The CEO of US-based clean energy company NextEra Energy says wind and solar projects co-located with battery storage – so-called “near-firm renewables” – will be cheaper to operate than most fossil fuel-powered plants by 2025.
Jim Robo, NextEra Energy’s CEO, told investors last Friday during the company’s year-end earnings call that new near-firm wind projects will boast a levelized cost of energy (LCoE) of between $US20-30/MWh ($A30-45/MWh) within five years, whereas near-firm solar projects will boast an LCoE of between $30-40/MWh ($A45-60/MWh).
“At these prices, new near-firm renewables will be cheaper in the operating costs of most existing coal, nuclear, and less-efficient oil and gas-fired generation units,” said Robo. “We were pleased by the 60% PTC extension that was passed in 2019, and we expect that will support incremental wind demand in 2023 and 2024.”
“Our confidence in renewables being the low-cost generation alternative in the middle of this decade remains stronger than ever. We expect the disruptive nature of renewables to be terrific for customers, terrific for the environment and terrific for shareholders by helping to drive tremendous growth for this company over the next decade.”
The term “near-firm” simply means that the wind and solar plants would be close (near) to providing around the clock power – akin to that of fossil fuel projects like coal, natural gas, and nuclear – thanks to the backing of battery storage.
Of course, over the last couple of years we have seen a dramatic spike in the development of hybrid and tribrid projects – combining wind and/or solar with battery storage – and seen a concomitant decrease in the LCoE of these projects.
Among the leading developers for these hybrid and tribrid projects is NextEra Energy, which announced last year it will develop the United States’ largest tribrid project – the 700MW Skeleton Creek wind and solar and battery storage project.
The first project of its kind announced in the United States, the project will consist of three separate projects brought online in two phases. The first phase, Skeleton Creek Wind – which had already been announced – will be a 250 MW onshore wind farm which is expected to begin operations by the end of 2019.
The second phase will consist of Skeleton Creek Solar – a 250 MW solar energy project – and Skeleton Creek Storage – a 200 MW, 4-hour battery energy storage project – both of which are expected to come online and begin operations by the end of 2023.
“Pairing renewable energy with battery storage presents a tremendous advantage for Western Farmers and its customers,” said John Ketchum, president and chief executive officer of NextEra Energy Resources, speaking in July.
“With this combined facility, we can optimize and maximize the amount of low-cost, emissions-free electricity we provide, while helping Western Farmers diversify its power generation portfolio, reduce its dependence on fossil fuels and set a great example for others to follow.”
This tribrid type of project, however, is not restricted to the United States, with a similar (though smaller) project being developed by EDL at the Agnew gold mine in Western Australia.
The 23 MW project integrated solar into an existing gas and diesel micro-grid last November and will eventually move on to add 18 WM of wind and 13 MW/4 MWh of battery storage. Another small hybrid project is already in operation in the small South Australian town of Coober Pedy, with the Coober Pedy Hybrid Renewable Project completed all the way back in July of 2017.
Consisting of a 4 MW wind project, 1 MW of solar, and a 1 MW/500 kWh battery storage project, co-located with Coober Pedy’s original diesel power station, the project helped the small mining town transition from 100% diesel to up to 100% renewables.