Solar and wind power with storage cheaper than coal and gas
Photovoltaic and wind energy systems can now produce electricity much more cheaply than conventional power plants, even in combination with battery storage systems – this is shown by the new edition of the Fraunhofer ISE study on the levelized cost of electricity.
09.08.2024 – Fraunhofer ISE has been calculating the so-called levelized cost of electricity – i.e. the average generation costs per kilowatt hour of electricity – for Germany at regular intervals since 2010. For the first time, the new analysis also includes the levelized cost of electricity for agrivoltaics, hydrogen power plants and new nuclear power plants. In addition to the current status for 2024, the researchers also provide a forecast for the cost development up to 2045.
Levelized cost of electricity for renewable energies and conventional power plants at locations in Germany in 2024. Specific electricity generation costs are taken into account with a minimum and a maximum value per technology. © Fraunhofer ISE
Solar and onshore wind energy particularly economical
According to the study's calculations, ground-mounted PV systems and onshore wind turbines are the most cost-effective technologies in Germany, not only among renewable energies, but among all types of power plants, with costs of 4.1 to 9.2 cents per kilowatt hour. The levelized cost of electricity for PV battery systems varies between 6.0 and 22.5 cents per kilowatt hour in the analysis for Germany.
The wide range results from the high cost differences for battery systems (400 to 1000 euros per kilowatt hour) in combination with the cost differences in PV systems and the different levels of solar radiation at the plant location, the researchers explain. "These calculations show that the large-scale projects currently starting in Germany with a combination of ground-mounted PV system, wind farm and stationary battery storage systems are good investments," says Christoph Kost, head of the Department of Energy Systems Analysis at Fraunhofer ISE and lead author of the study. "The combination allows network capacities to be better utilised here, for example."
Development of electricity generation costs of renewable generation plants and natural gas or hydrogen-fired power plants without heat extraction in Germany by 2045. ©
Levelized cost of electricity for renewable energies will continue to fall until 2045
The study team takes into account the cost developments for the construction and operation of the plants up to 2045 for all power plant technologies. According to this, in 2045, the levelized cost of electricity for small rooftop PV systems will be between 4.9 and 10.4 cents per kilowatt hour and between 3.1 and 5.0 cents per kilowatt hour for ground-mounted PV systems. "Even small PV battery systems could then achieve electricity generation costs of between 7 and 19 cents per kilowatt hour, provided that the prices for battery storage systems fall to the assumed 180 to 700 euros per kilowatt hour," explains Verena Fluri, scientist at Fraunhofer ISE and co-author of the study.
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New wind turbines built in 2045 could produce onshore electricity at a cost of between 3.7 and 7.9 cents per kilowatt hour. Offshore wind turbines also have a strong potential for cost reduction. The research team expects price improvements for wind energy mainly thanks to higher full-load hours and larger turbines.
Flexible power plants necessary, but with significantly higher levelized costs of electricity
In a climate-neutral energy system in which the share of renewable energies is high, flexibly controllable power plants are needed as back-ups in addition to battery storage systems. In the future, biogas and biomass power plants will be able to cover part of the required capacity. In the study, the levelized costs of electricity were calculated with a flexible driving style, i.e. with medium to low full load hours. They are between 20.2 and 32.5 cents per kilowatt hour for biogas. For plants with solid biomass, the levelized cost of electricity is significantly lower at values between 11.5 and 23.5 cents per kilowatt hour.
For a hydrogen-powered gas and steam turbine power plant built in 2030, the study shows 23.6 - 43.3 cents per kilowatt hour in highly flexible operation. The levelized cost of electricity of flexible technologies is significantly higher than the cost of renewable energies, as CO2costs and the procurement of hydrogen are key cost drivers. "We need them as an important addition. However, their operation will be limited to the bare minimum," says Paul Müller, also a scientist at Fraunhofer ISE and responsible for this part of the study. He considers 1,000 to 2,000 operating hours in 2045 to be realistic. well