Stelco Inc. isn't out of bankruptcy protection just yet, but the steel giant appears to have the wind back in its sails.
Canada's largest steel producer, which is at the centre of a $350 million lawsuit after backing out of a major wind development project in April, has decided to go it alone with plans for a 40-turbine wind farm around its Lake Erie steel plant in Nanticoke.
If completed, the project would produce enough electricity to power more than 12,000 homes in a region known for its coal-fired Nanticoke plant, the province's worst polluter.
"This facility would generate up to approximately 60 megawatts of electricity to be dispatched to the province of Ontario grid via an existing interconnection agreement with the Hydro One system," states one advertisement the company recently placed in a Haldimand County newspaper.
Haldimand mayor Marie Trainer was notified in an Aug. 19 letter, obtained by the Toronto Star, that the Hamilton-based company has commenced an environmental assessment of the planned wind farm location, as required by the Ministry of Environment.
Dean Comand, who is leading the project for Stelco, said the company is committed to green energy and is trying to determine whether the wind farm will be economically viable. He would not say whether the project is part of a longer-term strategy of luring a wind manufacturer to the area.
"We're just doing all the detail engineering now," said Comand. "We're looking at quotes on equipment, and interconnection agreements."
Stelco, which is legally insolvent and expected to emerge from creditors' protection on Sept. 9, has a reason to warm up to wind power. The wind industry is the second-largest buyer of steel, behind the automotive industry, in countries such as Germany — good news in a sector suffering from overcapacity.
Stelco entered a partnership in the summer of 2004 with a small consulting firm called Georgian Windpower. The two companies had a 20-year plan to install 2,200 megawatts of wind power in the area, beginning with an initial 80-megawatt wind farm at Stelco's Nanticoke Industrial Park.
The idea was to attract a wind turbine manufacturer to the region, create thousands of local jobs and secure Stelco a major next-door customer for its steel. But Stelco pulled out of the project on April 15, two days before Georgian Windpower was to secure $150 million in funding for the development.
Georgian Windpower responded by filing a $350 million breach-of-contract lawsuit, alleging that Stelco planned to use confidential information from the partnership, including wind assessments and a detailed economic analysis of the project, for its own purposes.
The allegations have not be proven in court, but Justice James Farley, who is presiding over Stelco's court-supervised restructuring, has given Georgian Windpower the go-ahead to proceed with its case once the steel giant emerges from court protection.
Michael Monette, president of Georgian Windpower, said he's surprised that Stelco is moving forward on its own while seeming to completely ignore the major lawsuit over its head.
"It's nice to see they understand the value of this project.... But this is just another indication that they're paying no respect whatsoever for the agreement we have in place," said Monette.
He said Georgian Windpower has a binding 75-year land agreement with Stelco for wind energy development. Stelco has argued in court documents that it had the right to terminate the agreement on 60 days notice.
Stelco official Helen Reeves said there's no relationship between the two projects.
UK Coal-Free Grid Streak highlights record hours without coal, as renewable energy, wind and solar boost electricity generation, cutting CO2 emissions, reducing fossil fuel reliance, and accelerating grid decarbonization amid volatile gas markets.
Key Points
It is the UKs longest coal-free power run, driven by renewables, signaling decarbonization and reduced gas reliance.
✅ Record-breaking hours of electricity with zero coal generation
✅ Enabled by wind, solar, and growing offshore wind capacity
✅ Highlights need to cut gas use and expand renewable investment
Today is the fourth the UK has entered with not a watt of electricity generated by coal.
It’s the longest such streak since the 1880s and comes only days after the last modern era coal-free power record of 55 hours was set.
That represents good news for those of us who have children and would rather like there to be a planet for them to live on when we’re gone.
Coal generated power is dirty power, and not just through the carbon that gets pumped into the atmosphere when it burns.
The fact that the UK is increasingly able to call upon cleaner alternatives for its requirements, to the extent that records are being regularly broken and coal's share has fallen to record lows, is a welcome development.
