Solar and storage pushing aside US coal, natural gas

Technology improvements and price declines have made solar and wind the lowest-cost options in most of the United States, according to the Institute for Energy Economic and Financial Analysis.

The coming surge in battery storage deployment is further eroding the economics of coal and natural gas generation and accelerating fossil-fuel plant retirements, the Institute for Energy Economic and Financial Analysis (IEEFA) says in its new 2021 US Power Sector Outlook.

Tech improvements and resulting price declines already have made solar and wind generation resources the lowest-cost option in much of the United States. During the next two to three years the accelerating shift will be transformative, the IEEFA said.

Solar+storage is currently economically competitive, and costs are almost certain to decline.

To pull down storage costs, the Department of Energy (DoE) launched a storage challenge in December that set a goal of reaching a levelized cost of storage for long-duration stationary applications of $0.05/kWh by 2030. Using the DoE’s own estimates, the IEEFA said this would represent a 90% cost reduction.

In February, the DoE added to that goal, setting its sights on pushing PV costs down to $0.03/kWh by 2025 and $0.02/kWh by 2030.

According to the IEEFA, coal’s days are numbered.