Solar and onshore wind power are now the cheapest new sources of electricity in at least two-thirds of the world’s population, further threatening the two fossil-fuel stalwarts — coal and natural gas.
The levelized cost of electricity for onshore wind projects has fallen 9% to $44 a megawatt-hour since the second half of last year. Solar declined 4% to $50 a megawatt-hour, according to a report Tuesday by BloombergNEF.
The prices are even lower in countries including the U.S., China and Brazil. Equipment costs have come down, technologies have improved and governments across the world have boosted clean-power targets as they seek to combat climate change. That could squeeze out coal and natural gas when utilities develop new power plants.
“Best-in-class solar and wind projects will be pushing below $20 per megawatt-hour this side of 2030,” Tifenn Brandily, an analyst at BNEF, said in a statement. “There are plenty of innovations in the pipeline that will drive down costs further.
Yet it remains unclear whether the coronavirus’ impact on coal and gas prices will erode the competitiveness of wind and solar. “If sustained, this could help shield fossil fuel generation for a while from the cost onslaught from renewables,” Seb Henbest, chief economist at BNEF, said in the statement.