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Solar Energy Will Become The Cheapest Energy In The World In Ten Years
- Apr 02, 2018 -

Solar energy will become the cheapest energy in the world in ten years

      The plunge in the cost of solar power is irresistible. Is it far from the day when coal is withdrawn from the stage of history?Bloomberg reported recently that solar energy is already cheaper in some parts of the world than coal. It is expected that solar energy will become the lowest-cost energy option in the world in the next decade.

In the past 2016, from Chile to the United Arab Emirates, many countries have set a minimum record for the cost of solar power generation at a price of less than 3 cents/kWh, which is half the cost of global average coal power generation. At present, Saudi Arabia, Jordan and Mexico are planning to auction and tender this year, hoping to further reduce prices.

      Companies like Italy’s “Enel Spa” (the largest power company in Italy) and Ireland’s “Mainstream Renewable Power” may benefit, and they have accumulated a lot of experience in Europe due to a decline in domestic subsidies or Canceled and moved to overseas markets.

Bloomberg reported that since 2009, solar energy prices have fallen by 62%, and costs have been cut at every step of the supply chain. This will help reduce the risk premium for bank loans and push the company's manufacturing capacity to a new high. According to Bloomberg New Energy Finance, by 2025, the average cost of solar power on a global scale may be cheaper than coal.

      "These figures will change the rules of the game in the global energy market and will gradually become more common in more markets," said Adan Emin, Director-General of the International Renewable Energy Agency. "Every time the capacity doubles, the price of solar energy can be 20% lower."


                          The cost of solar power may be lower than coal within 10 years. Source: Bloomberg

      The International Renewable Energy Agency predicts that solar energy costs will further drop by 43% to 65% by 2025 and have fallen by 84% since 2009.

      From the use of diamond wire saw technology that cuts wafers more efficiently to battery technology with higher photoelectric conversion efficiency, the replacement of technology has always been the key to the development of the solar energy industry. In addition, since the solar boom started more than a decade ago, driven by economies of scale and manufacturing experience, the industry has become increasingly competitive with fossil fuels.

Janet, Director of Solar Energy Analysis, Bloomberg New Energy Finance. According to Jenny Chase, by 2025, the cost of a surface-mounted solar system above 1 MW will be reduced from the current $1.14/watt to 73 cents/watt, a decrease of 36%. GTM Research, a market research firm for the renewable energy industry, also expects that some southwestern US regions will soon approach $1/W, and may drop to 75 cents by 2021.

Sami Khoreibi, founder and CEO of Abu Dhabi company "Enviromena Power Systems," pointed out that currently the solar energy supply chain is experiencing a "Wal-Mart effect" (when consumers reduce their consumption, they will choose the lowest-priced product in each category). , which is the business model of puerile.

      In different countries and regions, the decline in the price of solar energy below coal is not the same. In regions such as Europe and Brazil that import coal or carbon trading taxes, solar and coal prices will be flat by 2020 at the latest. It may take longer if it is in a coal-rich region such as China and India.

However, the coal industry has voiced doubts. They believe that the costs involved in coal and renewable energy do not take into consideration the latter's maintenance of the backup power supply, which is mainly when there is no sun or wind. Keep working. Benjamin Sporton, chief executive of the World Coal Association, said that when these costs are included in the total cost, coal is more economical, even in 2035.

      "All advanced economies need full-time electricity supply," Sporton said. "Wind energy and solar energy can only be used as an intermittent supply. Although some renewable energy technologies have achieved significant cost reduction in recent years, considering the total system The cost is still the most important."

Despite this, the unstoppable decline in solar energy prices has made it a powerful competitor to fossil fuels.

According to Bloomberg New Energy Finance data, China, as the world's largest solar energy market, will have lower solar power costs than coal by 2030. As the government continues to reduce carbon emissions and increase the consumption of clean energy, China has surpassed Germany as the country with the largest installed capacity of solar energy in the world.

      Countries located in the “sunshine zone” have taken the lead in reducing costs, not only because of the advantages of weather conditions, but also because the government has awarded power purchase contracts through auction bidding, thereby forcing energy companies to compete against each other to reduce costs.

Last August, Chile auctioned out a 2.91 cents/kWh contract; in September of the same year, auctions in the United Arab Emirates took the news headlines at a low price of 2.42 cents/kWh. Developers predict that the cost of solar technology will continue to decline, and bid prices will appear at lower prices.