Tipping point: wind massively cheaper than coal

Xcel Energy is a US utility that powers 3.3 million electricity customers across 8 western and mid-western states.  It has just upped its target for renewable energy from 35% in 2030 to 60%. Why?

Renewable energy, wind power in the Midwest specifically, is the cheapest source of electricity available today. Fowke reported that it’s cheaper to build new wind turbines than to simply operate even the lowest-cost of Xcel’s existing coal power plants. Yes, you read that right.

And utilities and grid managers are continually getting better at integrating intermittent renewable energy into the electric system. Whereas 15 or 20 years ago, it may have seemed nearly impossible to integrate 10% wind and solar, Xcel no longer blinks an eye at 60% renewables.

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There is a modest subsidy for wind, the Production Tax Credit, which is $1.84/MWh for the first 10 years of a wind farm's life.  Compared with a pre-subsidy lifetime cost of $30/MWh, the cost of wind is reduced to 29/MWh.

In Australia we are close to this point, where the cost of renewables is less than the running cost of coal.  Over the next 5 years, everywhere in the world, this will be true in more and more places.  There will be a very rapid drop in coal demand as coal power stations are shuttered.  Because it will take time to roll out wind and solar farms, it won't happen overnight.  But after all, if it's cheaper to build new renewables than dig up, ship and burn coal, why on earth would we keep on doing it?

Next time a denialist tells you that switching to renewables will cause a catastrophic decline in economic output and living standards, point out to them that actually it's the opposite: countries which foolishly cling to coal will be disadvantaged.

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