Electricity prices are not directly related to creating safer streets for all, but they are related to our interests in housing and the environment. It is important to recognize some of the turning points in the history of sustainable energy.
One of those turning points happened just last year, when onshore wind power (like that produced in Minnesota and the Upper Midwest) became cheaper to build as new capacity than nuclear power was to operate as existing capacity. According to financial research and management firm Lazard, building new onshore wind power can generate electricity for as low as 2.8 cents per kWh, while operating existing nuclear power plants costs about 2.9 cents per kWh. (My last Xcel residential bill was 18.3 cents per kWh.)
In the chart below, the blue bars show the range of prices for building new capacity, while the gold diamonds show marginal rates of existing capacity for offshore wind, nuclear and coal, respectively.
This turning point is the culmination of a long-term trend of decreasing costs for building new capacity for wind and solar. In 2009, the cheapest unsubsidized new wind power cost 10.1 cents per kWh, while the cheapest solar cost 32.3 cents per kWh. Over the next ten years, the price of wind power dropped 72 percent and the price of solar dropped 89 percent. Now it is cheaper to build solar at utility scales than to build new natural gas capacity, even with historically low natural gas prices following the fracking boom.
What does this mean for the future of the world’s energy mix? Bloomberg New Energy Finance issued a 2019 report on trends in the energy sector. They predicted that by 2050, if current trends continue, global electricity will be 62 percent renewables (not counting nuclear as renewable), and a full 48 percent will come from just wind and solar. Thirty-one percent of global electricity generation will continue to be powered by fossil fuels 30 years from now, according to BloombergNEF.
If the cost differential between new wind builds and existing fossil fuels grows in the next few years, these trends could accelerate. We may not be that far out from a utility like Xcel Energy replacing their two existing nuclear plants in Minnesota earlier than planned (in 2040) with a new investment in wind capacity at utility scale.
You can be a trendsetter in this change by signing up for Xcel’s Windsource program. There is also the Renewable Connect program that includes solar power, but that program is currently on a wait list. Changing your residential or commercial energy sources can help your wallet and the environment!
What do you pay for your electricity per kWh? What changes are you making to help the environment? Share your electric bills and green dreams in the comments.