New analysis by Bloomberg New Energy Finance (BNEF) suggests that solar and wind sources of energy have passed another significant turning point in terms of the development towards an economy powered by renewables, both in Europe and the U.S..
BNEF’s work found that for the first time, wind energy is the cheapest form of electricity in both the UK and Germany.
The analysis also looks into the “capacity factor” in the U.S – the percentage of a power plant’s potential that is actually achieved.
One of the biggest strengths that fossil fuel plants have had in comparison with renewable counterparts, is an ability to provide high and reliable capacity levels, often producing around 70% of maximum capacity over the course of a year. An average solar project may only produce 20% capacity because of differences in the levels of sunshine.
However, Bloomberg’s analysis suggests that the wider adoption of renewables is shifting the economics. Once a solar or wind facility is invested in and built, the marginal costs of electricity are very low, while coal and gas plants require fuel for every watt of energy produced. It means that as more renewable energy projects are created, the previous capacity advantage is reduced and the cost of fossil fuel plant electricity goes up.
Recent progress in the sphere of renewable energy battery storage combined with continued technological developments in terms of making different sources, including solar and wind, more effective all points towards an inevitable transition to a global economy powered by renewable energy.
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