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Plummeting Costs Make Renewable Power a Viable Competitor to Conventional Fuels

New York Times: “The cost of providing electricity from wind and solar power plants has plummeted over the last five years, so much so that in some markets renewable generation is now cheaper than coal or natural gas.”

“Utility executives say the trend has accelerated this year, with several companies signing contracts, known as power purchase agreements, for solar or wind at prices below that of natural gas, especially in the Great Plains and Southwest, where wind and sunlight are abundant … Recent analyses show that even without … subsidies, alternative energies can often compete with traditional sources.”

“According to a study by the investment banking firm Lazard, the cost of utility-scale solar energy is as low as 5.6 cents a kilowatt-hour, and wind is as low as 1.4 cents. In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low end and coal at 6.6 cents. Without subsidies, the firm’s analysis shows, solar costs about 7.2 cents a kilowatt-hour at the low end, with wind at 3.7 cents.”

“In a straight comparison of the costs of generating power, … the amount solar and wind developers needed to earn from each kilowatt-hour they sell from new projects was often ‘essentially competitive with what would otherwise be had from newly constructed conventional generation.’”

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