When solar energy becoming the cheapest

Solar energy is the cheapest electricity

For a few years now, the world's energy markets have been changing rapidly, but this time they have reached a major inflection point where solar energy is becoming the cheapest way to obtain electricity thanks to the new emerging markets. Although the new reality could be sensed according to some specialists, the surprise is that it has occurred in record time.

Although we are aware that solar energy at some point in the past has been lower in cost than wind energy, it has always been individualized, and in response to especially competitive tenders, such as in the Middle East.

But now, the change is more radical if we look at the unsubsidized solar energy that is competing strongly with natural gas or coal on a global scale, actually, at prices that amount to half the cost. And if we look with reference to wind, the solar projects that are being implemented in emerging markets are showing a lower cost in construction with reference to wind farms according to the report issued by Bloomberg New Energy Finance.

If we look at the previous graph of the 58 emerging economies (including China, India and Brazil) outside the OECD. We realize that the average cost of new wind and solar energy are at the same level, in addition to verifying that following the line of the graph, solar energy is destined to fall below wind. In reality, few predicted that this effect would occur so soon!

The half price of coal

This year it has been possible to verify a remarkable race for solar energy in all its aspects, from the technological part, to the auctions in which all private companies compete for these enormous contracts for the supply of electricity, month after month an energy record is set cheapest solar. In January, a contract began to produce electricity for $ 64 per megawatt hour from the country of India, a new agreement in August lowered the figure to just over $ 29 megawatt hour from the Latin American region, in Chile . That last point is a milestone in terms of the cost of electricity, being almost half the price with what coal is offered.

With the report Levelized Costs Of Energy(Levelized Costs of the different Energy technologies, without subsidies). It is found that each year, renewables are cheaper and conventional ones more expensive.

And the trend of level costs is in constant decline …

We must remember that Chile has reached the first place in renewable energy investment in the Latin American and Caribbean area. A record investment in unconventional renewable energy projects, which has more than doubled in a short period of time - from $ 1.3 billion in 2014 to $ 3.2 billion in 2015.

Why emerging countries are on the rise in renewables

Emerging countries are doing much more than developed in terms of renewable energy and we can understand it from the following video by the director of Blooberg New Energy for Latin America who talks about the energy revolution they are undergoing on renewable energy projects in the 58 countries of the world.

If we look at investment in renewable energy, emerging markets have taken the lead over the 35 member countries of the Organization for Economic Cooperation and Development (OECD), spending $ 154.1 billion in 2015 compared to $ 153.7 billion of those. richer countries. Growth rates in renewable energy deployment are highest in these emerging markets, so they are likely to remain the renewable energy leaders indefinitely, especially now that three-quarters have set long-term renewable energy targets.

Not everything is so pretty

The level of foreign capital involved in supporting clean energy varies widely across the 58 Climatescope countries. Almost all of these investments from China come from banks and within its borders. At the other end of the spectrum, clean energy in Mexico or Chile has been almost entirely externally financed and has had the support of some of the world's leading multinational energy companies. And investment in the territory of Brazil and South Africa comes from a heterogeneous group of funders. Remembering that the economic benefits that can be produced will be out of the hands of the countries that produce the cheapest solar energy.

The challenges of such rapid growth and record levels of investment also bring many headaches. The rapid pace of construction, the unstable nature of various grids in these countries, and the intermittency of renewable energy generation is contributing to technical and financial challenges..

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