Electricity from large solar arrays with batteries now cheaper than from fossil plants in Germany – report

Electricity from large ground-mounted solar PV systems combined with batteries has become cheaper than that generated from fossil power sources in Germany, researchers from the country’s Fraunhofer Institute for Solar Energy Systems (Fraunhofer ISE) have found. “Photovoltaic systems now produce electricity much more cheaply than coal or gas-fired power plants, even in combination with battery storage systems,” the institute said. Following an analysis of the so-called levelized cost of electricity, a measure of the average cost of electricity generation over a technology’s lifetime, the researchers said the costs of ground-mounted PV systems with battery storage ranged between 6.0 and 10.8 cents per kilowatt-hour (ct/kWh), assuming battery investment costs between 400 and 600 euros/kWh.

"These calculations show that the large-scale projects currently being launched in Germany with a combination of ground-mounted PV systems, wind farms and stationary battery storage systems are good investments," said study author Christoph Kost. He added this combination also allowed a better utilisation of grid capacities. The report said that ground-mounted solar power systems and onshore wind turbines are the most cost-effective technologies in Germany among all types of power plants, with costs of 4.1 to 9.2 ct/kWh.

The researchers forecast that the costs of renewable electricity will continue to fall over the coming two decades. “New wind turbines built in 2045 could produce electricity onshore at a cost of between 3.7 and 7.9 ct/kWh. Offshore wind turbines also have strong cost reduction potential,” the institute said, adding that a higher number of full-load hours and larger turbines will be the most important factors for cost declines. According to the report, electricity from power plants running on renewable hydrogen, which Germany plans to use as a back-up for an electricity system dominated by renewables, will be much more expensive, costing between 23.6 - 43.3 ct/kWh in highly flexible operation. "We need them as an important supplement. However, their operation will be limited to the bare minimum," said Paul Müller, also a scientist at the institute, who added that 1,000 to 2,000 operating hours in 2045 were realistic.