Battery costs plunge, solar and wind undercut new coal and gas “in almost every market”

The plunging cost of battery storage will send the global benchmark price for the firming technology below the $US100 per megawatt-hour (MWh) mark in 2025, Bloomberg New Energy Finance has forecast, following a year of record lows in the cost of generating clean power.

In its latest annual Levelised Cost of Electricity report, BNEF says the global benchmark cost for stand-alone battery storage projects fell by a third in 2024 to $US104 per megawatt-hour (MWh), as a glut in supply due to slower electric vehicle sales led to cheaper prices.

In Australia, the falling cost of batteries was also a feature of the CSIRO’s latest GenCost report, which found it had plunged more than 20 per cent in the last 12 months.

The BNEF report shows the typical fixed-axis solar project cost dropped to $US36/MWh in 2024 and onshore wind hit $US38/MWh, thanks in large part to the contributions of low-cost solar and wind in China.​

The BNEF report notes that China can, on average, produce a megawatt-hour of electricity from major power-generating technologies 11-64% cheaper than other markets.

In China, for example, power generated from onshore wind costs around 24% less than the global benchmark of $38 per megawatt-hour, as turbine prices in China continue to fall while being on the rise everywhere else since 2020.

Globally, BNEF says it expects benchmarks for wind and solar generation to fall further in 2025, by 4% and 2% respectively, as they continue to undercut new coal and gas plants on production cost “in almost every market” around the world.

Overall, BNEF expects the cost of clean power technologies to fall by between 2-11% in 2025, breaking last year’s record, with only the introduction of trade barriers likely to slow momentum.

“China’s clean technology manufacturing overcapacity has led to rising protectionism in the form of import tariffs by countries to avoid cheap imports upending their own energy markets,” the report says.

“Trade barriers could temporarily stall cost declines, but BNEF still expects the levelised cost of electricity for clean technologies to fall 22-49% by 2035.”

The falling price of solar, meanwhile, continues to stun, with BNEF reporting a 21 per cent drop in the cost of a typical fixed-axis solar farm, globally last year.

“New solar plants, even without subsidies, are within touching distance of new US gas plants,” says Amar Vasdev, lead author of the report, which covers 29 technologies in more than 50 countries.

“This is remarkable because US gas prices are only a quarter of prevailing gas prices in Europe and Asia. It really raises the bar on what is possible even in the current market.

“This opens up the likelihood that solar will become even more compelling in the coming years, especially if the US starts exporting liquefied natural gas and exposes its protected gas market to global price competition,” Vasdev says.

Green Energy Markets Tristan Edis says the news of large falls in battery costs in particular should come as welcome news to those concerned about electricity reliability and affordability in the shift to renewables.

“It makes  for an incredible contrast to the latest news on nuclear, where the cost blow-out for the UK’s next reactor – Sizewell C – indicates a cost per MWh ranging between  $230 to $300 AUD. That would lead to household bill increases of between $561 to $961 per annum.

BNEF’s findings on the cost of nuclear – the report covers both conventional plants and SMRs – have not yet been publicly released, with the vast majority of the data and findings behind a paywall.