This is how coal dies — super cheap renewables plus battery storage

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New Colorado wind farms with batteries are now cheaper than running old coal plants.

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Workers examining solar panel in rural landscape
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Think Progress

Workers examining solar panel in rural landscape

Solar, wind, and battery prices are dropping so fast that, in Colorado, building new renewable power plus battery storage is now cheaper than running old coal plants. This increasingly renders existing coal plants obsolete.

Two weeks ago, Xcel Energy quietly reported dozens of shockingly low bids it had received for building new solar and wind farms, many with battery storage (see table below).

The median bid price in 2017 for wind plus battery storage was $21 per megawatt-hour, which is 2.1 cents per kilowatt-hour. As Carbon Tracker noted, this “appears to be lower than the operating cost of all coal plants currently in Colorado.”

The median bid price for solar plus battery storage was $36/MWh (3.6 cents/kwh), which may be lower than about three-fourths of operating coal capacity.  For context, the average U.S. residential price for electricity is 12 cents/kWh.

BID SUMMARY FROM XCEL’S 2017 SOLICITATION (PART OF ITS 2016 ENERGY RESOURCE PLAN).

Note that by definition, half of the bids are below the median price — and there were 87 bids for solar plus storage, meaning many bids were quite low (see table above).

There were 96 bids for wind power alone — at a median price of 1.8 cents/kwh — which means some were very low-priced indeed. The tremendous number of bids in Colorado reveal the power of competition in driving prices down.

But it’s not just Colorado whose energy markets have been turned upside down. In November, we reported on the remarkable findings of the financial firm Lazard Ltd., which found that in many regions of North America, “the full-lifecycle costs of building and operating renewables-based projects have dropped below the operating costs alone of conventional generation technologies such as coal or nuclear.”

What XCel Energy has shown us is that the price for battery storage is dropping so fast, adding it to a solar or wind project increases the total price only modestly. And that’s a game-changer.

Remember, the knock against solar and wind power has been that they are variable, so their power supposedly isn’t as useful as “baseload” (24-7) power like coal and nuclear. Indeed, that was part of the argument that Energy Secretary Rick Perry had made in his now-failed effort to get the Federal Energy Regulatory Commission (FERC) to force U.S. consumers to bail out the coal and nuclear industries.

But even limited battery storage gives renewables enough flexibility to handle a lot of variability. Moreover, as the table above shows, seven bids combined wind and solar with batteries with a median cost of only about 3 cents/kWh.

Since it tends to be windier at night, when the solar panels aren’t generating power, this is yet another way to level out the power delivered from renewable projects. And as Perry’s own grid study showed last year, many other strategies either exist or are emerging that overcome the variability issue, including electric cars.

Moreover, Bloomberg New Energy Finance projects battery prices are projected to drop another 75 percent by 2030, even as solar and wind prices also keep dropping sharply. As a result, the price for dependable power from renewable energy sources is just going to keep going lower and lower.

Source: ThinkProgress. Reproduced with permission.

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32 Comments
  1. trackdaze 10 months ago

    Perhaps a bigger game changer is retrofitting mature wind farms with energy storage.

    • Steve159 10 months ago

      Perhaps an even bigger game changer is voting out the LNP next election.

      • James Wright 10 months ago

        I am with that its the only way we can go forward.

      • DJR96 10 months ago

        Energy is the one policy the LNP must turn around. I for one will be working hard on that this year.
        There’s too much other crap that ALP/Greens are stuffing up that we can’t accept. Even if they do have better energy policies at the moment.

        • mick 10 months ago

          whom do you mean by “we”

        • Tom 10 months ago

          Tax policy. Trade policy. Water policy. Industry policy. Migration policy. Secondary education policy. Tertiary education policy. Any more stuff-ups?

          The only things the LNP haven’t stuffed up are health policy – because they haven’t done anything, and defence policy – because no-one can stuff up defence policy when no-one knows what they’ve done.

          At least we’ve got the Grocery Code of Conduct.

          • Joe 10 months ago

            ..and how’s that Grocery Code business working out at the moment?

