Source: Lawrence Berkeley Na onal Laboratory, June 2015. 18% price reduction for ... Price and cost data show that costs
Global Energy & Technology Chris Shelton
Chief Technology Officer, AES Corporation
Solar panels, LEDs, and battery cells promise improved sustainability, cost, and reliability for the grid
It's official. The solar industry has met the 2020 utility-scale solar cost target set by the Energy Department's SunShot Initiative -- three years early.
Battery storage: The next disruptive technology in the power sector
Technology innovation has been a primary driver of the cost declines since 2011. Solar module costs have seen a particularly dramatic cost reduction in recent years. That's due in part to efficiency use 85quality percent less electricitycell than incandescent bulbs. Going on improvements as a resultLEDs of material and innovative and estimate of 1 billion LEDs and CFLs now in U.S. homes, operating module designs, as well an as the development of diamond wafer Low-cost storage could transform the power landscape. The implications are sawing, which dramatically reduces loss in the making of three hoursmaterial per day, Davis estimated an energy savings so far of 50 profound. silicon wafers. The NRELbillion reportkilowatt-hours found that module prices alsokilowatt-hours per capita, which per year, or 160 declined substantially over theabout past equal year due to an oversupply. was toStorage the decline in residential consumption found. prices are dropping much fasterhe than anyone expected, due to the growing The total decline inmarket my chart above comes to 1,161 kilowatt-hours for consumer electronics and demand forper electric vehicles (EVs). Major players capita, which still leaves lot of electricity to explain -- up lithium-ion manufacturing to in Asia,a Europe, and thesavings United States are away all scaling but LEDs and CFLs are surely use in commercial and then, that battery-pack costs are serve EV andcutting other electricity power applications. No surprise, industrial settings, too. down to less than $230 per kilowatt-hour in 2016, compared with almost $1,000 per kilowatt-hour in 2010. McKinsey research has found that storage is already economical for many commercial customers to reduce their peak consumption levels. At today’s lower prices, storage is starting to play a broader role in energy markets, moving from niche uses such as grid balancing to broader ones such as replacing conventional power generators for reliability
Renewable technology enabling manufacturing economies of scale SIZE Nuclear Power Plant (1,000 MW)
3,400
vs.
VOLUME Solar Assembly Line (100 MW/yr)
16.5
m2/MW
m2/MW/yr
1,650 m2
3,400,000 m2
Experience Curves Result in Declining Technology Costs LI-ION BATTERY AND PV MODULES LEARNING CURVES
LED LIGHTING PRICE DECLINE
PV Modules
28% price reduction for each doubling
18% price reduction for each doubling
Li-ion Battery
19% price reduction for each doubling Source: Lawrence Berkeley Na2onal Laboratory, June 2015
Fundamentals of Experience Curve Theory: Costs Decline as Cumulative Capacity Doubles • Boston Consulting Group developed the experience curve concept while analyzing overall cost behavior in the 1960s • Price and cost data show that costs decline by some characteristic amount each time accumulated experience is doubled.
A Green “Boom” Markets designs are becoming strained by wind and solar at time when stakeholders are fully embracing renewables
