[rabscuttler]

Disclaimer: I helped create those Carbon Tracker graphs.

> - The author states that renewables are on the verge of being "cheaper than the cost of continuing to operate existing coal- or gas-fueled power plants". They support this argument with some cherry-picked examples. Realistically, that is not true, nor will it likely every be true.

In the case of coal, it certainly is true in many regions. Natural gas I agree is quite different, particularly given the role it will play providing flexible capacity as renewables penetrate further. But across Europe new renewables are cheaper to build than to operate existing coal, due to ageing fleets, tightening air pollution regulations and the carbon price. Same for the US, except without the carbon price. [*edit - And obviously the rapid cost reductions in renewables!]. And we see quite strong trends for Asia, SEA etc.

You can find more detail on the coal trajectories in our global report, Powering Down Coal and online portal [0].

[0] https://www.carbontracker.org/reports/coal-portal/

[chris_va]

Apologies :).

However, you really cannot compare coal to renewables directly, since it's an apples to oranges type comparison. If you include externalities like a carbon tax in the cost curves then the you really need to understand the nuances to properly interpret those graphs.

I should have said please keep the nuances in mind when trying to interpret the graphs, and thank you for your efforts!

[rabscuttler]

No worries at all!

Regarding the technology comparison, that is true from a power system point of view - but for a utility which is making investment decisions in new generation capacity, it isn't so different. We include carbon taxes because coal power operators suffer that tax, it isn't an assumption about future policies. And equally to someone else's question about whether subsidies are included in solar costs, the answer is no. Because the LCOE is calculated from current module, balance of system and soft costs, and that while subsidies have brought the costs down, they aren't a component of the LCOE. As for system costs which perhaps you are referring to, that is fair from the system viewpoint but not particularly for the marginal unit of new capacity. UKERC have done some good research in the UK on system costs of renewables integration which perhaps you are referring to [0].

But you're absolutely right that there is a lot of nuance, especially around regional power market differences.

[0] https://www.carbonbrief.org/in-depth-whole-system-costs-rene...

[chris_va]

> but for a utility which is making investment decisions in new generation capacity, it isn't so different.

You are probably familiar with all of this, but that's a tricky one since dispatchability puts those into different equivalence classes. California ISO has negative LMPs right now, which means building additional solar provides little marginal value to the utility. As a result, even if the "traditional" LCOE for solar (just using capital cost, O&M, and capacity factor) is lower than coal, coal would technically still have higher value to the utility.

You'd have to model real-time demand and fratricide to get a average marginal rate (almost impossible to predict for a 20-30 year horizon right now, given rate of innovation), and then compare that against the amortized capital cost and O&M to get an expected ROI for the plant. An LCOE comparison wouldn't really make sense from a decision making standpoint.

That wouldn't be true if they were both closely equivalent (say NGCC vs NGCT, or coal vs nuclear). Then a strict LCOE comparison would be useful.

[rabscuttler]

Fair point about California's negative LMPs, but I think for a lot of regions in the US there is still a lot of room for renewable growth.

But it is fair to compare LCOEs because solar usually gets its value through long-term PPAs; either utility to generator, or even through the rate-base, and the price of that is effectively set by the LCOE. Despite missing out a lot of the other factors that you reasonably bring up, from system costs to locational factors.

[airstrike]

And are you including subsidies when you plot your cost of solar?

[Latteland]

are there even subsidies left on solar on commercial installations?