          • Nick Kemp 10 months ago

            Think you missed welfare policy and jobs policy

        • nakedChimp 10 months ago

          Name something that ALP and esp Greens have screwed up that comes even close to what the LNP managed with Energy and NBN.

        • Joe 10 months ago

          DJ my man, the last time I checked The COALition have been at the tiller since 2013 so how can you say ALP / Greens are stuffing up the joint. Tom and nakedChimp in their contributions below have shown that The COALition have been a massive fail on every issue and can I add Environment and Refugee policies to ‘The List of COALition Shame’.

    • Mike Westerman 10 months ago

      You need to be a bit careful in understanding what the US bids mean and generalising them to other application: they do not mean 100% battery back up of the wind or solar, rather around 10% of power output and daily energy generated. Great that it’s happening, and impacting on coal, hastening its demise. But do your numbers before rushing out and buying a Powerwall!

      • trackdaze 10 months ago

        100% battery backup is indeed unwarranted.

        10% about right at this stage.

    • Andy Saunders 10 months ago

      Actually there’s no physical reason why they have to be co-located, and there are some reasons why having the storage closer to the load is better (helps transmission reliability).

      • trackdaze 10 months ago

        There is one….land.

  2. Jake Frederics2 10 months ago

    That is great news. They can remove all green subsidies tomorrow and we will all be using 100% energy soon……. but for some reason they still require it. Can someone explain this?

    • James Wright 10 months ago

      What about the 10 billion Trump gave to coal and nuclear power sector does that count in the subsidiary equation?

    • John Saint-Smith 10 months ago

      It is important to understand that when ‘subsidies for renewables’ are discussed by ideologically driven critics, they are bound to use historical figures, not the current trend. Thus Craig Kelly pranced about last year with a megaphone shouting about $3 billion in ‘green’ subsidies, implying they represented ‘current’ Australian market when in fact his ‘source’ was a somewhat biased Minerals Council of Australia report based upon data current before 2012, fully 5 years out of date. Since those figures were assembled, most states have removed the generous ‘Feed In Tariffs’ which gave rise to the ‘subsidy’ myth. Most funding is now a loan – like the one you have when you start any new business – not a subsidy at all.

      If you’ve been reading on this website, you would realize that those figures are quite wrong today, and the subsidies are mostly for new, innovative plants using new technologies . But for some reason, old man Adani has been begging for massive subsidies, royalty holidays and tax minimizations to get his 19th century coal mine and port project over the line. Perhaps you’d like to explain that?

      • stucrmnx120fshwf 10 months ago

        Adani says give me a free billion dollar railway, come again, solar plus storage, is so cheap, India, the intended market, just put a Gigawatt solar power plant online. India is planning to ban coal imports, a billion dollar subsidy, for something that has no business case at all, it’s bizzare that they’re even considering it at all. After tripling the deficit, the COALition, are looking for ways to increase the deficit faster, blow our climate change commitments. It was 47°C in Western Sydney, this month, for a billion dollars, they could finance the cable from NW Australia, all the way to Singapore, from the desert solar farms.

        But the problem with an international power cable, second Basslink, for hydro power storage, is that they wouldn’t make a loss, so in order to increase the losses and deficit, Adani needs a free Airport, diesel fuel rebate, so they don’t have to pay for the road damage of their trucks. Of course they’ll pay no tax, that’s traditional, they’ll be almost no jobs, with self driving extraction vehicles, managed from the Philippines, mostly by tax deductible software. Meanwhile in 1 state of the US, solar thermal, is up to 1 gigawatt, from just 3 of their plants, in California, China gets it, 60% of the world’s solar panels are made in China, ten million people work in solar, that’s a lot of jobs, mining is debt capital intensive, not employment enhancement.

        Decade after decade, underestimates of solar power plant capacity are orders of magnitude lower, than actual outcomes and price per kWh, are grossly overestimated, compared to actually prices. They’re always expecting the price falls to slow, the GWh to level off, but decade after decade, the outcomes are vastly better, than predicted. Now that solar is cheaper than coal, there’s economies of scale, more research dollars going into solar power, surely that’ll slow things down, no it’ll make things happen, even faster than before. Price declines, mean a self reinforcement, in GWh installed per year.

