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					</table>The Levelized Cost of Energy (LCOE) for onshore wind and utility-scale solar is now competitive with conventional generation technologies, even without subsidies in some locations, a report by <a href="https://www.lazard.com/" target="_blank" rel="noopener">Lazard</a>, an asset management and financial advisory company, said.
It added that the cost of unsubsidized onshore wind can range from $24/MWh to $75/MWh, and the cost of utility-scale solar can range from $24/MWh to $96/MWh.
The cost of energy storage technologies is also declining rapidly, which is making it increasingly affordable to firm up the intermittency of renewable energy sources. It can help address the concerns about the variability of renewable sources and make integrating them into the grid easier.
<img loading="lazy" decoding="async" class="aligncenter wp-image-52604 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/1.png" alt="" width="1318" height="660" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/1.png 1318w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/1-300x150.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/1-768x385.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/1-650x325.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/1-624x312.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/1-600x300.png 600w" sizes="(max-width: 1318px) 100vw, 1318px" />
While the reduction in costs continues, their rate of decline has slowed over the years.
The analysis also includes sensitivities for factors such as federal tax subsidies, fuel prices, carbon pricing, and cost of capital and shows how these factors can affect LCOE for different generation technologies.
<img loading="lazy" decoding="async" class="aligncenter wp-image-52605 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/2.png" alt="" width="1307" height="731" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/2.png 1307w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/2-300x168.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/2-768x430.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/2-650x364.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/2-624x349.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/04/2-600x336.png 600w" sizes="(max-width: 1307px) 100vw, 1307px" />
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Specifically, the LCOE for onshore wind ($24/MWh) and for utility-scale solar PV ($24/MWh) are lower in comparison to the marginal cost of coal-fired generation ranges from $29/MWh to $74/MWh, and the marginal cost of combined cycle gas-fired generation ranges from $51/MWh to $73/MWh.
According to Lazard&#8217;s analysis of unsubsidized LCOE, there have also been significant cost reductions in the historical pricing of utility-scale renewable energy generation technologies.
These cost reductions have been due to several factors, including lower capital costs, advancements in technology, and greater competition in the market.
The LCOE for renewable energy technologies, specifically utility-scale solar PV, recorded a decrease of 83% from $359/MWh in 2009 to $60/MWh in 2023. Onshore wind recorded a decrease of 63%, ranging from $135/MWh in 2009 to $50/MWh in 2033.
Both have decreased significantly over the past decade, making them increasingly cost-competitive with traditional fossil fuel technologies such as coal and natural gas combined cycle.
In contrast, the LCOE for coal and nuclear power has remained relatively stable.
The report also notes that the adoption of energy storage has been driven by regulatory incentives, falling costs, and the need to manage the variability of renewable generation.
Green hydrogen cost
The report notes that the cost of green hydrogen, which is produced using renewable energy sources such as wind and solar, is still relatively high compared to conventional fuels. However, the cost is expected to decline significantly over the next decade, driven by falling renewable energy costs, improvements in electrolysis technology, and economies of scale.
The report also highlights that the cost of blue hydrogen, which is produced using natural gas with carbon capture and storage, is already competitive with conventional fuels in some regions and  that blue hydrogen can play an important role in decarbonizing certain industries while green hydrogen scales up.
According to a Lawrence Berkely National Laboratory report, utility-scale solar projects’ LCOE <a href="https://www.mercomindia.com/falling-costs-drove-solar-installations-in-the-us-in-2021" target="_blank" rel="noopener">decreased</a> by about 85% in the U.S. since 2010 to $33/MWh in 2021.
The U.S. added 32 GW of renewable energy capacity in 2022, according to a BloombergNEF report.

