Solar Photovoltaics with Battery Storage Cheaper than Conventional Power Plants – CleanTechnica

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The new edition of the study by the Fraunhofer Institute for Solar Energy Systems ISE on the electricity generation costs of various power plants shows that photovoltaic systems, even in combination with battery storage, now produce electricity much more cheaply than coal or gas power plants. The Fraunhofer ISE has been calculating the so-called electricity generation costs – i.e. the average generation costs per kilowatt hour of electricity – for Germany at regular intervals since 2010. The new analysis also includes the electricity generation costs for agri-photovoltaics, hydrogen power plants and new nuclear power plants for the first time. In addition to the current status for 2024, the scientists also provide a forecast for cost developments up to 2045.

According to the study’s calculations, PV ground-mounted systems and onshore wind turbines are the most cost-effective technologies in Germany, with costs of 4.1 to 9.2 cents per kilowatt hour, not only among renewable energies, but among all types of power plants. The electricity generation costs for PV battery systems vary in the analysis for Germany between 6.0 and 22.5 cents per kilowatt hour. The wide range results from the high cost differences for battery systems (400 to 1000 euros per kilowatt hour) in combination with the cost differences for PV systems and the different levels of solar radiation at the plant location.“These calculations show that the large-scale projects currently underway in Germany, which combine open-space PV systems, wind farms and stationary battery storage systems, are good investments,” says Dr. Christoph Kost, head of the Energy System Analysis Department at Fraunhofer ISE and lead author of the study. “The combination enables grid capacities to be better utilized, for example.”

Electricity production costs for renewable energies will continue to fall until 2045

The study team takes into account the cost developments for the construction and operation of the plants up to 2045 for all power plant technologies. According to this, in 2045 the electricity generation costs for small PV roof systems will be between 4.9 and 10.4 cents per kilowatt hour and between 3.1 and 5.0 cents per kilowatt hour for PV open space systems. “Even small PV battery systems could then achieve electricity generation costs of between 7 and 19 cents per kilowatt hour, assuming the prices for battery storage fall to the assumed 180 to 700 euros per kilowatt hour,” says Dr. Verena Fluri, scientist at Fraunhofer ISE and co-author of the study.

Newly built wind turbines in 2045 could produce electricity onshore at a cost of between 3.7 and 7.9 cents per kilowatt hour. Offshore wind turbines also have strong cost-reduction potential. The research team expects price improvements for wind energy mainly thanks to higher full-load hours and larger turbines.

Flexible power plants necessary, but with significantly higher electricity production costs

In a climate-neutral energy system in which the proportion of renewable energies is high, in addition to battery storage, flexibly controllable power plants are also needed as a backup. In the future, biogas and biomass power plants could cover part of the required output. In the study, the electricity generation costs were calculated with flexible operation, i.e. with medium to low full load hours. For biogas, they are between 20.2 and 32.5 cents per kilowatt hour. For plants with solid biomass, the electricity generation costs are significantly lower, at between 11.5 and 23.5 cents per kilowatt hour.

For a hydrogen-powered gas and steam turbine power plant built in 2030, the study shows 23.6 – 43.3 cents per kilowatt hour in highly flexible operation. The electricity generation costs of flexible technologies are significantly higher than the costs of renewable energies, as CO2 _costs and the procurement of hydrogen are key cost drivers. “We need them as an important addition. However, their operation will be limited to the bare minimum,” says Paul Müller, also a scientist at Fraunhofer ISE and responsible for this part of the study. He considers 1000 to 2000 operating hours in 2045 to be realistic.

Study: Electricity generation costs of renewable energies

By Dr. Christoph Kost, Fraunhofer ISE | August 2024

Courtesy of Fraunhofer Institute for Solar Energy Systems ISE. Machine translation.