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Wind and solar projected to be cost-competitive without subsidies by 2025

Wind and solar projected to be cost-competitive without subsidies by 2025
Some states, like the state of Wyoming, have large untapped wind power potential after 2025

Wind and solar power electricity generation in the western United States is projected to become cost-competitive without help from federal subsidies by 2025, according to a study conducted by the National Renewable Energy Laboratory.

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According to the report, “Beyond Renewable Portfolio Standards: An Assessment of Regional Supply and Demand Conditions Affecting the Future of Renewable Energy in the West,” several western states have established renewable portfolio standard requirements that are the primary drivers of the significant expansion of wind, solar, and geothermal power.

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“The electric generation portfolio of the future could be both cost effective and diverse. If renewable and natural gas cost about the same per kilowatt-hour delivered, then value to customers becomes a matter of finding the right mix,” said the report’s lead author David Hurlbut, and N.R.E.L.’s senior analyst.

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“Renewables energy development, to date, has mostly been in response to state mandates. What this study does is look at where the most cost-effective yet untapped resources are likely to be when the last of these mandates culminates in 2025, and what it might cost to connect them to the best-matched population centers,” Mr. Hurlbut added.

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However, the results from the study show that geothermal power will likely remain more costly on an all-in per-megawatt hour basis than equivalent combined cycle natural gas turbine or other renewable power options in the West out to 2025. As for wind and solar, the gap could become small if they were built in ideal locations.

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Findings of the study show that after 2025, Wyoming and New Mexico are the states that are likely to have large amounts of untapped, developable wind potential, with New Mexico having the advantage of having California and Arizona as close markets. The state of Montana too is projected to emerge as attractive area for wind developers, as both Montana and Wyoming is projected to meet the demands of the Pacific Northwest.

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When it comes to solar power, California, Arizona, and Nevada are projected to have surpluses of prime-quality solar resources. No one state among the three is likely to have a strong comparative advantage over the others within the three-state market, unless environmental or other challenges limit in-state development.

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But despite the potentials that some states may hold, it is stressed that any further development of solar, wind, and geothermal beyond 2025 will depend on several factors such as location, what it takes to get them to market, and how cost effectively they fit into a diverse portfolio of electric generation technologies. – EcoSeed Staff

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