Dramatic price drops
Words: Steve Sawyer, secretary general at GWEC
The dramatic drop in price of solar and wind generated electricity, for solar in particular, has grabbed a lot of attention lately. Prices in the range of $US 0.03-0.04/kWh have come through in tenders from Peru to Mexico and Morocco to South Africa. It is almost to the point where in the big picture, price doesn’t matter so much anymore. As penetration levels begin to increase, the emphasis will be much more on how to integrate them into the power system, or rather to transform the power system to work with wind and solar’s particular characteristics. But when people are talking about wind, they are increasingly adding ‘onshore’, to distinguish it from its large, slow and expensive cousin, offshore wind. But maybe not for much longer.
There has been a lot of positive news from the increasingly dynamic offshore sector of late. Until recently the best prices we had heard of for offshore was €103/MWh for the Horns Rev extension in early 2015, which was considered a very positive sign of things to come.
However, just about everyone was surprised by the record low prices in the Dutch auction for 700 MW at the Borssele offshore site near the Belgian border in the beginning of July – less than €73/MWh; which, if you add the cost of transmission would be somewhere in the low to mid-80s, another record. The next tender for another 700 MW is now open for bids which will close on 29 September and be awarded around the end of this year, where similar or perhaps even lower prices are expected. The Dutch plan to tender another 700 MW per year in 2017, 2018 and 2019.