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Clean energy is cheaper in more countries than gas and coal

In countries that account for 51% of electricity generation, 48% of the world’s population and 44% of global GDP, it is now cheaper to build new solar or onshore wind capacity than to run power plants Existing coal and gas-fired power plants, based on BloombergNEF’s Second Half 2021 Levelized Cost of Electricity (LCOE) update, which assesses the cost competitiveness of different energy generation and storage technologies globally.

Given record fuel and carbon prices in 2021, the cost of operating existing coal and gas plants has increased this year. In China, where the LCOE for solar PV has risen 15%, BNEF saw an 86% increase in coal spot prices, to between US $ 133 and US $ 222 a metric ton in the second half of 2021, compared with US $ 95 per ton in the first half of the year.

Higher fuel prices mean that new production from solar or wind power now outstrips existing coal and gas in Europe, China, India, and parts of Latin America and Africa.

On an annualized basis of dollars per megawatt hour (MWh), building new utility-scale solar PV projects is cheaper than running existing coal and gas power plants in China, India, Germany, France , Spain, Portugal, Italy, Greece, Turkey, Chile and South Africa.

In Sweden, Finland, the United Kingdom, Belgium, Denmark, the Netherlands, Poland, Morocco and Brazil, it is now cheaper to build new wind plants than to run existing coal and gas power plants.

Since the first half of 2021, six new markets are seeing new renewables outperform existing generators that run on fossil fuels on a dollar / MWh basis: Chile, South Africa, Turkey, Finland, Belgium, Denmark. Five other markets are almost at cost parity: the United States (if tax credits are included), Mexico, Canada, Saudi Arabia and Japan.