Solar and wind power are cheaper than previously thought, study says

Renewable energy sources have become competitive. This year, by the way, is considered a milestone by the industry for signaling the price turnaround, meaning the clean generation has become equal or cheaper than fossil sources.
A report published by the British government, however, offers a new dimension to this account. When considering the "normalized" cost of electricity, over the life of a power plant, solar and wind are much cheaper than previously thought.
The study was presented by the Department of Industrial and Business Strategy (BEIS), which makes periodic projections on the subject, and updates a paper published in 2016. Four years ago, renewables already had a sharp cost fall of 24% compared to 2013. This time, the fall is even greater: 47%, compared to 2016. This means that by 2025, a wind or solar farm could generate energy at half the cost of a gas thermal.
To reach this conclusion, the British government uses an equation to "normalise" the cost of energy, taking into account the average value per megawatt over the life of a project. Thus, it is possible to compare different sources, such as renewable sources with gas and nuclear thermal sources.
The estimated cost for a wind power park that will start operating in 2025 is £46 per megawatt. In the previous forecast, the value was 65 pounds. For a large solar farm, the cost is slightly lower: £44 today, up from £67 in the previous calculation.
BEIS also presented estimates for gas and nuclear thermal power plants. In the first case, the best result was 85 pounds and, in the second, 102 pounds per megawatt. These figures were updated according to inflation by Carbon Brief, a British publication specialising in clean energy.
This type of estimation is important for governments to plan their energy matrices for the future. It seems that currently the best alternative is the expansion of supply through the wind and the sun.
"Brazil has an even greater advantage because it has a predominantly hydraulic matrix and the best wind regime in the world," says Antonio Bastos Filho, CEO of Omega Geração, Brazil's largest wind farm operator.
Hydroelectric reservoirs can be used as a kind of battery. As the wind blows and the sun shines, they fill up, storing energy. When renewables stop working, the National Electric System Operator (ONS), which controls generation in the country, can open the floodgates and generate electricity through the turbines, offsetting the wind and solar burst.
- New level
With increasing competitiveness, clean energy sources are preparing for higher flights. According to Elbia Gannoum, president of the Brazilian Association of Wind Energy (Abeeólica), a repositioning of the main groups, which seek to gain size to access a lower cost of capital, is taking place in the market today.
"In the beginning, we had family group companies. Now, the biggest strength is in energy utilities and companies linked to investment funds," gannoum says.
The expectation is to see more and more the emergence of large groups in the sector, although, according to Gannoum, the time is not for consolidation. "There was already a consolidation three years ago. What we have today is a portfolio adjustment," gannoum explains.
Adjustment or consolidation, the fact is that Omega, in the last two months, announced some major transactions: bought from EDF Renewables half of the Wind Complexes Ventos da Bahia 1 and Ventos da Bahia 2, which together total 182.6 MW, for 660 million reais; and informed the market that it is under negotiation to acquire two other parks, still in the project phase, whose combined capacity reaches 460 MW.
"Renewable energies will be the most competitive going forward," Bastos Filho said. "And if we put the environmental benefits into account, there's no way to compare it."
The recent fall in the price of oil also does not worry. "Those who buy energy from a wind project are guaranteed price and do not depend on the up and down value of the commodity. You can be sure that oil will not stay at this level forever," says the CEO.