| Work Detail |
The consultancy also notes that the cost of battery storage projects fell by a third in 2024, to $104 per MWh, the cost of a fixed-axis solar plant fell by 21% globally and that the levelized cost of electricity for renewable technologies will fall by between 22% and 49% in 2035. BloombergNEF (BNEF) has announced the publication of its latest Levelized Cost of Electricity (LCOE) report, which forecasts that the cost of clean energy technologies such as wind, solar and batteries will continue to fall from 2% to 11% by 2025, beating last year’s record. According to the study, new wind and solar farms are already reducing the cost of production of new coal and gas plants in almost all global markets. This phenomenon is occurring despite rising import tariffs. Trade barriers may temporarily slow the decline in costs, but BNEF still expects the levelized cost of electricity for clean technologies to fall by 22% to 49% by 2035. The report says the global benchmark cost of battery storage projects fell by a third in 2024 to $104 per MWh as a supply glut due to slowing EV sales led to cheaper batteries. In addition, the cost of a typical fixed-axis solar farm fell by 21% worldwide last year. Modules were sold at or below production cost, and there is no sign of excess capacity in the solar supply chain abating between now and 2025. Batteries will cross the $100/MWh threshold in 2025, while global benchmarks for wind and solar generation are also expected to fall by 4% and 2% respectively. “New solar plants, even without subsidies, are only a short distance away from new US gas plants. This is notable because US gas prices are only a quarter of the gas prices prevailing in Europe and Asia. This raises the bar for what is possible, even in the current market, says Amar Vasdev, lead author of the report. “This opens up the possibility that solar power will become even more attractive in the coming years, especially if the US starts exporting liquefied natural gas and exposes its protected gas market to global price competition.” China’s abundance of clean technology manufacturing capacity was one of the main drivers of falling costs last year and has a major impact on project economics at home and abroad. On average, the country can produce 1 MWh of electricity from mainstream power generation technologies 11% to 64% cheaper than other markets. Although clean energy technologies have improved significantly in recent decades, there is still scope for greater technological and economic efficiencies. Looking ahead to 2035, BNEF’s global benchmark LCOEs fall by 26% for onshore wind, 22% for offshore wind, 31% for fixed-axis PV and almost 50% for battery storage. “China is exporting renewable energy technology so cheaply that the rest of the world is considering putting up barriers to protect its own industries,” says Matthias Kimmel, Head of Energy Economics at BNEF. But the overall trend of cost reduction is so strong that no one, not even President Trump, will be able to stop it.” BNEF’s Levelized Cost of Electricity, now in its 16th year, provides the industry standard for the cost of electricity generation, covering 29 technologies in more than 50 countries. |