The trouble is one of those alternatives is gas, and while it is better than coal it still throws off CO2, among other pollutants. The UK’s use of it, for electricity generation and most of its heating, comes with the added disadvantage of leaving it in hock to volatile international markets and producers that aren’t always friendly.
It was only last month, with the country in the middle of a cold snap, that the Grid was issuing a deficit warning (its first in eight years).
As such, Greenpeace’s call for more investment in renewable energy technology and generation, including solar, onshore wind and offshore wind, which is making an increasing contribution as wind beat coal in 2016 demonstrated, was well made.
Those who complain about onshore wind farms, particularly when they are built in windy places that are pretty, seem willfully blind to the pollution caused by gas.
The need to be listened to less. So do those, like British Gas owner Centrica, that bellyache about green taxes.
It bears repeating that fossil fuels are subsidised still more. It’s just that the subsidies are typically hidden.
A report issued last year by a coalition of environmental organisations found the UK provided $972m (£695m) of annual financing for fossil fuels on average between 2013 and 2015, compared with $172m for renewable energy.
But while they come up with wildly varying amounts as a result of wildly varying approaches, the OECD, the IMF and the International Energy Agency have all quantified substantial subsidies for fossils fuels. Their annual estimates have ranged from $160bn to $5.3tn (yes you read that rate and the number was the IMF’s) globally.
So by all means celebrate coal free days, and a full week without coal power as milestones. But we need more of them more quickly and we need more renewable energy to pick up the slack. As such, the philosophy and approach of government needs to change.
Global Power Sector CO2 Surge 2021 shows electricity demand outpacing renewable energy, with coal and fossil fuels rebounding, undermining green recovery goals and climate change targets flagged by the IEA and IPCC.
Key Points
Record rise in power sector CO2 in 2021 as demand outpaced renewables and coal rebounded, undermining a green recovery.
✅ Electricity demand rose 5% above pre-pandemic levels
✅ Fossil fuels supplied 61% of power; coal led the rebound
✅ Wind and solar grew 15% but lagged demand
Carbon dioxide emissions from the global electric power sector surged past pre-pandemic levels to record highs in the first half of 2021, according to new research by London-based environmental think tank Ember.
Electricity demand and emissions are now 5% higher than where they were before the Covid-19 outbreak, which prompted worldwide lockdowns that led to a temporary drop in global greenhouse gas emissions. Electricity demand also surpassed the growth of renewable energy, and surging electricity demand is putting power systems under strain, the analysis found.
The findings signal a failure of countries to achieve a so-called “green recovery” that would entail shifting away from fossil fuels toward renewable energy, though European responses to Covid-19 have accelerated the electricity system transition by about a decade, to avoid the worst consequences of climate change.
The report found that 61% of the world’s electricity still came from fossil fuels in 2020. Five G-20 countries had more than 75% of their electricity supplied from fossil fuels last year, with Saudi Arabia at 100%, South Africa at 89%, Indonesia at 83%, Mexico at 75% and Australia at 75%.
Coal generation did fall a record 4% in 2020, but overall coal supplied 43% of the additional energy demand between 2019 and 2020, with soaring electricity and coal use underscoring persistent demand pressures. Asia currently generates 77% of the world’s coal electricity and China alone generates 53%, up from 44% in 2015.
The world’s transition out of coal power, which contributes to roughly 30% of the world’s greenhouse gas emissions, is happening far too slowly to avoid the worst impacts of climate change, the study warned. And the International Energy Agency forecasts coal generation will rebound in 2021 as electricity demand picks up again, even as renewables are poised to eclipse coal by 2025 according to other analyses.
“Progress is nowhere near fast enough. Despite coal’s record drop during the pandemic, it still fell short of what is needed,” Ember lead analyst Dave Jones said in a statement.
Jones said coal power usage must collapse by 80% by the end of the decade to avoid dangerous levels of global warming above 1.5 degrees Celsius (2.7 degrees Fahrenheit).
“We need to build enough clean electricity to simultaneously replace coal and electrify the global economy,” Jones said. “World leaders have yet to wake up to the enormity of the challenge.”
The findings come ahead of a major U.N. climate conference in Glasgow, Scotland, in November, where negotiators will push for more ambitious climate action and emissions reduction pledges from nations.
