Date: Mar 29, 2019
The Levelized Cost of Electricity of lithium-ion batteries and offshore wind have plummeted in the last year, according to new figures from research company Bloomberg New Energy Finance.
The Levelized Cost of Electricity (LCoE) measures the all-in expensive of producing a megawatt-hour (MWh) of electricity from a new project, and accounts for the costs of development, construction and equipment, financing, feedstock, operation, and maintenance. It is a helpful, if not entirely comprehensive, measure of the energy wars being played out between old fossil fuel generation sources like coal and gas and new renewable technologies like wind and solar, supported by other energy technologies like batteries.
Bloomberg New Energy Finance’s (BNEF) regular LCoE reports are, thus, a handy guide for determining the pace of the war and the lay of the land, especially as we move more fully into a new year. And this latest report is big news for supporters of renewable energy technologies, as BNEF shows that the LCoE of lithium-ion batteries and offshore wind have fallen dramatically in the past year. Specifically, the benchmark LCoE for lithium-ion batteries dropped 35% to $187/MWh while offshore the benchmark LCoE for offshore wind fell by 24% to just below $100/MWh.
Onshore wind and solar PV have both also seen their prices fall, though at less dramatic yearly declines, with benchmarks of $50/MWh and $57/MWh respectively (for projects starting construction in early 2019), yearly drops of 10% and 18%.
“Looking back over this decade, there have been staggering improvements in the cost-competitiveness of these low-carbon options, thanks to technology innovation, economies of scale, stiff price competition and manufacturing experience,” said Elena Giannakopoulou, head of energy economics at BNEF. “Our analysis shows that the LCOE per megawatt-hour for onshore wind, solar PV and offshore wind have fallen by 49%, 84% and 56% respectively since 2010. That for lithium-ion battery storage has dropped by 76% since 2012, based on recent project costs and historical battery pack prices.”
