Renewables just keep on getting cheaper

(Source; click to enlarge)

In Mexico:

Twice in 2016 Mexico held two renewable power auctions that raised significant investor participation. 

The most recent, in September, saw 23 winning bids out of a pool of 57 to build renewable projects worth $4 billion for 2,871 megawatts of new capacity. More important, the average price at the auctions was US$33.47 per megawatt hour, (MWh) 30 percent less than prices from a previous auction in March. In the September auction, 54 percent of the supply was awarded to solar projects and 43 percent to wind farms. 

The March auction drew 69 prequalified bidders and awarded 18 projects with a total of 1,691 megawatts for solar and 394 for wind. The a average contract price was $47.60/MWh

(Source)

In Chile:

According to media reports, Mainstream Renewable Power Ltd. and Empresa Nacional de Electricidad/Chile SA won more than two-thirds of the electricity supply auction in Chile. 

Meanwhile, Solarpack set a new record-low solar bid at 2.91¢/kWh ($29.1/MWh). That beats the 2.99¢/kWh bid a Masdar Consortium provided for an 800 MW solar power project in Dubai earlier this year. 

Mainstream has won rights to supply 3.7 TWh of electricity every year (30% of the auctioned electricity), while Endesa, a subsidiary of Enel, will supply 4.9 TWh (40% of the auctioned electricity). There was a significant correction in tariff in this auction compared to previous one. The average tariff bid in the auction declined 40% to US$47.59 per MWh compared to the previous auction. 

To supply the contracted electricity Mainstream will develop 7 wind energy projects with a total capacity of 985 MW. To achieve this capacity, the company is expected to invest $1.65 billion over the next 5 years. Electricity generated from these projects will be sold at tariffs between $38.8 per MWh and $47.2 per MWh.

(Source)

In Abu Dhabi:

The United Arab Emirates has seen yet another record-breaking solar power tariff bid. Abu Dhabi received the lowest-ever bid for a solar PV project at a shocking 2.42¢/kWh, taking back the title of cheapest solar power project from Chile. 

Abu Dhabi Electricity and Water Authority received a total of 6 bids for the proposed 350 MW solar PV project planned to be built in the town of Swaihan, Abu Dhabi. Out of 6 bids, the lowest ever bid of 2.42¢/kWh has been submitted by the JinkoSolar–Marubeni consortium. The results of the tender are not out yet, as authorities will now evaluate the proposals for technical and economic viability. 

The current bid of 2.42¢/kWh is the lowest so far globally, and by quite a bit — it is shockingly low. This bid is 20% lower than the previous record bid of 2.91¢/kWh submitted at an auction in Chile last month. 

The second-lowest bid in the Abu Dhabi tender was reportedly not much higher, at 2.53¢/kWh, and was submitted by a local firm. These bids also beat the 2.99¢/kWh bid (shocking at the time … and still to some extent) submitted by a Masdar-led consortium for an 800 MW solar PV project in Dubai. 

The Abu Dhabi solar park was initially planned for 350 MW. However, media reports state a possible increase in project size, as bidders were allowed to bid for larger capacities. The final capacity of the solar power park may well increase to 1 GW.

(Source)


Some points:

• These, like South Africa, are mid-ranking developing countries.  Their electricity demand, contrasting with the situation in developed countries, is still growing.
• Solar costs have more than halved in two years.  More than halved.  In two years.
• These prices are already irresistibly cheap.  And they're going to get cheaper.  If electricity demand is expanding, the new generators built are not going to be coal-fired.  They're going to be wind and solar.  In developed countries, it's harder.  Even though renewables are cheaper than new coal, often much cheaper, existing coal power stations look cheap, because they're fully depreciated.  So the switch to renewables is constrained, though it is happening, especially where generation is highly competitive, for example in the USA.  The good news is that most of the coal generating fleet in developed countries is past its design life, and major refurbishment is not worth it.  New capacity (as it already is in the US) will be renewables plus gas, and coal-fired power stations will be progressively retired.
• This means that coal demand has peaked, and that emissions from burning coal have peaked too.  Coal is the biggest contributor to CO2 emissions.  It's very likely that within 20 years there will be no coal-fired power stations.  Anywhere.  And that's without a carbon tax.  Introduce a $30 per tonne carbon tax and coal generators are toast.
• It also means that despite Trump and his gang of climate-denying, oil- and coal-loving cabinet, despite the Republican cognitive dissonance about global warming, the renewables revolution is irreversible.  For a start, it's happening now in developing countries including China, not just rich developed countries.  Second, even in the USA, the switch to renewables is being driven not just by regulation, but by price.  And the states in the "wind corridor" might vote Republican but they're also very fond of their wind turbines and the cheap power they generate.
• These developing countries and the US are installing both wind and solar, even though solar is cheaper, because the two together minimise the storage needed.  For now, the variability of renewables supply will be compensated for by gas.  In future, storage (CSP and batteries) will take the place of gas peaking power plants.  So demand for natural gas prolly hasn't peaked.  Yet.
• The reverse auction (i.e., targeting the lowest not the highest price) is an extremely effective method to slash renewables costs. Are you listening Australia?  Germany?
• I keep on saying this, so I'm beginning to sound like a record (remember them?) with a scratch.  But there are now no technical nor economic reasons  why we cannot aggressively switch electricity generation to renewables.   Global temps are rising by 0.2 deg C per decade.  Even though global CO2 emissions have probably peaked, they're not falling fast enough. We need to stop making excuses, stop listening to the lies of the denialists, and move.