Without immediate, rapid and large-scale reductions to global emissions, scientists of the Intergovernmental Panel on Climate Change warn that the average global temperature will likely cross the 1.5 degrees Celsius threshold within 20 years.
The study also highlighted some upsides. Wind and solar generation, for instance, rose by 15% in 2020, and low-emissions sources are set to cover almost all the growth in global electricity demand in the next three years, producing nearly a tenth of the world’s electricity last year and doubling production since 2015.
Some countries now get about 10% of their electricity from wind and solar, including India, China, Japan, Brazil. The U.S. and Europe have experienced the biggest growth in wind and solar, and in the EU, wind and solar generated more electricity than gas last year, with Germany at 33% and the U.K. leads the G20 for wind power at 29%.
Great Northern Transmission Line delivers 250 MW of carbon-free hydropower from Manitoba Hydro, strengthening Midwest grid reliability, enabling wind storage balancing, and advancing Minnesota Power's EnergyForward strategy for cleaner, renewable energy across the region.
Key Points
A 500 kV cross-border line delivering 250 MW of carbon-free hydropower, strengthening reliability and enabling renewables.
✅ 500 kV, 224-mile line from Manitoba to Minnesota
✅ Delivers 250 MW hydropower via ALLETE-Minnesota Power
✅ Enables wind storage and grid balancing with Manitoba Hydro
Minnesota Power, a utility division of ALLETE Inc. (NYSE:ALE), has energized its Great Northern Transmission Line, bringing online an innovative delivery and storage system for renewable energy that spans two states and one Canadian province, similar to the Maritime Link project in Atlantic Canada.
The 500 kV line is now delivering 250 megawatts of carbon-free hydropower from Manitoba, Canada, to Minnesota Power customers.
Minnesota Power completed the Great Northern Transmission Line (GNTL) in February 2020, ahead of schedule and under budget. The 224-mile line runs from the Canadian border in Roseau County to a substation near Grand Rapids, Minnesota. It consists of 800 tower structures which were fabricated in the United States and used 10,000 tons of North American steel. About 2,200 miles of wire were required to install the line's conductors. The GNTL also is contributing significant property tax revenue to local communities along the route.
"This is such an incredible achievement for Minnesota Power, ALLETE, and our region, and is the culmination of a decade-long vision brought to life by our talented and dedicated employees," said ALLETE President and CEO Bethany Owen. "The GNTL will help Minnesota Power to provide our customers with 50 percent renewable energy less than a year from now. As part of our EnergyForward strategy, it also strengthens the grid across the Midwest and in Canada, enhancing reliability for all of our customers."
With the GNTL energized and connected to Manitoba Hydro's recently completed Manitoba-Minnesota Transmission Project at the border, the companies now have a unique "wind storage" mechanism that quickly balances energy supply and demand in Minnesota and Manitoba, and enables a larger role for renewables in the North American energy grid.
The GNTL and its delivery of carbon-free hydropower are important components of Minnesota Power's EnergyForward strategy to transition away from coal and add renewable power sources while maintaining reliable and affordable service for customers, echoing interties like the Maritime Link that facilitate regional power flows. It also is part of a broader ALLETE strategy to advance and invest in critical regional transmission and distribution infrastructure, such as the TransWest Express transmission project, to ensure grid integrity and enable cleaner energy to reduce carbon emissions.
"The seed for this renewable energy initiative was planted in 2008 when Minnesota Power proposed purchasing 250 megawatts of hydropower from Manitoba Hydro. Beyond the transmission line, it also included a creative asset swap to move wind power from North Dakota to Minnesota, innovative power purchase agreements, and a remarkable advocacy process to find an acceptable route for the GNTL," said ALLETE Executive Chairman Al Hodnik. "It marries wind and water in a unique connection that will help transform the energy landscape of North America and reduce carbon emissions related to the existential threat of climate change."
Minnesota Power and Manitoba Hydro, a provincial Crown Corporation, coordinated on the project from the beginning, navigating National Energy Board reviews along the way. It is based on the companies' shared values of integrity, environmental stewardship and community engagement.
