European Energy Financial Overview
Market benefitting from strongly declining costs
Wind energy
•
The overall LCOE¹ for wind is estimated to have dropped by more than 2/3s over the past
10 years due to cheaper construction and turbine costs, and higher capacity factors
Onshore wind's LCOE has fallen 68% since 2009 and is cheapest in India and China,
running between EUR 41-100, which means that well-sited wind farms in these countries
are among the cheapest in the world - an incredibly important factor seeing as these
countries' surging demand for power is currently being met by coal
Solar energy
•
•
•
==
EUROPEAN
ENERGY
If wind's LCOE drop has been steady, solar energy's has been meteoric - after being
more than 2.5x that of wind, the LCOE of solar PV has now almost caught up with wind
Feed-in tariffs and plummeting photovoltaic module prices make solar competitive with
most forms of power generation
On 3 September 2018, the European Union (EU) removed the Minimum Import Prices on
solar panels from China. These measures were initially put into place to protect the
European module manufacturers
Removing the trade measures, however, meant that the construction cost of a solar plant
in the EU dropped by 12-15% overnight, and now grid parity can be achieved in large
parts of Southern Europe
LCOE (USD/MWh)
140
160
80
60
༄ ༔ སཽ ༔ ྂ ¥
I
120
Wind 9-year percentage decrease: -69%
Wind 9-year CAGR: -12%
100
-68%
40
20
400
350
300
250
200
150
100
50
LCOE (USD/MWh)
Solar 9-year percentage decrease: -87%
Solar 9-year CAGR: -21%
-87%
2009 2010
2011 2012 2013
2014
2015 2016 2017 2018 2019
2009 2010
2011
2012 2013
2014
2015 2016 2017 2018 2019
A
B
A
B
Cost of components: Can still
decrease further. However, not
at the same rate as it has in the
past
Efficiency: Significant potential
for increased efficiency as
turbines increase in size and
technology is enhanced
Cost of components:
Significant potential to decrease
cost as competition among
suppliers increases
Efficiency: Significant potential
for increased efficiency as panels
increase in size and technology
is enhanced
Note: 1) LCOE: levelised cost of energy
Source: Lazard and management estimates
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