According to the most recent Bloomberg New Energy Finance (BNEF) analysis, the levelized cost of electricity (LCOE) for lithium-ion batteries has dropped 35% since the first half of 2018. Even more shocking is its decrease since 2012—a whopping 76%—meaning renewable energy is going to start to give non-renewable power generation a run for its money. The renewable energy experts at Intersect Energy are here to further explain the most recent findings on renewable energy, and what it means for you and your wallet.
A Decrease in Price Means an Increase in Renewable Energy
Back in 2012, the cost of battery storage was a definite deterrent—at $800/MWh (megawatt-hour), it’s no surprise that renewable energy wasn’t the first choice back then. Now that prices have significantly dropped, all the way down to $187/MWh, it is safe to say that the electricity that is produced by renewables and integrated with batteries is a clean, affordable option, and will gain increasing popularity over fossil fuels.
Why There Has Been Such a Significant Decrease
The cost of lithium-ion batteries are not the only renewable energy input that has lower costs. In fact, according to Elena Giannakopoulou, head of energy economics at BNEF, the LCOE per MWh for onshore wind has decreased by 49%, solar by 84% and offshore wind by 56%. Giannakopoulou claims that this decline is occurring because of advances in technology, scale of economies, price competition and improved manufacturer experience.
How This Impacts You
Thanks to these recent findings and dramatic cost reductions across the renewable energy spectrum, it means that battery storage—combined with solar or wind projects—can now compete with coal and gas-fired generation. Even in markets without subsidies, this dynamic duo of battery storage and solar or wind will be capable of supplying enough dispatchable power. Plus, an Energy Innovation report recently stated that not only could wind and solar replace approximately 74% of the U.S. coal fleet, but that its customers will also enjoy immediate savings.
Ready to start reaping the many benefits of renewable energy? Contact the team at Intersect Energy today! Don’t forget to stay up to date with all the latest news in the renewable energy industry by following us on LinkedIn.
In a world that is becoming increasingly aware about climate change, the surge for renewable energy over the past two decades continues to increase. Just a few years ago, wind and solar technologies that were new and expensive are now the key to cost-competitive low carbon energy solutions. Finding cost-effective storage to keep up with the demands for renewable energy has become the next big challenge, and batteries have become the solution. Large battery installations are being built around the world, and they might end up in your neighborhood.
Batteries Just Got Cheaper
Batteries offer a viable solution for storing renewable energy, and fortunately—over the last year—the price of lithium-ion batteries has fallen by 35%. As the need for batteries increases, the cost of batteries continues to drop. This means it will be more cost efficient to store more solar and wind power. In addition, according to a new Bloomberg New Energy Finance report, the cost of wind in solar has dropped by approximately 10-24 percent since last year. This is a major win for renewable energy because it’s helping them compete with fossil fuel-generated power.
A Bright Future for Batteries
These new massive battery storage projects are already being built in places like Florida and California to replace natural gas, and many more are in the works. Florida Power & Light Company, a subsidiary of NextEra Energy, plans to build the world’s largest solar-powered battery. This new solar-powered battery will replace 1,638 megawatts (MW) of generating capacity of two aging natural gas power generating units with clean and renewable energy. This capacity will be equal to some 100 million iPhone batteries.
“This is a monumental milestone in realizing the full benefits of solar power and yet another example of how FPL is working hard to position Florida as the global gold standard for clean energy,” Eric Silagy, president and chief executive officer of FPL, said in a statement. This project is just one of the latest plans around the world for the development of these renewable generation systems.
The Increased Demand
The increased demand for battery storage is influenced by government policy. In states like California, Hawaii, Maryland, Massachusetts, Nevada, New Jersey and Oregon, they have adopted storage mandates and regulations. When businesses invest in these battery storage projects, federally a 30 percent Investment Tax Credit is available if it is associated with a renewable power generation project.
While the U.S. electric grid doesn’t necessarily need more storage now, with the increasing integration for wind, solar and other renewable energy resources, energy storage will become more important. If you’re looking to find solar power opportunities, Intersect Energy is here to help. Don’t forget to stay up to date with all the latest news in the renewable energy industry by following us on LinkedIn.