"The completion of Minnesota Power's Great Northern Transmission Line and our Manitoba-Minnesota Transmission Project is a testament to the creativity, perseverance, cooperation and skills of hundreds of people over so many years on both sides of the border," said Jay Grewal, president and CEO of Manitoba Hydro. "Perhaps even more importantly, it is a testament to the wonderful, longstanding relationship between our two companies and two countries. It shows just how much we can accomplish when we all work together toward a common goal."
Minnesota Power engaged federal, state and local agencies; the sovereign Red Lake Nation and other tribes, reflecting First Nations involvement in major transmission planning; and landowners along the proposed routes beginning in 2012. Through 75 voluntary meetings and other outreach forums, a preferred route was selected with strong support from stakeholders that was approved by the Minnesota Public Utilities Commission in April 2016.
A four-year state and federal regulatory process culminated in late 2016 when the federal Department of Energy approved a Presidential Permit for the GNTL, similar to the New England Clean Power Link process, needed because of the international border crossing. Construction of the line began in early 2017.
"A robust stakeholder process is essential to the success of any project, but especially when building a project of this scope," Owen said. "We appreciated the early engagement and support from stakeholders, local communities and tribes, agencies and regulators through the many approval milestones to the completion of the GNTL."
ITER Nuclear Fusion advances tokamak magnetic confinement, heating deuterium-tritium plasma with superconducting magnets, targeting net energy gain, tritium breeding, and steam-turbine power, while complementing laser inertial confinement milestones for grid-scale electricity and 2025 startup goals.
Key Points
ITER Nuclear Fusion is a tokamak project confining D-T plasma with magnets to achieve net energy gain and clean power.
✅ Tokamak magnetic confinement with high-temp superconducting coils
✅ Deuterium-tritium fuel cycle with on-site tritium breeding
✅ Targets net energy gain and grid-scale, low-carbon electricity
It sounds like the stuff of dreams: a virtually limitless source of energy that doesn’t produce greenhouse gases or radioactive waste. That’s the promise of nuclear fusion, often described as the holy grail of clean energy by proponents, which for decades has been nothing more than a fantasy due to insurmountable technical challenges. But things are heating up in what has turned into a race to create what amounts to an artificial sun here on Earth, one that can provide power for our kettles, cars and light bulbs.
Today’s nuclear power plants create electricity through nuclear fission, in which atoms are split, with next-gen nuclear power exploring smaller, cheaper, safer designs that remain distinct from fusion. Nuclear fusion however, involves combining atomic nuclei to release energy. It’s the same reaction that’s taking place at the Sun’s core. But overcoming the natural repulsion between atomic nuclei and maintaining the right conditions for fusion to occur isn’t straightforward. And doing so in a way that produces more energy than the reaction consumes has been beyond the grasp of the finest minds in physics for decades.
But perhaps not for much longer. Some major technical challenges have been overcome in the past few years and governments around the world have been pouring money into fusion power research as part of a broader green industrial revolution under way in several regions. There are also over 20 private ventures in the UK, US, Europe, China and Australia vying to be the first to make fusion energy production a reality.
“People are saying, ‘If it really is the ultimate solution, let’s find out whether it works or not,’” says Dr Tim Luce, head of science and operation at the International Thermonuclear Experimental Reactor (ITER), being built in southeast France. ITER is the biggest throw of the fusion dice yet.
Its $22bn (£15.9bn) build cost is being met by the governments of two-thirds of the world’s population, including the EU, the US, China and Russia, at a time when Europe is losing nuclear power and needs energy, and when it’s fired up in 2025 it’ll be the world’s largest fusion reactor. If it works, ITER will transform fusion power from being the stuff of dreams into a viable energy source.
Constructing a nuclear fusion reactor ITER will be a tokamak reactor – thought to be the best hope for fusion power. Inside a tokamak, a gas, often a hydrogen isotope called deuterium, is subjected to intense heat and pressure, forcing electrons out of the atoms. This creates a plasma – a superheated, ionised gas – that has to be contained by intense magnetic fields.
