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Construction costs are falling for renewable and natural gas plants

New statistics reflect how much renewable development has matured in previous years.

Construction costs are falling for renewable and natural gas plants

Numbers from the Energy Information Administration (EIA) reflect the extent of renewable energy development in the US over the past several years. Construction costs per kilowatt for solar, wind, biomass, and hydroelectric projects have fallen, in some cases steeply, since 2013, and natural gas generators are also getting cheaper to build despite getting more expensive year-over-year from 2013 to 2014. Only petroleum liquid generators have shown an increase in cost per kilowatt between 2013 and 2015.

The falling cost of building these renewable plants likely contributed to a peculiarity of the US energy makeup during the months of March and April, as well.

According to the EIA, electricity generation from utility-scale renewable plants surpassed nuclear generation for the first time since 1984 in those two months. The EIA explains that this is a seasonal result as well as a trend outcome—not only is solar, wind, hydro, geothermal, and biomass electricity produced more than ever before, but nuclear energy also tends to be curtailed in spring and fall. During those seasons, plants are scheduled for maintenance more often because energy demand is lower. The Nuclear Regulatory Commission reported that “an average of 14 gigawatts and 21 gigawatts of nuclear capacity were offline during March and April, respectively, representing about 14 percent and 21 percent of total nuclear capacity in the United States,” the EIA wrote.

Subsequent months should see the energy mix balance out again—winds become more variable and nuclear plants ideally will have recovered from any maintenance. A big factor in pushing renewable energy above nuclear this season was the record snowpack recorded by California, where the warming months have been huge for hydroelectric plants. Wind and solar also continue to grow as nuclear energy stays flat. Aging nuclear plants are being taken offline, and companies are struggling to build new nuclear facilities.

The EIA’s numbers on construction costs show that renewable plant construction favors large-scale wind farms in particular. “Costs tend to be lower for larger wind plants, as plants above 100 megawatts (MW) averaged lower costs than those below 100 MW, likely reflecting economies of scale,” the EIA wrote. The administration’s construction numbers only record the cost of new plants in the year that they’re completed, and the figures don’t include any federal or local subsidies.

A final interesting data point shared by the EIA shows that the cost of building natural gas generators dropped 28 percent between 2013 and 2015, as more efficient combined cycle plants that have both combustion and steam turbines made up most of the new installations. That makes building natural gas plants competitive, in addition to the fact that natural gas is already competitive in terms of fuel price. The cheap fuel has been undercutting efforts to bring back coal and fund new nuclear plants, and construction costs will surely factor into how the US creates electricity in the future.

Channel Ars Technica