One of the best ways to measure the cost of generating electricity is to divide the cost by the megawatt hours and life of the plant. By that measure, solar power is now the least expensive way to generate electricity. Even with the cost of storage – solar power doesn’t work in the night time, after all – factored in.
There’s a bit of concern because the cost of lithium for lithium-ion storage batteries is constrained and prices may climb in response to increased demand. But even using lead-acid batteries, solar power is the least expensive alternative, followed closely by wind energy.
And that’s without assigning any economic cost to the injection of fossil fuel-generated CO2 into the environment, or processing spent nuclear fuel. Or imposition of a hypothetical carbon tax.
That spells bad news for the coal industry, whatever Donald Trump may say. For those of us who think the best place for coal is left in the ground, it’s another nail in the coffin of the world’s dirtiest fuel.
The other news is that large-scale battery technology has proven itself in the last twelve months. These batteries “improve the grid’s ability to respond to momentary or short duration fluctuations in electricity supply and demand.” We’ve seen real-world, large grid battery use in Australia, where the massive Tesla battery at the Hornsdale Wind Farm has been used to maintain grid frequency,as well as replacing wind powers when the air goes calm. The advantage of the gigantic batteries is that the power is there instantly, as opposed to natural gas-generated power, when the generator first has to be brought up to speed.
The lower prices for solar power are a consequence of thinner solar cells, requiring less silicon, and economies of scale in the manufacture of those cells. It’s remarkable solar cell prices fell in the face of heavy tariffs imposed by the Trump administration in early 2017. Part of that may be a result of China ending a domestic solar panel subsidy, which caused Chinese customers to buy fewer solar panels. The resulting glut of panels could then be sold for even lower prices on the international market than before.
That made Trump’s tariffs counter-productive, even without factoring in the climate benefits. And there is increasing urgency that we must take climate impacts into account, out of Trump’s own administration (despite reported efforts to bury the reports).
But that will be the subject of another blog post.