- CSP (concentrated solar power), where it seems to me that Lazard is using the US experience, where no new CSP plant has been built for a couple of years. However, Solar Reserve has won tenders for CSP plants outside the US, and I've used those PPAs for costings of CSP.
- I've estimated storage costs using $400/kWh total cost of battery pack, plus engineering inverter(transformer) and grid connection. This is what Tesla's "big battery" cost in South Australia. For cars, the battery pack currently cost $170/kWh, Tesla and Envision Energy expect battery pack prices to reach $100/kWh by 2020 and $50/kWh by 2025. I'm assuming (conservatively) that the battery only lasts 10 years, whereas it does seem as if at least Tesla's batteries will last much longer. At $400/kWh, one hour of storage will add $4.60 per MWh (delivered) to the generation cost of electricity. (Lazard's estimates for the cost of storage are twice as high--I can't get my head around that yet, so I'll go with the "big battery" costings.)
- Wind plus power-to-gas is my estimate of the costs of wind plus long-term storage via power-to-gas, as I discuss here, and assumes that gas peaking using synthetic natural gas is used for 10 weeks a year. The cost of producing synthetic natural gas will fall as the percentage of renewables in the grid rises because of increased curtailment. Running power-to-gas plants when there would otherwise be curtailment will reduce its cost.
Also, the marginal costs of wind and solar are near zero. Grid operators will use renewables whenever they can. The calcs for coal's marginal cost assumes it's used 24/7. If renewables price it out of the market for just a few hours a day, even though nominally the operating cost of coal is cheaper than renewables, it will in fact become uneconomic. Coal power stations cannot be turned off and on again. As renewables expand into the grid, this factor alone will make coal uneconomic.
The second thing to note is that apart from existing coal with its low marginal cost, all the cheapest power sources are renewables, except for baseload gas. (Gas is more expensive outside the US, so that's only true in that country.) Even allowing for 10 hours of storage, which would allow renewables penetration of 90%, renewables are cheaper than coal. And even if we use power-to-gas to provide back up for the last 10-15%, it will still be cheaper. I've been conservative in my estimates of how much power-to-gas would be needed, assuming that backup gas peakers would be required when the wind doesn't blow for 10 weeks a year. Remember that the costs of renewables/batteries/CSP will keep falling as we move along the learning curve.
This is good news for the climate. As I argue here, the chances are that emissions will start to fall soon, as battery costs decline.