Photovoltaic Energy Storage Wind Power Industry Cost Calculation

Do projections overestimate the costs of wind power and solar photovoltaics?

Projections overestimate the costs of wind power and solar photovoltaics (PV) by excluding existing flexibility strategies like dispatchable renewables, demand response, and grid expansion, and by adding inflated integration costs due to low spatial and temporal granularity .

What are the integration costs of a wind or solar plant?

Integration costs may be incurred by the wind or solar plant, but are often borne by existing generators or elsewhere in the system. While dispatchable plants also impose integration costs, the integration costs of intermittent plants become significantly larger with increasing intermittent generation on the grid.

What determines the value of wind and solar power?

Since the price of electricity varies over time, but wind and solar plants (without storage) cannot choose when to generate, the value of wind and solar power will be based on when the wind blows or sun shines. In addition, generation revenues depend on location—for both the quality of the wind or solar resource and the power prices in the region.

What is the intermittency of wind and solar power?

The intermittency of wind and solar power also affects the costs of their integration into the grid. Integration costs may be incurred by the wind or solar plant, but are often borne by existing generators or elsewhere in the system.

How will wind and solar generation costs change over time?

Whereas wind and solar generation costs are projected to decrease modestly over time—a 26 percent decline in wind and 32 percent decline in solar LCOE over the next 22 years—generation value and integration costs can change more rapidly.

How much will unsubsidized wind and solar LCOE cost?

Unsubsidized wind and solar LCOE have declined dramatically over the past decade—average estimates from the investment bank Lazard were $135/MWh for wind and $359/MWh for solar in 2009 (in 2009$) compared with $43/MWh for both in 2018 (in 2018$). However, future generation cost reductions are likely to be far more moderate.