Wind, solar power plants cheaper than coal in a decade
While met coal is clearly the star performer of the 2016 rally in mining and metals, thermal coal is probably the biggest surprise – seaborne prices are up 65% in 2016 to above $80 a tonne.
Even at today’s higher prices coal-fired power stations still represent one of the cheapest options to add power generation capacity. But according to a new blog post from top miner BHP Billiton, renewable energy sources are quickly closing the competitive gap:
On average, wind and solar energy are expected to reach cost-parity with incumbent technologies on a new-build, unsubsidised basis in about a decade. As an example, the chart below depicts the expected cost of building new wind and solar plants relative to new coal in China – the world’s largest power market.
BHP adds that in some markets with excellent solar or wind resources, such as Chile and Morocco, the tipping point has already been passed.