Table 6 provides an overview of current and projected LCOE for new capacity plants LCOE of existing plants are excluded from this figure16). Both the EIA and a sum-
mary of LCOE projections completed by NREL project that natural gas combined-cycle generation will decline from around an USD 70 per MWh from 2008-2012 to between USD 55-65 per MWh in 2020 and 2030 (see also Box 1). However it is assumed that REmap Options will not substitute natural gas based generation, rather a portfolio representing advance coal and nuclear, both of which are projected to remain around USD 95 per MWh according to the EIA.
According to EIA, NREL or IRENA projections, many renewable energy technologies will be able to compete based on LCOE with advanced coal and nuclear power
16 REmap substitution does not require early retirement of capital stock, so comparisons of cost to existing plants is not made.
by 2030, if not sooner. Renewable energy technologies such as onshore wind and solar PV (utility) are projected even to compete with natural gas based generation (these estimates do not include any subsidies). In 2030, utility scale solar PV could be the cheapest, followed by wind onshore with high wind resource and natural gas. However, it should be noted that costs related to the integration of variable renewable are outside the scope of this study, and according to the IEA this could add between USD 5 and USD 25 per MWh (IEA, 2014). These additional costs, depending on whether they are on the low or high end, could have an effect on the ranking of power generation costs. It should also be noted, however, that rooftop solar PV is one of the only technologies that can produce electricity directly at points of consumption, so a comparison with wholesale power costs are not appropriate. Rather if viewed from a “plug-parity perspective” i.e., against the price of retail electricity, rooftop solar PV costs are around USD 0.09 per kWh, which provides a saving when compared to re- tail rate of USD 0.11-0.15 per kWh. It shows that solar PV, wind onshore (both high and low resource) and landfill gas also result in cost savings.
By 2030 onshore wind and utility scale solar
PV will be the cheapest power generation
options
In the buildings and industry sectors, the outlook is more challenging for renewable energy technologies. (See Annex D for an overview of these sector end-use costs). Due to the increased supply of domestic natural gas, and a continued low price of both household and industry natural gas, many types of renewable energy technologies that provide space heating, or process heat, will find it hard to compete based on price alone.. Exceptions may be made where solar cooling tech- nologies or heat pumps can replace air conditioning (particularly important during times of peak demand), areas where a high solar resource can take advantage of solar heating, or where biomass supply is ample and can provide co-generation of heat and power.
In the transport sector the outlook for renewable energy is strong. Since US oil is a benchmark for international crude oil pricing, the price per barrel in the US does not deviate much from the increases seen around the world. The EIA projects the price to increase to USD 138 per barrel by 2030, which translates to a price for pet-
rol increasing from USD 23 in 2010 to USD 32 USD per GJ in 2030 (USD 3.02 – 4.22 per gallon) – an increase of around 50% assuming no increases in the gasoline (petrol) tax. The price pressure that this will bring to petroleum based transport will enable many types of alternative transport technologies or fuels to compete on a cost-basis. However, because many alternatives ex- ist ranging from biofuels (conventional and advanced),
to hydrogen, biomethane, electromobility, and because there are infrastructure costs associated with increased uptake, the cost structure of these technologies are still hard to estimate. What is clear, however, is that most of these technologies pose realistic potential to compete with gasoline (petrol) use in transport on a cost-basis according to the methodology applied and the cost data (capital and operation and maintenance (O&M)
Table 6: Comparison of LCOE for power sector technologies
2008-20121 IRENA 20132 EIA 20193 NREL 20304 REmap 20305
(USD/MWh) (USD/MWh) (USD/MWh) (USD/MWh) (USD/MWh)
Renewables:
Hydro, run-of-river 90 20-105 85 85-103
Wind onshore 70 80 80 59 50-60
Wind onshore, low wind
resource 70-84
Wind offshore 160 204 77 95-120
Solar PV (Rooftop) 330
60-250 130 222 85-100
Solar PV (Utility) 45-55
Solar PV (Rooftop), low
solar irradiance 93-126
Solar PV (Utility), low solar
irradiance 55-66
Solar CSP PT storage 210 170-370 243 146 90-123
Biomass steam cycle 80 50-105 103 74 145-165
Landfill gas ICE 50-60
Geothermal 60 58-120 48 82 85-100
Conventional:
Coal, US weighted cost 95
Nuclear, US weighted cost 90
Coal (pulverised, scrubbed) 90 96 56
Coal – IGCC 116 60
Coal – IGCC with CCS 147
Natural Gas (combined
cycle) 70 66 56
Natural Gas – with CCS 91
Nuclear 340 96 686
1 NREL Transparent cost database, average 2008-2012, http://en.openei.org/apps/TCDB/. Assumes a discount rate of 7%. 2 Assumes a discount rate of 10%.
3 http://www.eia.gov/forecasts/aeo/electricity_generation.cfm (2014 estimates). Assumes a real after tax weighted average cost of capital of 6.5%
4 Page 38 http://www.nrel.gov/docs/fy11osti/48595.pdf (converted to 2010 USD with 5% inflation), average of 6 projections, all projections made around 2009 for 2030 and some, such as solar PV, are outdated. Assumes a discount rate of 7%.
5 Assumes a national discount rate of 7%.
6 NREL assumes that starting in about 2015, based on the AEO data set nuclear capital costs start to decline in over time, with projected costs falling below USD 2,500 per KWh by 2030.
costs, energy prices and discount rates) used in this study.