Agora Energiewende this week released the results of a cost analysis of four different CO2-free power scenarios in Europe. Says Patrick Graichen, executive director of Agora:
Wind and solar systems will dominate the power system in increasingly more countries. The battle for the cheapest CO2-free power mix is decided. In the future wind and solar will play an ever greater role in countries across the world as a source of power.
The German “think-&-do-tank,” funded by the Mercator Foundation and European Climate Foundation, came to two conclusions:
New wind and solar can provide carbon-free power at up to 50% lower generation costs than new nuclear or carbon capture and storage.
A reliable power system based on wind and solar with natural gas backup is 20% cheaper than a system of new nuclear power stations combined with gas.
Considering two decades of plummeting costs for wind and photovoltaic power, Agora looked at how wind and solar systems now compare to other decarbonization technologies (nuclear power and carbon capture and storage). The company based its “conservative” conclusions on a look at current feed-in tariffs in Germany; the agreed Hinkley Point C (UK) strike price; and the latest cost estimates for CCS (likely low) from studies commissioned by the UK Department of Energy and Climate Change in relation to the White Rose (coal) and Peterhead (gas) CCS plants, planned to be operational by 2020.
The chart above compares average remuneration for new nuclear power, PV, wind (onshore and offshore), and the levelized costs of electricity for gas/coal CCS.
Although further cost reductions in PV and wind are expected to result from technological advancements, the decarbonization report factors in no future cost reductions in any of the technologies. Taking into account backup capacities and peak loads (not usually factored into the levelized cost of electricity), study authors found that the higher power generation cost of nuclear dwarfs the cost of backup gas capacity for the renewables options.
Agora advised last year that Chancellor Angela Merkel’s government cap aid to clean-energy developers in order to offset the costs of closing down nuclear reactors and expanding renewables. Agora commissioned this year’s study from Prognos AG, a Swiss economic research consultancy established in 1959. It is freely available on the Agora website.
h/t Wiwo Green