The containment is vital, as no material on Earth could withstand the intense heat (100,000,000°C and above) that the plasma has to reach so that fusion can begin. It’s close to 10 times the heat at the Sun’s core, and temperatures like that are needed in a tokamak because the gravitational pressure within the Sun can’t be recreated.
When atomic nuclei do start to fuse, vast amounts of energy are released. While the experimental reactors currently in operation release that energy as heat, in a fusion reactor power plant, the heat would be used to produce steam that would drive turbines to generate electricity, even as some envision nuclear beyond electricity for industrial heat and fuels.
Tokamaks aren’t the only fusion reactors being tried. Another type of reactor uses lasers to heat and compress a hydrogen fuel to initiate fusion. In August 2021, one such device at the National Ignition Facility, at the Lawrence Livermore National Laboratory in California, generated 1.35 megajoules of energy. This record-breaking figure brings fusion power a step closer to net energy gain, but most hopes are still pinned on tokamak reactors rather than lasers.
In June 2021, China’s Experimental Advanced Superconducting Tokamak (EAST) reactor maintained a plasma for 101 seconds at 120,000,000°C. Before that, the record was 20 seconds. Ultimately, a fusion reactor would need to sustain the plasma indefinitely – or at least for eight-hour ‘pulses’ during periods of peak electricity demand.
A real game-changer for tokamaks has been the magnets used to produce the magnetic field. “We know how to make magnets that generate a very high magnetic field from copper or other kinds of metal, but you would pay a fortune for the electricity. It wouldn’t be a net energy gain from the plant,” says Luce.
One route for nuclear fusion is to use atoms of deuterium and tritium, both isotopes of hydrogen. They fuse under incredible heat and pressure, and the resulting products release energy as heat
The solution is to use high-temperature, superconducting magnets made from superconducting wire, or ‘tape’, that has no electrical resistance. These magnets can create intense magnetic fields and don’t lose energy as heat.
“High temperature superconductivity has been known about for 35 years. But the manufacturing capability to make tape in the lengths that would be required to make a reasonable fusion coil has just recently been developed,” says Luce. One of ITER’s magnets, the central solenoid, will produce a field of 13 tesla – 280,000 times Earth’s magnetic field.
The inner walls of ITER’s vacuum vessel, where the fusion will occur, will be lined with beryllium, a metal that won’t contaminate the plasma much if they touch. At the bottom is the divertor that will keep the temperature inside the reactor under control.
“The heat load on the divertor can be as large as in a rocket nozzle,” says Luce. “Rocket nozzles work because you can get into orbit within minutes and in space it’s really cold.” In a fusion reactor, a divertor would need to withstand this heat indefinitely and at ITER they’ll be testing one made out of tungsten.
Meanwhile, in the US, the National Spherical Torus Experiment – Upgrade (NSTX-U) fusion reactor will be fired up in the autumn of 2022, while efforts in advanced fission such as a mini-reactor design are also progressing. One of its priorities will be to see whether lining the reactor with lithium helps to keep the plasma stable.
Choosing a fuel Instead of just using deuterium as the fusion fuel, ITER will use deuterium mixed with tritium, another hydrogen isotope. The deuterium-tritium blend offers the best chance of getting significantly more power out than is put in. Proponents of fusion power say one reason the technology is safe is that the fuel needs to be constantly fed into the reactor to keep fusion happening, making a runaway reaction impossible.
Deuterium can be extracted from seawater, so there’s a virtually limitless supply of it. But only 20kg of tritium are thought to exist worldwide, so fusion power plants will have to produce it (ITER will develop technology to ‘breed’ tritium). While some radioactive waste will be produced in a fusion plant, it’ll have a lifetime of around 100 years, rather than the thousands of years from fission.
At the time of writing in September, researchers at the Joint European Torus (JET) fusion reactor in Oxfordshire were due to start their deuterium-tritium fusion reactions. “JET will help ITER prepare a choice of machine parameters to optimise the fusion power,” says Dr Joelle Mailloux, one of the scientific programme leaders at JET. These parameters will include finding the best combination of deuterium and tritium, and establishing how the current is increased in the magnets before fusion starts.
