Research shows costs of German renewables gaining on fossils

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A scientific research institute in Germany has found that the costs of renewables in the country have come down sufficiently to almost be on a par with the cost of fossil-fuel based power generation.

Fraunhofer ISE believes the costs of solar and wind power will be lower still by 2030, according to its findings, contained in the report, “Renewable energy power generation costs”.

Renewable v fossil fuels

Scientists at the Freiburg-based research institute have analysed solar photovoltaic plants at locations with a horizontal global irradiation of between 1,000 and 1,200 kWh per square metre per year.

They found that production costs for ground-based arrays being erected in 2013 in southern Germany come down to €0.08 ($0.11) per kWh, while smaller, rooftop plants even in northern Germany produce at a cost of €0.14 per kWh.

Costs from both are considerably lower than the average household price for electricity, which now averages €0.29 per kWh.

For wind power analysis the data shows that in very good locations onshore wind turbines produce electricity at a lower cost than coal or gas and steam power plants. The electricity generation costs for onshore wind energy is today from 0.05 to 0.11 € / kWh.

In contrast, offshore wind turbines record significantly higher electricity costs despite higher full load hours with 0.12 to 0.19 € / kWh. In offshore technology, however, there is still considerable potential for cost reduction.

There is other evidence to suggest that surpassing conventional power generation costs can become a reality. Siemensà‚ (NYSE:à‚ SI) said it planned to reduce the electricity costs for offshore wind energy by the end of the decade, up to 40 per cent.

For the forecast to work, it is assumed that the cost of CO2 emissions will continue to rise in the future. Currently, especially brown coal power plants still benefit from the low CO2 allowance prices. Meanwhile wind and solar costs will continue to fall, so that they can compete with conventional energy sources.

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