The latest analysis by research company BloombergNEF (BNEF) shows that the global benchmark levelized cost of electricity (LCOE), for battery storage has tumbled to $150 per MWh for battery storage systems with a four-hour duration, about half of what it was two years ago. This is particularly due to increasing project sizes combined with a rapidly expanding manufacturing base and more energy dense chemistries.
Solar PV and onshore wind are now the cheapest sources of new-build generation for at least two-thirds of the global population, which account for 71% of gross domestic product and 85% of energy generation. Battery storage is now the cheapest new-build technology for peaking purposes (up to two-hours of discharge duration) in gas-importing regions, like Europe, China or Japan.
BNEF estimates that the average capacity of storage projects sits at about 30 MWhs, a fourfold rise compared to just seven megawatt-hours per project four years ago.
With $115 per MWh, China is home to the cheapest storage levelized costs globally. This is largely due to the proximity of developers to the equipment supply chain and the more widespread use of cheaper lithium iron phosphate chemistries.
Seb Henbest, chief economist at BNEF, said: “The coronavirus will have a range of impacts on the relative cost of fossil and renewable electricity. One important question is what happens to the costs of finance over the short and medium term. Another concerns commodity prices – coal and gas prices have weakened on world markets. If sustained, this could help shield fossil fuel generation for a while from the cost onslaught from renewables.”
Source & Image: BloombergNEF ǀ www.bnef.com
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