“There is so much momentum behind the green economy, behind green energy, behind renewables and green technologies. It is already telling its own economic story, which is that it is cheaper than the fossil fuel alternatives.”
- Renewable energy technology, especially solar and wind, has made ‘exponential gains in efficiency’ in recent years, according to the Swiss non-profit organisation World Economic Forum. Its 2016 handbook puts the current worldwide average ‘levelised cost’ of electricity from solar at around the same as coal—and falling—and for onshore wind power it’s already half that of coal.
- UK government estimates suggest solar and onshore wind projects are among the cheapest sources in the UK at the moment, according to their levelised cost, although still more expensive than new types of gas power station.
- This is expected to change in the next decade, with gas costs rising and renewables falling. By 2025, solar and onshore wind are estimated to have significantly lower levelised costs in the UK than other forms of electricity generation.
- We don’t know at the moment what effect ‘fracking’ will have on the price of gas.
- Levelised costs are the average cost to the owner of a plant of generating electricity over its lifetime, including the cost of building, operating and decommissioning it. But this doesn’t take into account market conditions, possible changes to government policy, or wider costs such as air quality impacts or storage of energy.
- A government-commissioned report suggests that levelised cost isn’t the best way of comparing different sources of electricity, as technologies with identical levelised cost may have very different effects on the power system. It proposes a new method of calculating ‘whole system impacts’ for decisions on future energy policy, but doesn’t estimate future costs of different sources of electricity.
This factcheck is part of a roundup of Green party manifesto launch. Read the roundup.