Renewable Cost Lead: Why It's Here to Stay

Copyright © 2021 Energy Intelligence Group

It is unlikely fossil fuels will ever displace renewables again, according to Energy Intelligence's new data on the cost of electricity generation, known as the levelized cost of energy (LCOE). High gas and carbon prices have dragged combined-cycle gas turbines (CCGT) far behind several types of renewables — solar photovoltaic (PV), onshore wind and even offshore wind — in the contest for cheapest power generation technology in Europe. The trend is less pronounced in the US, but the same. Even if European gas prices fall back to previous trends next year, renewables are set to maintain their cost crown, barring major unforeseen circumstances. That's because wind and solar investment costs are set to continue decreasing in the foreseeable future — whereas carbon prices are expected to stay at least as high as they've been this year.

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