200 Percent of Coal

McIlvaine Company tracks all the renewable projects and projects the markets for wind, solar, biomass, and other renewable technologies. The comparison of costs to coal first needs to be refined to base load generation rather than peaking.

Most peaking capacity is gas-fired. As pointed out above, the single cycle turbine uses much more gas per MW of generation than a combined cycle plant. These peaking plants at ($20/Btu gas) would have costs of six times coal. This opens the door for many renewable options. It does not mean they would be competitive for the large base load generation needs.

The comparison also needs to be refined based on quantity. Wind power may be very competitive in a situation where there is otherwise a long transmission line. Wind power supply can be expanded at a modest rate. But there is no way that wind power will provide large quantities of base loaded power at a price of less than 200 percent of coal. 

Another aspect of the quantity comparison is actual electricity delivery as opposed to peak capacity. Wind turbine average generation is about 30 percent of maximum capacity due to variations in wind speed. It takes three times the wind turbine capacity to equal the baseload delivery of a coal plant.

There is a shortage of wind turbines. The industry has moved to five MW in a single turbine. But capacity is not nearly sufficient to meet demand. It will take some years for this situation to be resolved.

Solar presently has some very attractive site specific applications. There is promise of much broader application and substantial cost reductions. But it presently ranks behind wind in terms of near term promise.

Other renewable energy technologies are limited by resources (biomass) or cost, so the odds against renewable base load generation prices dropping below 200 percent of coal in the next fifteen years are at least 50 to 1.

 

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