The groundwork laid down at JET should accelerate ITER’s efforts to accomplish net energy gain. ITER will produce ‘first plasma’ in December 2025 and be cranked up to full power over the following decade. Its plasma temperature will reach 150,000,000°C and its target is to produce 500 megawatts of fusion power for every 50 megawatts of input heating power.
“If ITER is successful, it’ll eliminate most, if not all, doubts about the science and liberate money for technology development,” says Luce. That technology development will be demonstration fusion power plants that actually produce electricity, where advanced reactors can build on decades of expertise. “ITER is opening the door and saying, yeah, this works – the science is there.”
Ontario Competitive Energy Procurement accelerates renewables, boosts grid reliability, and invites competitive bids across solar, wind, natural gas, and storage, driving innovation, lower costs, and decarbonization to meet rising electricity demand and ensure power supply.
Key Points
Ontario Competitive Energy Procurement is a competitive bidding program to deliver reliable, low-carbon electricity.
✅ Competitive bids from renewables, gas, and storage
✅ Targets grid reliability, affordability, and emissions
Ontario has recently marked a significant milestone in its energy sector with the launch of what is being touted as the largest competitive energy procurement process in the province’s history. This ambitious initiative is set to transform the province’s energy landscape through a broader market overhaul that fosters innovation, enhances reliability, and addresses the growing demands of Ontario’s diverse population.
A New Era of Energy Procurement
The Ontario government’s move to initiate this massive competitive procurement process underscores a strategic shift towards modernizing and diversifying the province’s energy portfolio. This procurement exercise will invite bids from a broad spectrum of energy suppliers and technologies, ranging from traditional sources like natural gas to renewable energy options such as solar and wind power. The aim is to secure a reliable and cost-effective energy supply that aligns with Ontario’s long-term environmental and economic goals.
This historic procurement process represents a major leap from previous approaches by emphasizing a competitive marketplace where various energy providers can compete on an equal footing through electricity auctions and transparent bidding. By doing so, the government hopes to drive down costs, encourage technological advancements, and ensure that Ontarians benefit from a more dynamic and resilient energy system.
Key Objectives and Benefits
The primary objectives of this procurement initiative are multifaceted. First and foremost, it seeks to enhance the reliability of Ontario’s electricity grid. As the province experiences population growth and increased energy demands, maintaining a stable and dependable supply of electricity is crucial, and interprovincial imports through an electricity deal with Quebec can complement local generation. This procurement process will help identify and integrate new sources of power that can meet these demands effectively.
Another significant goal is to promote environmental sustainability. Ontario has committed to reducing its greenhouse gas emissions through Clean Electricity Regulations and transitioning to a cleaner energy mix. By inviting bids from renewable energy sources and innovative technologies, the government aims to support its climate action plan and contribute to the province’s carbon reduction targets.
Cost-effectiveness is also a central focus of the procurement process. By creating a competitive environment, the government anticipates that energy providers will strive to offer more attractive pricing structures and fair electricity cost allocation practices for ratepayers. This, in turn, could lead to lower energy costs for consumers and businesses, fostering economic growth and improving affordability.
The Competitive Landscape
The competitive energy procurement process will be structured to encourage participation from a wide range of energy providers. This includes not only established companies but also emerging players and startups with innovative technologies. By fostering a diverse pool of bidders, the government aims to ensure that all viable options are considered, ultimately leading to a more robust and adaptable energy system.
Additionally, the process will likely involve various stages of evaluation, including technical assessments, financial analyses, and environmental impact reviews. This thorough evaluation will help ensure that selected projects meet the highest standards of performance and sustainability.
Implications for Stakeholders
The implications of this procurement process extend beyond just energy providers and consumers. Local communities, businesses, and environmental organizations will all play a role in shaping the outcomes. For communities, this initiative could mean new job opportunities and economic development, particularly in regions where new energy projects are developed. For businesses, the potential for lower energy costs and access to innovative energy solutions, including demand-response initiatives like the Peak Perks program, could drive growth and competitiveness.
