The sun and wind are the cheapest sources of energy

Las Vegas solar power station that generates energy even at night

Consulting firm Lazard in its 10th annual report showed that wind and solar electricity became cheaper than electricity from other sources, including traditional ones - even without government subsidies. These data are also confirmed by the analysis of the laboratory of Berkeley solar and wind energy.

The report was compiled based on the standardized cost of electricity (Levelized Cost Of Energy, LCOE), which takes into account the cost of electricity production, taking into account all costs (construction costs, maintenance costs of buildings and structures, fuel costs) throughout the entire life cycle of the power plant. This approach allows us to objectively compare the cost of energy for different ways of its production.

Comparison of the scatter of the normalized cost of renewable and traditional energy sources according to the Lazard report, in dollars per MWh

From 2009 to 2015, the normalized cost of generating 1 MWh of wind electricity decreased from $ 101- $ 169 to $ 32- $ 72, that is, almost 3 times. The normalized cost of generating 1 MWh of solar electricity over the same period decreased from $ 323- $ 394 to $ 58- $ 70.

Change in the variation of the normalized cost of wind and solar electricity from 2009 to 2015, in dollars per MWh

Lazard data is also confirmed by the market prices of wind contracts, which reach $ 10- $ 20.

Such trends will soon lead to the fact that it will be more profitable to build new solar and wind power stations instead of gas turbine power plants, which are now the cheapest traditional source of electricity. In some cases, it is cheaper to build a new power plant on renewable energy than to continue to use an existing nuclear or thermal power plant.

Given this, it is not surprising that significant investments in renewable energy are made in countries such as China, which has become the largest energy producer from renewable sources in the world, and India, which recently announced a tender for the construction of wind and solar power plants with a total capacity of 1 GW, and also in the countries of the Middle East and Africa, in which for 2016 wind power plants with a total capacity of 676 MW were commissioned.

Under construction solar power plant in Datong , China

The use of renewable energy sources, which until recently were an environmentally friendly, but expensive source of electricity for economically developed countries, is now becoming not only environmentally sound, but also economically. Declining prices for renewable energy turn it into a cheap and affordable energy source, which is gaining popularity in developing countries, most of which are also located in areas favorable for the use of solar and wind energy. A significant shift in the paradigm of the production and use of electrical energy occurs, as is usually the case, imperceptibly.