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Report: Onshore Wind Is "Fully Competitive" Versus Fossil Fuels in Some Parts of the World

Onshore wind power is “fully competitive” with gas and coal in some markets with solar not far behind, according to a report released today by Bloomberg New Energy Finance

This article was published in Scientific American’s former blog network and reflects the views of the author, not necessarily those of Scientific American


Onshore wind power is “fully competitive” with gas and coal in some parts of the world, with solar closing the gap according to a report released today by Bloomberg New Energy Finance.

In BNEF’s latest “Levelised Cost of Electricity Update” for H2 2015, analysts report that the cost of electricity from fossil fuels is increasingly expensive around the world while the cost of renewable power is dropping.

All told, these analysts found that the levelised costs for electricity from gas-fired power plants (CCGT) have 


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risen from:

  • $76 → $82 per Megawatt-hour (MWh) in the Americas

  • $85 → $93 per MWh in Asia-Pacific 

  • $103 → $118 per MWh in the EMEA region

The levelised costs for electricity from coal-fired power plants (CCGT) have 

risen from:

  • $66 → $75 per MWh in the Americas

  • $68 → $73 per MWh in Asia-Pacific, and

  • $82 → $105 per MWh in Europe

The levelised costs for electricity from wind and solar has 

dropped from: 

  • $85 → $83 per MWh (onshore wind) 

  • $176 → $174 per MWh (offshore wind)

  • $129 → $122 per MWh (solar photovoltaics - crystalline silicon)

This means that onshore wind is directly cost-competitive with fossil-fuel generation in many world markets and solar power is closing the gap. The levelised cost of electricity for nuclear power increased in the Americas and EMEA region.

The levelised cost of electricity (LCOE) metric used by BNEF in this analysis represents the cost of building and operating a power plant in terms of actual electricity generation. In this case, its units are dollars per Megawatt-hour ($/MWh). The cost includes that for capital investments, fuel, operation and maintenance (O&M), and financing. These costs are then divided among the total number of Megawatt-hours that are produced by each type of power plant.

Since solar and wind power both have no fuel costs and small O&M costs, their LCOE’s are mainly a function of the capital costs to build and install the wind and solar technology. For coal and gas-fired power plants, the variable fuel and O&M costs are non-zero and so play a bigger role in the final LCOE.

According to BNEF Energy Economics Analyst, Luke Mills:

"Generating costs continue to vary greatly from region to region, reflecting influences such as the shale gas boom in the US, changing utilisation rates in areas of high renewables penetration, the shortage of local gas production in East Asia, carbon prices in Europe, differing regulations on nuclear power across the world, and contrasting resources for solar generation…But onshore wind and solar PV are both now much more competitive against the established generation technologies than would have seemed possible only five or 10 years ago."