https://www.cbsnews.com/news/its-now-cheaper-to-build-a-new-wind-farm-than-to-keep-a-coal-plant-running/
[video in online article]
By Irina Ivanova MoneyWatch November 16, 2018, 8:31 AM
It's now cheaper to build a new wind farm than to keep a coal plant running
Inflation dictates that the cost of living will continue to rise —
except, it seems, when it comes to renewable energy. The cost of
building a new utility-scale solar or wind farm has now dropped below
the cost of operating an existing coal plant, according to an analysis
by the investment bank Lazard. Accounting for government tax credits and
other energy incentives would bring the cost even lower.
"There are some scenarios, in some parts of the U.S., where it is
cheaper to build and operate wind and solar than keep a coal plant
running," said a Lazard banker who was involved in the report. "You have
seen coal plants shutting down because of this."
Every year, the investment bank analyzes the cost of different types of
energy using a metric called the levelized cost of energy, or LCOE. This
analysis factors in the cost of components and the cost of operations,
as well as the cost of debt, to come up with the smallest dollar amount,
per unit of energy, for an investor in the project to see a 12 percent
return.
The LCOE for coal this year is between $27 and $45 per megawatt. That
figure is $29 to $56 for a wind farm and $31 to $44 for a solar farm,
depending on the technology used.
Wind power costs have dropped as utilities have turned to bigger and
bigger turbines, which can produce more energy. The largest turbines
installed today can produce double the power they could've a decade ago,
according to the Energy Information Administration, dramatically
increasing the amount of power a parcel of land can produce. Wind and
solar installation has also gotten more competitive, driving the
development of more efficient technology.
Lazard also noted that wind and solar farms typically require fewer
people to run than a coal or nuclear plant, further decreasing their cost.
The bank noted that this analysis applies to developed economies, and
excludes places like India and China, parts of which are very dependent
on coal. But in the U.S., coal plant construction has ground to a near
halt, and many utilities are successfully making the case for renewables
to their customers. This year has seen the second-higher number of coal
plant retirements on record.