Renewable Generation Cost Can Compete with Conventional Energy in the US

Saudi Arabia’s <a href="https://www.meim.gov.sa/arabic/Pages/default.aspx">Ministry of Energy</a> has published the names of the shortlisted bidders for the round two of the National Renewable Energy Program (NREP).
<a href="https://www.abg.com.sa/">Al Blagha Holding for Investments Company</a> and First Solar International Middle East (FZ-LLC) have been shortlisted for projects under round two category A. This round comprised 70 MW capacity, including Madinah (50 MW) and Rafha (20 MW) projects.
The Request for Proposals (RfP) for Category A projects was released in August 2019. A total of two bids were submitted in February 2020 for each of the two projects.
For the Madinah project, Al Blagha Holding has been shortlisted at SR 0.07 ($0.02)/kWh and First Solar International Middle East for SR 0.11 ($0.03)/kWh.
Similarly, for the Rafha 20 MW project, Al Blagha Holding has been shortlisted for SR0.13 (~$0.03)/ kWh and First Solar for SR0.19 (~$0.05)/kWh.
<a href="https://mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-A.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-18629" src="https://mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-A.png" alt="Saudi Arabia NREP_Category A" width="683" height="288" srcset="https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-A.png 683w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-A-300x127.png 300w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-A-650x274.png 650w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-A-624x263.png 624w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-A-600x253.png 600w" sizes="(max-width: 683px) 100vw, 683px" /></a>Round two Category B of the NREP consisted of four solar independent producers bidding for 1,400 MW, namely, Al-Faisaliah PV IPP (600 MW), Jeddah PV IPP (300 MW), Rabigh PV IPP, (300 MW) and Qurrayat PV IPP (200 MW).
For Jeddah 300 MW project, Abu Dhabi Future Energy Company PJSC-MASDAR has been shortlisted for the levelized cost of SR 0.06 (~$0.02)/ kWh, International Company for Water and Power Projects (ACWA Power) for SR0.06 (~$0.02)/ kWh.
Similarly, for the Rabigh 300 MW project, Marubeni Corporation and ACWA Power have been selected. For Qurrayat 200 MW PV project, ACWA, and Total Solar INTL have been shortlisted.
<a href="https://mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-B-1.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-18633" src="https://mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-B-1.png" alt="Saudi Arabia NREP_Category B" width="658" height="393" srcset="https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-B-1.png 658w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-B-1-300x179.png 300w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-B-1-650x388.png 650w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-B-1-624x373.png 624w, https://cms.mercomindia.com/wp-content/uploads/2020/04/Saudi-Arabia-NREP_Category-B-1-600x358.png 600w" sizes="(max-width: 658px) 100vw, 658px" /></a>
The Request for Proposals for the projects in this category was released in July 2019. A total of four bids were submitted in January 2020 for four projects.
For the Al-Faisaliah PV IPP, bids received from the lowest two bidders were extremely close, and the difference in the levelized cost of energy (LCOEs) was within the statistical margin of error. So, the Ministry of Energy decided to shortlist the two consortia led by MASDAR and ACWA and proceeded with the best and final offer. The results for the Al-Faisaliah project will be announced in April 2020 after the completion of the best and final offer.
Successful bidders will enter into a 25-year power purchase agreement with the Saudi Power Procurement Company (SPPC) as the off-taker.
Recently, it was reported that to <a href="https://mercomindia.com/abu-dhabi-postpones-public-opening-bids-solar/" target="_blank" rel="noopener noreferrer">curb</a> the spread of deadly Coronavirus (COVID-19), the Emirates Water &amp; Electricity Company (EWEC), Abu Dhabi’s state-owned water and electric utility, postponed the planned public opening of the commercial tariffs for the 1.5 GW Al-Dhafra solar project.
In March 2020, Mercom reported that the Saudi Arabia Renewable Energy Project Development Office (REPDO) <a href="https://mercomindia.com/saudi-arabia-bidders-solar-tender/" target="_blank" rel="noopener noreferrer">announced</a> the list of companies that were pre-qualified to bid in round three for a combined solar capacity of 1.2 GW. The project falls under the Kingdom’s National Renewable Energy Program and has been divided into two categories – Category A and Category B.
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Image credit: Jllm06 / CC BY-<a href="https://creativecommons.org/licenses/by-sa/4.0" target="_blank" rel="noopener noreferrer">SA</a>

Saudi Arabia Shortlists Solar Bidders for Round 2 of National Renewable Energy Program

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