by Bob Shively, Enerdynamics President and Lead Instructor
Average Costs Across the U.S.
In our June 2016 blog post titled Economics, Not Policy Mandates, Drive the Growth of Renewables we described how the price of utility-scale wind and solar projects was becoming competitive with traditional forms of generation. The discussion was centered on data developed in 2015. Costs for renewables are decreasing so rapidly that an update using more recent numbers shows even more dramatic results. Stunningly, wind and utility-scale solar PV are now the two lowest-cost generation sources.
Costs in Your Community
The University of Texas at Austin recently performed a related study titled New U.S. Power Costs: by County, with Environmental Externalities that takes into account generation costs similar to those shown above, but it also considered additional externalities. The complete list of factors considered include:
- Power plant costs including operating plus capital costs
- Fuel costs
- Environmental and health costs including air quality and greenhouse gases
- Infrastructure costs including transmission and distribution, rail, and gas pipelines
- Integration costs for renewables and distributed energy resources
- Opportunities for energy efficiency
- Government financial support for electricity
The University of Texas study analyzed the lowest-cost form of generation by county across the U.S.:
Here we see the dominance of wind in the Midwest, solar in sunny regions of the West, and natural gas combined-cycle turbines in much of the rest of the country. Interestingly, in a smaller number of counties nuclear power is the low-cost resource.
How Costs Affect U.S. Generation Mix
Not surprisingly, planned generation additions and retirements are reflective of cost data.
Source: EIA website as of March 2017
Given that generation decisions are made at the local and state levels, it seems logical to conclude that regardless of federal policies the movement to gas and renewable generation will continue.