Solar could be cheaper than coal and gas by 2025, study says | Brussels writer: James Crisp

EXCLUSIVE: Solar power will be cheaper than coal or gas by 2025 in sunnier regions of the EU, according to a study published the day before the European Commission launches its Energy Union plans.

But high-risk premiums or bad regulation can increase the costs of plants by half, according to research by the Fraunhofer Institute for Solar Energy Systems.

The cost of producing solar power in central and southern Europe will have dropped to between €0.04 and €0.06 per kilowatt hour by 2025, the study found. The report, commissioned by NGO Agora Energiewende, revealed that cost would plummet to between two to four cents by 2050.

The research only used “conservative assumptions” about possible future technological breakthroughs in solar, and did not factor in innovations that could make electricity cheaper either.

Currently, large solar plants in Germany currently deliver power for less than nine cents. According to the study, electricity from new coal and gas-fired plants costs between five and ten cents per kilowatt hour. Nuclear plants charge 11 cents, the report, published today (24 February), said.

Solar photovoltaic energy has only been granted a very limited role in the EU, due to its high cost when compare to other low-carbon sources, Agora Energiewende said.

But, the NGO said, the study showed that solar panels could compete with coal and gas, which are seen as cheaper.

That meant that solar could play an important and financially viable role in reducing the EU’s energy dependence and in hitting its climate and energy targets for both 2020 and 2030 – central goals of the new Energy Union.

“The study shows that solar energy has become cheaper much more quickly than most experts had predicted and will continue to do so,” said Dr Patrick Graichen, Agora Energiewende director, said.

“Plans for future power supply systems should therefore be revised worldwide. Until now, most of them only anticipate a small share of solar power in the mix.”

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