Solar and wind power keep breaking cost records – but Poland and Hungary resist

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Five Danish companies have won the contract to supply 50 megawatts of solar energy generating capacity to Germany. It was the first cross-border auction in Europe for supplying renewable energy.

The tendering process was the fifth in a series of contracts that form Germany’s plan to commission energy from solar photovoltaic sources. In August, an earlier round of bids produced a price of 7.3 cents, but that has now been reduced to 5.4 cents. In offshore wind, price developments have been equally spectacular. Before 2016, the cost of electricity from new offshore wind projects had never gone below 10 cents. In July, the Danish firm Dong Energy set a first new record of 7.3 cents for two wind farms off the Netherlands coast, a mark that was exceeded in September and then in November and December with projects by Vattenfall and Shell offering prices just under and just over 5 cents respectively. In the world’s sunniest and windiest places, price levels of 3 cents were reached in 2016. Electricity from new gas and coal plants typically costs 6 cents or more, before carbon pricing.

At the same time, Hungary is following Poland in almost outlawing wind power, and is pushing through the construction of new nuclear capacity, even though electricity prices from new nuclear plants are typically above 10 cents.

2016 will go down in history as the year that wind and solar electricity – even in Danish conditions – beat carbon-based energy,’ said T&E’s executive director Jos Dings. ‘It can also be a game-changer for transport, first for cars, but later also for trucks, ships and aircraft. Yet, as Hungarian and Polish actions show, some governments still want to deny their citizens the benefit of these local, affordable and clean energy sources and instead will saddle them with the exact opposite.’