Quantcast
Environmental News for a Healthier Planet and Life

Help Support EcoWatch

Bloomberg Analysis: It Has Never Made Less Sense to Build Fossil Fuel Power Plants

Business
Bloomberg Analysis: It Has Never Made Less Sense to Build Fossil Fuel Power Plants

Wind and solar power are "much more competitive" against dirty energy sources than they were even just a few years ago, according to a detailed global analysis published this week.

A wind farm in Colorado. Photo credit: UCAR / Flickr

In fact, according to the findings from the research company Bloomberg New Energy Finance (BNEF), wind power is now the cheapest electricity to produce in both Germany and the UK, even without government subsidies. Though Denmark passed the same milestone last year, this is the first time that threshold has been crossed by a G7 economy.

The analysis took into account not just the cost of generating a megawatt hour (MWh) of electricity, but also the upfront capital and development expenses, the cost of equity and debt finance and operating and maintenance fees.

In the U.S., coal and gas are still cheaper, at $65 per MWh, compared to onshore wind at $80 and solar at $107.

Still, given documented trends, "it's impossible to brush aside renewables in the U.S. in the same way it might have been just a few years ago," writes Bloomberg's Tom Randall.

"Renewables are really becoming cost-competitive and they're competing more directly with fossil fuels," BNEF analyst Luke Mills told Bloomberg. "We're seeing the utilization rate of fossil fuels wear away."

Indeed, while the future for renewables looks bright, the outlook for coal and other dirty energy sources is decidedly more dismal—and bound to become even more so.

"It's a self-reinforcing cycle," writes Randall. "As more renewables are installed, coal and natural gas plants are used less. As coal and gas are used less, the cost of using them to generate electricity goes up. As the cost of coal and gas power rises, more renewables will be installed."

Already there is evidence of this shift taking place. Citigroup on Monday announced a new policy to cut its lending to the global coal mining industry—a development hailed by environmental groups as an acknowledgement that "the scale of the challenge posed by climate change calls for the financial sector to transition away from financing high-carbon energy sources in addition to scaling up financing for low-carbon energy."

"With Bank of America, Crédit Agricole and now Citigroup withdrawing support for coal mining, this announcement shows major momentum away from financing coal by the banking sector," said Lindsey Allen, executive director of the Rainforest Action Network, which campaigns for banks to cut ties with the coal industry. "But reducing credit exposure is only a partial step forward. We urge Citigroup and Wall Street laggards such as Morgan Stanley to cut all financing ties to both coal mining and coal-fired power."

To that end, Rainforest Action Network and allied groups are planning a day of action this Friday targeting Morgan Stanley, which conducted half a billion dollars worth of coal deals in 2014, financed $1.2 billion for the largest coal fired power plant operators in the world last year and continues to finance mountaintop removal coal mining.

Dropping dirty fuels is just good business, said Michael Brune, executive director of the Sierra Club, in a statement to the Washington Post on Tuesday.

"Clean energy solutions like wind and solar are getting more affordable and more accessible by the day, meaning they are increasingly the smartest long-term financial investments for utilities and other electricity producers across America," he said, responding to the BNEF report. "The transition to a clean energy economy is going full speed ahead and pushing dangerous, dirty fossil fuels to the back of the line."

YOU MIGHT ALSO LIKE

Fracking Boom Goes Bust as Companies File for Bankruptcy

26% of the World Will Run on Renewables by 2020, Says IEA

BP to Pay ‘Largest Settlement With a Single Entity in American History’

Citigroup Becomes Third Major Bank to Cut Financing to Coal Industry

A North Atlantic right whale feeds off the shores of Duxbury Beach, Massachusetts in 2015. David L. Ryan / The Boston Globe via Getty Images

The population of extremely endangered North Atlantic right whales has fallen even further in the last year, the National Oceanic and Atmospheric Administration (NOAA) said Monday.

Read More Show Less

EcoWatch Daily Newsletter

Hundreds of Canadian children took part in a massive protest march against climate change in Toronto, Canada, on May 24, 2019. Creative Touch Imaging Ltd. / NurPhoto / Getty Images

By Heather Houser

Compost. Fly less. Reduce your meat consumption. Say no to plastic. These imperatives are familiar ones in the repertoire of individual actions to reduce a person's environmental impact. Don't have kids, or maybe just one. This climate action appears less frequently in that repertoire, but it's gaining currency as climate catastrophes mount. One study has shown that the reduction of greenhouse gas emissions from having one fewer child in the United States is 20 times higher—yes 2000% greater—than the impact of lifestyle changes like those listed above.

Read More Show Less

Trending

For the first time on record, the main nursery of Arctic sea ice in Siberia has yet to start freezing by late October. Euronews / YouTube

By Sharon Guynup

At this time of year, in Russia's far north Laptev Sea, the sun hovers near the horizon during the day, generating little warmth, as the region heads towards months of polar night. By late September or early October, the sea's shallow waters should be a vast, frozen expanse.

Read More Show Less
Fossil remains indicate these birds had a wingspan of over 20 feet. Brian Choo, CC BY-NC-SA

By Peter A. Kloess

Picture Antarctica today and what comes to mind? Large ice floes bobbing in the Southern Ocean? Maybe a remote outpost populated with scientists from around the world? Or perhaps colonies of penguins puttering amid vast open tracts of snow?

Read More Show Less
A baby orangutan displaced by palm oil plantation logging is seen at Nyaru Menteng Rehabilitation Center in Borneo, Indonesia on May 27, 2017. Jonathan Perugia / In Pictures / Getty Images

The world's largest financial institutions loaned more than $2.6 trillion in 2019 to sectors driving the climate crisis and wildlife destruction, according to a new report from advocacy organization portfolio.earth.

Read More Show Less

Support Ecowatch