(Berlin / Germany) – Electricity generation from onshore solar and wind power plants is significantly cheaper than natural gas-fired combined cycle power plants. This remains true even when system costs for grid expansion and storage are factored in. The cost advantage of renewables would persist even if "the currently very high investment costs for gas turbine power plants were to fall back to their previous levels."
Combined cycle gas turbines are three times more expensive than renewables
These are the findings of a short study commissioned by the German Environmental Aid Association (DUH) and the German Wind Energy Association (WVW). The study clearly shows that the overall costs of gas are significantly higher than those of renewable energies. According to the study, solar and wind power plants newly constructed in 2027 would incur total costs of around 11 cents per kilowatt-hour (ct/kWh). In contrast, the costs for gas-fired power plants would be three times higher, at up to 31 ct/kWh.
- Ground-mounted PV: approx. 10,9 ct/kWh
- PV roof (surplus): approx. 11,9 ct/kWh
- Onshore wind: approx. 11,2 ct/kWh
- Gas-fired power plants: approx. 28,9-31,1 ct/kWh
This revealed that the supposedly high system costs estimated by the German government were "misguided". According to the DUH, the real cost drivers were "the rapidly rising prices of power plant manufacturers" as well as fuels and emission certificates, and also "the expected low operating hours of gas-fired power plants".
Associations: Economics Minister Katherina Reiche should acknowledge the true cost structures of the energy market and end her "policies largely influenced by energy companies." © BMWE
If there were technology-neutral competition, battery storage systems would currently prevail in many cases. Outside of rare periods of low wind and solar power generation, a storage system could be largely filled with inexpensive surplus electricity from solar and wind power, which it then makes available again with a high efficiency of around 90 percent. Natural gas power plants, on the other hand, must always procure fuel at world market prices and achieve maximum electrical efficiencies of just over 60 percent, according to the short study. Thus, battery storage systems lead to shifts in the timing of electricity generation, smoothing of peak loads, and, compared to combined cycle gas turbine (CCGT) power plants, a reliably available supply at predictable costs. External costs, such as securing transport routes and infrastructure for natural gas and liquefied natural gas (LNG), were not considered. These further increase the overall economic advantages of domestic renewable energies.
Energy policy influenced by corporations
DUH and WVW are calling on Economics Minister Katherina Reiche to "acknowledge the true cost structures of the energy market and end her policy, which is unilaterally focused on the construction of new gas-fired power plants and significantly influenced by energy companies." The efficiency and economic viability of battery storage systems are being systematically underestimated. There must be no pre-commitment to gas-fired power plants in the first round of tenders for the planned capacity market. "Tenders for backup capacity must be technology-neutral and must not contain any tricks that unfairly disadvantage battery storage systems," the associations stated.
There is no technical justification for slowing down the expansion of renewable energy.
“The ambitious expansion of renewable energies is economically advantageous and protects us against import dependencies,” says WVW board member Lothar Schulze. In contrast, expanding gas-fired power plants would mean that high gas prices would directly impact electricity prices. Technically, there are also “no verifiable reasons” for slowing down the expansion. The consistent implementation of grid optimization measures could increase the transmission capacity of our electricity grids by 50 percent. “Redispatch curtailments could quickly be reduced to a minimum.”
“The figures clearly show,” said DUH Federal Managing Director Sascha Müller-Kraenner, “that the construction of a new gas-fired power plant is three times more expensive compared to new wind or solar power plants.” If Reiche’s plans go ahead, electricity consumers face unnecessarily high costs.
The background paper “ System cost comparison of new natural gas power plants with new onshore solar and wind energy plants ” by RBID GmbH is available as a PDF (22 pages). A summary is also available (6 pages).
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Study: PV and wind power with storage are cheaper than new natural gas power plants. © Vattenfall