    • Ken Fabian 10 months ago

      The biggest subsidy of all is surely the continuing amnesty fossil fuel energy enjoys on externalised climate and other costs like health impacts of their pollution. When those end come back with the expectation that ‘green’ subsidies should end. They get other, more direct kinds of financial support also, like tax exemptions. And of course the political support of major political parties.

    • Barri Mundee 10 months ago

      Troll alert!!

  3. DJR96 10 months ago

    I’ve been saying for some time that we’ll never see another coal-fired power station ever again in Australia.
    Now it seems we’ll not see any new coal-fired generation in many places worldwide. Not in the USA, UK and most of Europe at least. Only those projects that are already committed and underway will see the light of day. And many projects around the world will be abandoned too.

    • Jennifer 10 months ago

      Goo-g-le is paying 97$ per ho-u-r,with weekly p-a-youts.You can also avail th-i-s.O-n tuesday I got a brand new Land Rover Range Rover from havi-n-g earned $11752 this last four weeks..with-out any doubt it’s the most-co-m-fortable job I have ever done .. It soun-d-s unbelievable but you wont f-o-rgive yourself if you don’t check it!ve421r:↠↠↠ http://GoogleNewNetJobsMapCareerPartTimeJobs/get/hourly ♥♥♥k♥m♥y♥♥♥g♥♥♥h♥r♥♥♥o♥♥t♥♥♥y♥i♥♥m♥♥q♥v♥u♥♥s♥♥♥k♥♥♥c♥y♥l♥♥♥t♥♥♥q♥♥k♥♥♥i♥♥n♥♥♥e:::::!de69l:l

  4. Gregory J. OLSEN Esq 10 months ago

    Very encouraging news. I’d like to see that broadcast on Australian commercial TV news and have it referenced by the Energy Minister, Frydenberg. 🙂

  5. Robert Westinghouse 10 months ago

    Great news. But here in AUS….not holding my breath. The people need to tell the idiots in Canberra, yes they are idiots controlled by big power (and anyone who pays them).

  6. Ruben 10 months ago

    Sorry, I’m sceptical, those prices just sound too low.
    How are the bidders planning to turn a profit? Or are there massive government subsidies involved that weren’t mentioned?

    • Mike Westerman 10 months ago

      See my comments below – the storage is only for a fraction of the energy generated.

      • Ruben 10 months ago

        Even with no storage what so ever, it still seems too cheap to me though.

        • Mike Westerman 10 months ago

          Yes the shocking reality of falling panel costs, better network integration and very low interest rates!

          • Ruben 10 months ago

            It seems that there’s also an investment tax credit, which should be added on top of this to come up with the real prices. Otherwise you can’t compare it. Just like costs here should leave out RECs and just mention their value separately.

  7. tonyk 10 months ago

    Am I right with my calc here?
    Stand alone battery storage quoted at $11.30/kw/mth
    So in a year you would pay $US135.60 / kw of battery installed
    If you charge the 1 kw battery for 1 hr during day and discharge at night this is 365 cycles per year
    So 135.60 / 365 = 37cents / kwhr
    So clearly expensive especially as you won’t get 365 full cycles per year.
    My guess these batteries used for frequency and surge services.
    At 10% ROI $137.60 implies a capital cost of $1376 / kw.

    • Wildebeest 10 months ago

      Battery storage is not a stand-alone power source. Its role is to allow renewables to provide a more constant supply from renewables. So I’m not sure I understand the relevance of calculating the cost of energy the battery can supply over a year – it’s just not their role. It’s more relevant to combine battery costs with the cost of the power source, and look at the total cost of the overall project to see what’s required to provide stable power from renewables. Which is what the article does, and concludes renewables are cheap even once you’ve stabilised them to the extent the grid requires today.

  8. Vin Cam 10 months ago

    I have seen it before, it takes a while for Australia, to come around to what the rest of the world is doing. Once this happens I think you will see we will catch up very quickly. First it will be a massive uptake of solar installs, then electric autonomous cars.

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