Environmental organizations will be keenly watching the process to ensure that it aligns with broader sustainability goals. The inclusion of renewable energy sources and advanced technologies will be a critical factor in evaluating the success of the initiative in meeting Ontario’s climate objectives.
Looking Ahead
As Ontario embarks on this unprecedented energy procurement journey, the outcomes will be closely watched by various stakeholders. The success of this initiative will depend on the quality and diversity of the bids received, the efficiency of the evaluation process, and the ability to integrate new energy sources into the existing grid, while advancing energy independence where feasible.
In conclusion, Ontario’s launch of the largest competitive energy procurement process in its history is a landmark event that holds promise for a more reliable, sustainable, and cost-effective energy future. By embracing competition and innovation, the province is setting a new standard for energy procurement that could serve as a model for other regions seeking to modernize their energy systems. The coming months will be crucial in determining how this bold initiative will shape Ontario’s energy landscape for years to come.
Global Renewable LCOE Trends reveal offshore wind costs down 32%, with 10MW turbines, lower CAPEX and OPEX, and parity for solar PV and onshore wind in Europe, China, and California, per BloombergNEF analysis.
Key Points
Benchmarks showing falling LCOE for offshore wind, onshore wind, and solar PV, driven by larger turbines and lower CAPEX
✅ Offshore wind LCOE $78/MWh; $53-64/MWh in DK/NL excl. transmission
✅ Onshore wind $47/MWh; solar PV $51/MWh, best $26-36/MWh
✅ Cost drivers: 10MW turbines, lower CAPEX/OPEX, weak China demand
World offshore wind costs have fallen 32% from just a year ago and 12% compared with the first half of 2019, according to a BNEF long-term outlook from BloombergNEF.
In its latest Levelized Cost of Electricity (LCOE) Update, BloombergNEF said its current global benchmark LCOE estimate for offshore wind is $78 a megawatt-hour.
“New offshore wind projects throughout Europe, including the UK's build-out, now deploy turbines with power ratings up to 10MW, unlocking CAPEX and OPEX savings,” BloombergNEF said.
In Denmark and the Netherlands, it expects the most recent projects financed to achieve $53-64/MWh excluding transmission.
New solar and onshore wind projects have reached parity with average wholesale power prices in California and parts of Europe, while in China levelised costs are below the benchmark average regulated coal price, according to BloombergNEF.
The company's global benchmark levelized cost figures for onshore wind and PV projects financed in the last six months are at $47 and $51 a megawatt-hours, underscoring that renewables are now the cheapest new electricity option in many regions, down 6% and 11% respectively compared with the first half of 2019.
BloombergNEF said for wind this is mainly down to a fall in the price of turbines – 7% lower on average globally compared with the end of 2018.
In China, the world’s largest solar market, the CAPEX of utility-scale PV plants has dropped 11% in the last six months, reaching $0.57m per MW.
“Weak demand for new plants in China has left developers and engineering, procurement and construction firms eager for business, and this has put pressure on CAPEX,” BloombergNEF said.
It added that estimates of the cheapest PV projects financed recently – in India, Chile and Australia – will be able to achieve an LCOE of $27-36/MWh, assuming competitive returns for their equity investors.
Best-in-class onshore wind farms in Brazil, India, Mexico and Texas can reach levelized costs as low as $26-31/MWh already, the research said.
Programs such as the World Bank wind program are helping developing countries accelerate wind deployment as costs continue to drop.
BloombergNEF associate in the energy economics team Tifenn Brandily said: “This is a three- stage process. In phase one, new solar and wind get cheaper than new gas and coal plants on a cost-of- energy basis.
“In phase two, renewables reach parity with power prices. In phase three, they become even cheaper than running existing thermal plants.
“Our analysis shows that phase one has now been reached for two-thirds of the global population.
“Phase two started with California, China and parts of Europe. We expect phase three to be reached on a global scale by 2030.
“As this all plays out, thermal power plants will increasingly be relegated to a balancing role, looking for opportunities to generate when the sun doesn’t shine or the wind doesn’t blow.”
