The 2010s were the wind and solar decade. We observed stunning declines in the cost of both, although total deployment of wind and solar remains small—in 2019, wind and solar represented less than 9 percent of utility-scale electricity generation in the US. In the 2020s, cost declines will likely stall—wind and solar are already pretty cheap, so the declines of the past decade are not reproducible. Deployment, on the other hand, will accelerate.
Mass deployment of wind and solar will bring challenges. These sources are highly intermittent. When the wind suddenly stops blowing—which happens—we need a way to quickly make up the deficit. Each of the three electricity grids in the continental US—east, west, and Texas—has to remain in supply-demand balance every second of every day. We can use grid storage to smooth out some of the bumps, but storage remains expensive. To reach a grid powered entirely by today’s renewables, we would need storage at a price of $20 per kWh (with caveats). Read more…..
Chart of the Day
Aswath Damodaran On The ‘Dark Side Of Valuation’.