Fraunhofer ISE: Renewable energy cheaper than conventional power plants

With costs of 4.1 to 9.2 cents per kWh, ground-mounted photovoltaic systems and onshore wind turbines are the most cost-effective technologies of all power plant types in Germany. This is according to a new study by the Fraunhofer Institute for Solar Energy Systems ISE. It compares the electricity generation costs for various energy sources, with nuclear power coming off particularly badly.

"These calculations indicate 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 Dr. Christoph Kost, Head of Department for Energy System Analysis at Fraunhofer ISE and lead author of the study. "By combining them, for example, grid capacities can be better utilized."

"Also cheaper with battery storage"

Photovoltaic systems combined with battery storage could now also produce electricity much more cheaply than coal or gas-fired power plants. The electricity generation costs for PV battery systems vary between 6.0 and 22.5 cents per kilowatt-hour. The wide range is due to the high-cost differences for battery systems (400 to 1000 euros per kilowatt-hour) combined with the cost differences for PV systems and the varying levels of solar radiation at the system location.

In the study Stromgestehungskosten Erneuerbare Energien (PDF), the authors point out that they neglected system- and location-specific cost factors "in order to ensure the general validity of the results as far as possible". This means that no additional costs for the expansion of backup power plants, increased curtailment or grid expansion are subsumed in connection with the expansion of renewable capacities. "There is also no internalization of dismantling costs or, if applicable, final storage of radioactive material within the scope of the study," it continues.

"Noticeable bias in favor of renewables"

This is where the German Nuclear Energy Association (KernD) comes in with its criticism of the study (PDF). It believes that the study only deals with technology-specific electricity generation costs. It thus "misses the real challenge of designing an appropriate electricity system that combines security of supply, climate and environmental friendliness with economic competitiveness".

Overall, the study shows "a noticeable bias in favor of the renewable energies favored there". Nuclear power is portrayed particularly badly in terms of costs, with generation costs of between 130 and 480 euros per MWh. In addition, a significantly higher interest rate for both debt and equity is assumed for nuclear power plants than for photovoltaics and wind power, including offshore. "The return on equity for nuclear power projects is assumed to be 12 percent, a figure that significantly exceeds even the implicit return on the heavily criticized financing of Hinkley Point C."

The study's assumptions regarding the full load hours of renewables are also unrealistic. "For PV, the range extends from 935 full-load hours in the north to 1280 in the south, although the national average is only around 950 full-load hours," explains the nuclear lobby. "In the case of onshore wind power, 1800 to 3200 full-load hours are assumed at good locations in the north - which have presumably long since been used - although the national average is only around 1850."

(anw)